CREDIT AGREEMENT
Dated as of December 3, 2002
among
SHOWBIZ MERCHANDISING, L.P.,
as the Borrower,
CEC ENTERTAINMENT, INC.,
as a Guarantor,
BANK OF AMERICA, N.A.,
as Administrative Agent and L/C Issuer,
BANK ONE, NA,
as Syndication Agent,
U.S. BANK NATIONAL ASSOCIATION,
as Co-Documentation Agent,
FLEET NATIONAL BANK,
as Co-Documentation Agent,
and
The Other Lenders Party Hereto
BANC OF AMERICA SECURITIES LLC,
as
Sole Lead Arranger and Sole Book Manager
TABLE OF CONTENTS
Section Page
------- ----
ARTICLE I. DEFINITIONS AND ACCOUNTING TERMS ...............................1
1.01 Defined Terms ..................................................1
1.02 Other Interpretive Provisions .................................17
1.03 Accounting Terms ..............................................18
1.04 Rounding ......................................................18
1.05 References to Agreements and Laws .............................18
1.06 Times of Day ..................................................18
1.07 Letter of Credit Amounts ......................................19
ARTICLE II. THE COMMITMENTS AND CREDIT EXTENSIONS .........................19
2.01 Committed Loans ...............................................19
2.02 Borrowings, Conversions and Continuations of Committed Loans ..19
2.03 Letters of Credit .............................................21
2.04 Intentionally Omitted .........................................28
2.05 Prepayments ...................................................28
2.06 Termination or Reduction of Commitments .......................29
2.07 Repayment of Loans ............................................29
2.08 Interest ......................................................29
2.09 Fees ..........................................................30
2.10 Computation of Interest and Fees ..............................30
2.11 Evidence of Debt ..............................................31
2.12 Payments Generally ............................................31
2.13 Sharing of Payments ...........................................33
2.14 Extension of Maturity Date ....................................33
2.15 Increase in Commitments .......................................34
ARTICLE III. TAXES, YIELD PROTECTION AND ILLEGALITY ........................36
3.01 Taxes .........................................................36
3.02 Illegality ....................................................37
3.03 Inability to Determine Rates ..................................37
3.04 Increased Cost and Reduced Return; Capital Adequacy;
Reserves on Eurodollar Rate Loans ............................38
3.05 Funding Losses ................................................38
3.06 Matters Applicable to all Requests for Compensation ...........39
3.07 Survival ......................................................40
ARTICLE IV. CONDITIONS PRECEDENT TO CREDIT EXTENSIONS .....................40
4.01 Conditions of Initial Credit Extension ........................40
4.02 Conditions to all Credit Extensions ...........................41
ARTICLE V. REPRESENTATIONS AND WARRANTIES ................................42
5.01 Existence, Qualification and Power; Compliance with Laws ......42
5.02 Authorization; No Contravention ...............................42
5.03 Governmental Authorization; Other Consents ....................43
5.04 Binding Effect ................................................43
5.05 Financial Statements; No Material Adverse Effect ..............43
5.06 Litigation ....................................................44
5.07 No Default ....................................................44
5.08 Ownership of Property; Liens ..................................44
5.09 Environmental Compliance ......................................44
5.10 Insurance .....................................................44
5.11 Taxes .........................................................45
5.12 ERISA Compliance ..............................................45
5.13 Subsidiaries ..................................................46
5.14 Margin Regulations; Investment Company Act;
Public Utility Holding Company Act ............................46
5.15 Disclosure ....................................................46
5.16 Compliance with Laws ..........................................46
5.17 Intellectual Property; Licenses, Etc. .........................46
ARTICLE VI. AFFIRMATIVE COVENANTS .........................................47
6.01 Financial Statements ..........................................47
6.02 Certificates; Other Information ...............................48
6.03 Notices .......................................................49
6.04 Payment of Obligations ........................................50
6.05 Preservation of Existence, Etc. ...............................50
6.06 Maintenance of Properties .....................................50
6.07 Maintenance of Insurance ......................................50
6.08 Compliance with Laws ..........................................50
6.09 Books and Records .............................................51
6.10 Inspection Rights .............................................51
6.11 Use of Proceeds ...............................................51
6.12 Additional Guarantors .........................................51
ARTICLE VII. NEGATIVE COVENANTS ............................................51
7.01 Liens .........................................................51
7.02 Investments ...................................................53
7.03 Indebtedness ..................................................54
7.04 Fundamental Changes ...........................................54
7.05 Dispositions ..................................................55
7.06 Restricted Payments ...........................................55
7.07 Change in Nature of Business ..................................56
7.08 Transactions with Affiliates ..................................56
7.09 Burdensome Agreements .........................................56
7.10 Use of Proceeds ...............................................57
7.11 Financial Covenants ...........................................57
7.12 Intentionally Omitted .........................................57
ARTICLE VIII. EVENTS OF DEFAULT AND REMEDIES ................................58
8.01 Events of Default .............................................58
8.02 Remedies Upon Event of Default ................................60
8.03 Application of Funds ..........................................60
ARTICLE IX. ADMINISTRATIVE AGENT ..........................................61
9.01 Appointment and Authorization of Administrative Agent .........61
9.02 Delegation of Duties ..........................................62
9.03 Liability of Administrative Agent .............................62
9.04 Reliance by Administrative Agent ..............................62
9.05 Notice of Default .............................................63
9.06 Credit Decision; Disclosure of Information by
Administrative Agent ..........................................63
9.07 Indemnification of Administrative Agent .......................64
9.08 Administrative Agent in its Individual Capacity ...............64
9.09 Successor Administrative Agent ................................65
9.10 Administrative Agent May File Proofs of Claim .................65
9.11 Guaranty Matters ..............................................66
9.12 Other Agents; Arrangers and Managers ..........................66
ARTICLE X. MISCELLANEOUS .................................................67
10.01 Amendments, Etc. ..............................................67
10.02 Notices and Other Communications; Facsimile Copies ............68
10.03 No Waiver; Cumulative Remedies ................................69
10.04 Attorney Costs, Expenses and Taxes ............................69
10.05 Indemnification by the Borrower ...............................70
10.06 Payments Set Aside ............................................70
10.07 Successors and Assigns ........................................71
10.08 Confidentiality ...............................................74
10.09 Set-off .......................................................74
10.10 Interest Rate Limitation ......................................75
10.11 Counterparts ..................................................75
10.12 Integration ...................................................75
10.13 Survival of Representations and Warranties ....................76
10.14 Severability ..................................................76
10.15 Tax Forms .....................................................76
10.16 Replacement of Lenders ........................................78
10.17 GOVERNING LAW .................................................79
10.18 WAIVER OF RIGHT TO TRIAL BY JURY ..............................79
10.19 Time of the Essence ...........................................79
10.20 ENTIRE AGREEMENT ..............................................80
10.21 Corporate Reorganization ......................................80
SIGNATURES ..............................................................S-1
SCHEDULES
1.01 Existing Letters of Credit
2.01 Commitments and Pro Rata Shares
4.01 List of Jurisdictions
5.05 Supplement to Interim Financial Statements
5.06 Litigation
5.13 Subsidiaries and Other Equity Investments
7.01 Existing Liens
7.03 Existing Indebtedness
10.02 Administrative Agent's Office, Certain Addresses for Notices
EXHIBITS
Form of
A Committed Loan Notice
B Intentionally Omitted
C Note
D Compliance Certificate
E Assignment and Assumption
F Guaranty
G Opinion Matters
H New Lender Agreement
I Guaranty for CEC Entertainment
CREDIT AGREEMENT
This CREDIT AGREEMENT ("Agreement") is entered into as of December 3, 2002,
among SHOWBIZ MERCHANDISING, L.P., a Texas limited partnership (the "Borrower"),
CEC ENTERTAINMENT, INC., as a Guarantor, each lender from time to time party
hereto (collectively, the "Lenders" and individually, a "Lender"), BANK ONE, NA,
as Syndication Agent, U.S. BANK NATIONAL ASSOCIATION, as Co-Documentation Agent,
FLEET NATIONAL BANK, as Co-Documentation Agent, and BANK OF AMERICA, N.A., as
Administrative Agent and L/C Issuer.
The Borrower has requested that the Lenders provide a revolving credit
facility, and the Lenders are willing to do so on the terms and conditions set
forth herein. In consideration of the mutual covenants and agreements herein
contained, the parties hereto covenant and agree as follows:
ARTICLE I.
DEFINITIONS AND ACCOUNTING TERMS
1.01 Defined Terms.
As used in this Agreement, the following terms shall have the meanings set
forth below:
"Administrative Agent" means Bank of America in its capacity as
administrative agent under any of the Loan Documents, or any successor
administrative agent.
"Administrative Agent's Office" means the Administrative Agent's address
and, as appropriate, account as set forth on Schedule 10.02, or such other
address or account as the Administrative Agent may from time to time notify the
Borrower and the Lenders.
"Administrative Questionnaire" means an Administrative Questionnaire in a
form supplied by the Administrative Agent.
"Affiliate" means, with respect to any Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified. "Control"
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of a Person, whether through the
ability to exercise voting power, by contract or otherwise. "Controlling" and
"Controlled" have meanings correlative thereto. Without limiting the generality
of the foregoing, a Person shall be deemed to be Controlled by another Person if
such other Person possesses, directly or indirectly, power to vote 10% or more
of the securities having ordinary voting power for the election of directors,
managing general partners or the equivalent.
"Agent-Related Persons" means the Administrative Agent, together with its
Affiliates (including, in the case of Bank of America in its capacity as the
Administrative Agent, the Arranger), and the officers, directors, employees,
agents and attorneys-in-fact of such Persons and Affiliates.
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"Aggregate Commitments" means the Commitments of all the Lenders.
"Agreement" means this Credit Agreement.
"Applicable Rate" means the following percentages per annum, based upon the
Consolidated Leverage Ratio as set forth in the most recent Compliance
Certificate received by the Administrative Agent pursuant to Section 6.02(b):
Applicable
Rate for
Eurodollar
Rate Loans
and Applicable
Standby Commercial Rate for
Pricing Consolidated Commitment Letters of Letters of Base Rate
Level Leverage Ratio Fee Credit Credit Loans
------- -------------- ---------- ---------- ---------- ----------
1 <= 2.25:1 20.0 bps 75.0 bps 56.25 bps 0.0 bps
2 >2.25:1 22.5 bps 87.5 bps 65.625 bps 0.0 bps
but <= 2.75:1
3 >2.75:1 25.0 bps 112.5 bps 84.375 bps 0.0 bps
but <= 3.00:1
4 >3.00:1 30.0 bps 150.0 bps 112.5 bps 0.0 bps
Any increase or decrease in the Applicable Rate resulting from a change in the
Consolidated Leverage Ratio shall become effective as of the first Business Day
immediately following the date a Compliance Certificate is delivered pursuant to
Section 6.02(b); provided, however, that if a Compliance Certificate is not
delivered when due in accordance with such Section, then Pricing Level 4 shall
apply as of the first Business Day after the date on which such Compliance
Certificate was required to have been delivered until the first Business Day
after the date on which such Compliance Certificate is actually delivered,
whereupon the Applicable Rate shall be determined by the Consolidated Leverage
Ratio reflected therein. The Applicable Rate in effect from the Closing Date
through the earlier of (a) March 31, 2003 or (b) that date on which the
Compliance Certificate related to CEC Entertainment's fiscal year 2002 financial
statements is delivered by Borrower to Administrative Agent, shall be determined
based upon Pricing Level 2.
"Arranger" means Banc of America Securities LLC, in its capacity as sole
lead arranger and sole book manager.
"Assignment and Assumption" means an Assignment and Assumption
substantially in the form of Exhibit E.
2
"Attorney Costs" means and includes all reasonable fees, expenses and
disbursements to the extent actually incurred of any law firm or other external
legal counsel.
"Attributable Indebtedness" means, on any date, (a) in respect of any
capital lease of any Person, the capitalized amount thereof that would appear on
a balance sheet of such Person prepared as of such date in accordance with GAAP,
and (b) in respect of any Synthetic Lease Obligation, the capitalized amount of
the remaining lease payments under the relevant lease that would appear on a
balance sheet of such Person prepared as of such date in accordance with GAAP if
such lease were accounted for as a capital lease.
"Audited Financial Statements" means the audited consolidated balance sheet
of CEC Entertainment and its Subsidiaries for the fiscal years ended December
30, 2001, December 31, 2000 and January 2, 2000 and the related consolidated
statements of income or operations, shareholders' equity and cash flows for each
such fiscal year of CEC Entertainment and its Subsidiaries, including the notes
thereto, audited by independent public accountants of recognized national
standing and prepared in accordance with GAAP.
"Availability Period" means the period from and including the Closing Date
to the earliest of (a) the Maturity Date, (b) the date of termination of the
Aggregate Commitments pursuant to Section 2.06, and (c) the date of termination
of the commitment of each Lender to make Loans and of the obligation of the L/C
Issuer to make L/C Credit Extensions pursuant to Section 8.02.
"Bank of America" means Bank of America, N.A. and its successors.
"Base Rate" means for any day a fluctuating rate per annum equal to the
higher of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest
in effect for such day as publicly announced from time to time by Bank of
America as its "prime rate." The "prime rate" is a rate set by Bank of America
based upon various factors including Bank of America's costs and desired return,
general economic conditions and other factors, and is used as a reference point
for pricing some loans, which may be priced at, above, or below such announced
rate. Any change in such rate announced by Bank of America shall take effect at
the opening of business on the day specified in the public announcement of such
change.
"Base Rate Committed Loan" means a Committed Loan that is a Base Rate Loan.
"Base Rate Loan" means a Loan that bears interest based on the Base Rate.
"Borrower" has the meaning specified in the introductory paragraph hereto.
"Borrowing" means a Committed Borrowing.
"Business Day" means any day other than a Saturday, Sunday or other day on
which commercial banks are authorized to close under the Laws of, or are in fact
closed in, the state where the Administrative Agent's Office is located and, if
such day relates to any Eurodollar Rate Loan, means any such day on which
dealings in Dollar deposits are conducted by and between banks in the London
interbank eurodollar market.
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"Cash Collateralize" has the meaning specified in Section 2.03(g).
"CEC Entertainment" means CEC Entertainment, Inc., a Kansas corporation.
"Change of Control" means, with respect to any Person, an event or series
of events by which any "person" or "group" (as such terms are used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, but excluding any
employee benefit plan of such person or its subsidiaries, and any person or
entity acting in its capacity as trustee, agent or other fiduciary or
administrator of any such plan) becomes the "beneficial owner" (as defined in
Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a
person or group shall be deemed to have "beneficial ownership" of all securities
that such person or group has the right to acquire (such right, an "option
right"), whether such right is exercisable immediately or only after the passage
of time), directly or indirectly, of 35% or more of the equity securities of
such Person entitled to vote for members of the board of directors or equivalent
governing body of such Person on a fully-diluted basis (and taking into account
all such securities that such person or group has the right to acquire pursuant
to any option right).
"Closing Date" means the first date all the conditions precedent in Section
4.01 are satisfied or waived in accordance with Section 4.01 (or, in the case of
Section 4.01(b), waived by the Person entitled to receive the applicable
payment).
"Code" means the Internal Revenue Code of 1986.
"Commitment" means, as to each Lender, its obligation to (a) make Committed
Loans to the Borrower pursuant to Section 2.01, and (b) purchase participations
in L/C Obligations, in an aggregate principal amount at any one time outstanding
not to exceed the amount set forth opposite such Lender's name on Schedule 2.01
or in the Assignment and Assumption or New Lender Agreement pursuant to which
such Lender becomes a party hereto, as applicable, as such amount may be
adjusted from time to time in accordance with this Agreement.
"Committed Borrowing" means a borrowing consisting of simultaneous
Committed Loans of the same Type and, in the case of Eurodollar Rate Loans,
having the same Interest Period made by each of the Lenders pursuant to Section
2.01.
"Committed Loan" has the meaning specified in Section 2.01.
"Committed Loan Notice" means a notice of (a) a Committed Borrowing, (b) a
conversion of Committed Loans from one Type to the other, or (c) a continuation
of Eurodollar Rate Loans, pursuant to Section 2.02(a), which, if in writing,
shall be substantially in the form of Exhibit A.
"Compliance Certificate" means a certificate substantially in the form of
Exhibit D.
"Consolidated EBITDA" means, for any period, for CEC Entertainment and its
Subsidiaries on a consolidated basis, an amount equal to Consolidated Net Income
for such period plus (a) the following to the extent deducted in calculating
such Consolidated Net Income: (i) Consolidated Interest Charges for such period,
(ii) the provision for federal, state, local and foreign income taxes payable by
CEC Entertainment and its Subsidiaries for such period, (iii) the amount of
4
depreciation and amortization expense deducted in determining such Consolidated
Net Income and (iv) other expenses of CEC Entertainment and its Subsidiaries
reducing such Consolidated Net Income which do not represent a cash item in such
period or any future period and minus (b) all non-cash items increasing
Consolidated Net Income for such period.
"Consolidated EBITDAR" means, for any period, for CEC Entertainment and its
Subsidiaries on a consolidated basis, (a) Consolidated EBITDA for such period
plus (b) all lease and rent expense for any real and personal property for CEC
Entertainment and its Subsidiaries for such period.
"Consolidated Fixed Charge Coverage Ratio" means, as of the date of
determination, with the period being considered, the last four fiscal quarters
ending with the final day of the most recent quarter, the ratio of (a) the
result of (i) Consolidated EBITDAR for CEC Entertainment and its Subsidiaries
for such period, minus (ii) all tax liabilities, assessments and governmental
charges paid in cash by CEC Entertainment and its Subsidiaries during such
period, minus (iii) Restricted Payments made by CEC Entertainment and its
Subsidiaries during such period, and minus (iv) maintenance capital expenditures
for CEC Entertainment and its Subsidiaries during such period which shall be
deemed to equal $20,000 per unit, to (b) sum of (i) Consolidated Interest
Charges for such period, plus (ii) rental payments made during such period by
CEC Entertainment and its Subsidiaries, plus (iii) Indebtedness with a maturity
of one year or longer ("Long Term Debt") of CEC Entertainment and its
Subsidiaries, which matures during such period, plus scheduled payments of any
other Indebtedness during such period, plus (iv) payments made on leases which
must be reflected on CEC Entertainment's or a Subsidiary's balance sheet as an
asset and corresponding liability ("Capital Lease") during such period.
"Consolidated Funded Indebtedness" means, as of any date of determination,
for CEC Entertainment and its Subsidiaries on a consolidated basis, the sum of
(a) the outstanding principal amount of all obligations, whether current or
long-term, for borrowed money (including Obligations hereunder) and all
obligations evidenced by bonds, debentures, notes, loan agreements or other
similar instruments, (b) all purchase money Indebtedness, (c) all direct
obligations arising under letters of credit (including standby and commercial),
bankers' acceptances, bank guaranties, surety bonds and similar instruments, (d)
all obligations in respect of the deferred purchase price of property or
services (other than trade accounts payable in the ordinary course of business),
(e) Attributable Indebtedness in respect of capital leases and Synthetic Lease
Obligations, (f) without duplication, all Guarantees with respect to outstanding
Indebtedness of the types specified in clauses (a) through (e) above of Persons
other than CEC Entertainment or any Subsidiary, and (g) all Indebtedness of the
types referred to in clauses (a) through (f) above of any partnership or joint
venture (other than a joint venture that is itself a corporation or limited
liability company) in which CEC Entertainment or a Subsidiary is a general
partner or joint venturer, unless such Indebtedness is expressly made
non-recourse to CEC Entertainment or such Subsidiary.
"Consolidated Interest Charges" means, for any period, for CEC
Entertainment and its Subsidiaries on a consolidated basis, the sum of (a) all
interest, premium payments, debt discount, fees, charges and related expenses of
CEC Entertainment and its Subsidiaries in connection with borrowed money
(including capitalized interest) or in connection with the deferred purchase
price of assets, in each case to the extent treated as interest in accordance
5
with GAAP, and (b) the portion of rent expense of CEC Entertainment and its
Subsidiaries with respect to such period under capital leases that is treated as
interest in accordance with GAAP.
"Consolidated Leverage Ratio" means, as of any date of determination, with
the period being considered, the last four fiscal quarters ending with the final
day of the most recent quarter, the ratio of (a) (i) Consolidated Funded
Indebtedness as of such date plus (ii) all lease and rent expense for any real
and personal property for CEC Entertainment and its Subsidiaries for the four
fiscal quarters most recently ended, multiplied by eight, to (b) Consolidated
EBITDAR for the period of the four fiscal quarters most recently ended for which
CEC Entertainment has delivered financial statements pursuant to Section 6.01(a)
or (b).
"Consolidated Net Income" means, for any period, for CEC Entertainment and
its Subsidiaries on a consolidated basis, the net income of CEC Entertainment
and its Subsidiaries (excluding extraordinary gains but including extraordinary
losses) for that period.
"Consolidated Net Worth" means, as of any date of determination, for CEC
Entertainment and its Subsidiaries on a consolidated basis, Shareholders' Equity
of CEC Entertainment and its Subsidiaries on that date.
"Contractual Obligation" means, as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Control" has the meaning specified in the definition of "Affiliate."
"Corporate Reorganization" means the plan of corporate reorganization
pursuant to which CEC Entertainment and its Subsidiaries shall convey a portion
of its assets and obligations to CEC Entertainment Holdings, LLC and ShowBiz
Merchandising, L.P.
"Credit Extension" means each of the following: (a) a Borrowing and (b) an
L/C Credit Extension.
"Debtor Relief Laws" means the Bankruptcy Code of the United States, and
all other liquidation, conservatorship, bankruptcy, assignment for the benefit
of creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief Laws of the United States or other
applicable jurisdictions from time to time in effect and affecting the rights of
creditors generally.
"Default" means any event or condition that constitutes an Event of Default
or that, with the giving of any notice, the passage of time, or both, would be
an Event of Default.
"Default Rate" means an interest rate equal to (a) the Base Rate plus (b)
the Applicable Rate, if any, applicable to Base Rate Loans plus (c) 2% per
annum; provided, however, that with respect to a Eurodollar Rate Loan, the
Default Rate shall be an interest rate equal to the interest rate (including any
Applicable Rate) otherwise applicable to such Loan plus 2% per annum, in each
case to the fullest extent permitted by applicable Laws.
6
"Defaulting Lender" means any Lender that (a) has failed to fund any
portion of the Committed Loans or participations in L/C Obligations required to
be funded by it hereunder within one Business Day of the date required to be
funded by it hereunder, (b) has otherwise failed to pay over to the
Administrative Agent or any other Lender any other amount required to be paid by
it hereunder within one Business Day of the date when due, unless the subject of
a good faith dispute, or (c) has been deemed insolvent or become the subject of
a bankruptcy or insolvency proceeding.
"Disposition" or "Dispose" means the sale, transfer, license, lease or
other disposition (including any sale and leaseback transaction) of any property
by any Person, including any sale, assignment, transfer or other disposal, with
or without recourse, of any notes or accounts receivable or any rights and
claims associated therewith.
"Dollar" and "$" mean lawful money of the United States.
"Eligible Assignee" has the meaning specified in Section 10.07(g).
"Environmental Laws" means any and all Federal, state, local, and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or governmental
restrictions relating to pollution and the protection of the environment or the
release of any materials into the environment, including those related to
hazardous substances or wastes, air emissions and discharges to waste or public
systems.
"Environmental Liability" means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower, CEC Entertainment, any other Loan
Party or any of their respective Subsidiaries directly or indirectly resulting
from or based upon (a) violation of any Environmental Law, (b) the generation,
use, handling, transportation, storage, treatment or disposal of any Hazardous
Materials, (c) exposure to any Hazardous Materials, (d) the release or
threatened release of any Hazardous Materials into the environment or (e) any
contract, agreement or other consensual arrangement pursuant to which liability
is assumed or imposed with respect to any of the foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974.
"ERISA Affiliate" means any trade or business (whether or not incorporated)
under common control with CEC Entertainment within the meaning of Section 414(b)
or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of
provisions relating to Section 412 of the Code).
"ERISA Event" means (a) a Reportable Event with respect to a Pension Plan;
(b) a withdrawal by the Borrower or CEC Entertainment or any ERISA Affiliate
from a Pension Plan subject to Section 4063 of ERISA during a plan year in which
it was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a
cessation of operations that is treated as such a withdrawal under Section
4062(e) of ERISA; (c) a complete or partial withdrawal by the Borrower or CEC
Entertainment or any ERISA Affiliate from a Multiemployer Plan or notification
that a Multiemployer Plan is in reorganization; (d) the filing of a notice of
7
intent to terminate, the treatment of a Plan amendment as a termination under
Sections 4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC
to terminate a Pension Plan or Multiemployer Plan; (e) an event or condition
which constitutes grounds under Section 4042 of ERISA for the termination of, or
the appointment of a trustee to administer, any Pension Plan or Multiemployer
Plan; or (f) the imposition of any liability under Title IV of ERISA, other than
for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the
Borrower or CEC Entertainment or any ERISA Affiliate.
"Eurodollar Rate" means for any Interest Period with respect to any
Eurodollar Rate Loan (rounded upwards, as necessary, to the nearest 1/100th of 1
percent):
(a) the rate per annum equal to the rate determined by the
Administrative Agent to be the offered rate that appears on page 3750 of
the Telerate screen (or any successor thereto) that displays an average
British Bankers Association LIBOR Rate for deposits in Dollars (for
delivery on the first day of such Interest Period) with a term equivalent
to such Interest Period, determined as of approximately 11:00 a.m. (London
time) two Business Days prior to the first day of such Interest Period, or
(b) if the rate referenced in the preceding clause (a) does not appear
on such page or service or such page or service shall not be available, the
rate per annum equal to the rate determined by the Administrative Agent to
be the offered rate on such other page or other service that displays an
average British Bankers Association LIBOR Rate for deposits in Dollars (for
delivery on the first day of such Interest Period) with a term equivalent
to such Interest Period, determined as of approximately 11:00 a.m. (London
time) two Business Days prior to the first day of such Interest Period, or
(c) if the rates referenced in the preceding clauses (a) and (b) are
not available, the rate per annum determined by the Administrative Agent as
the rate of interest at which deposits in Dollars for delivery on the first
day of such Interest Period in same day funds in the approximate amount of
the Eurodollar Rate Loan being made, continued or converted by Bank of
America and with a term equivalent to such Interest Period would be offered
by Bank of America's London Branch to major banks in the London interbank
eurodollar market at their request at approximately 4:00 p.m. (London time)
two Business Days prior to the first day of such Interest Period.
"Eurodollar Rate Loan" means a Committed Loan that bears interest at a rate
based on the Eurodollar Rate.
"Event of Default" has the meaning specified in Section 8.01.
"Existing Credit Agreement" means that certain Credit Agreement dated as of
July 14, 2000 among CEC Entertainment, Bank One, Texas, National Association, as
the administrative agent, Suntrust Bank, as the syndication agent, and the
Lenders party thereto.
"Existing Letters of Credit" means, collectively, the letters of credit
specifically described on Schedule 1.01.
8
"Federal Funds Rate" means, 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 on the Business Day next
succeeding such day; provided that (a) if such day 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 (b) if no such rate is so published on such next succeeding Business Day,
the Federal Funds Rate for such day shall be the average rate (rounded upward,
if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of America on
such day on such transactions as determined by the Administrative Agent.
"Fee Letter" means the letter agreement, dated October 3, 2002, among CEC
Entertainment, the Administrative Agent and the Arranger.
"Foreign Lender" has the meaning specified in Section 10.15(a)(i).
"FRB" means the Board of Governors of the Federal Reserve System of the
United States.
"GAAP" means generally accepted accounting principles in the United States
set forth in the opinions and pronouncements of the Accounting Principles Board
and the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or such other
principles as may be approved by a significant segment of the accounting
profession in the United States, that are applicable to the circumstances as of
the date of determination, consistently applied.
"Governmental Authority" means any nation or government, any state or other
political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, administrative tribunal, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.
"Guarantors" means (i) at all times the Required Guarantors, and (ii) any
other entity which has executed a Guaranty, and such Guaranty has not been
released. The initial Guarantors shall include SPT Distribution Company, Inc.,
TJH Restaurant Group, Inc., CEC Entertainment, and CEC Entertainment Holdings,
LLC.
"Guaranty" means the Guaranty made by the Guarantors in favor of the
Administrative Agent on behalf of the Lenders, substantially in the form of
Exhibit F and Exhibit I.
"Guarantee" means, as to any Person, (a) any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation payable or performable by
another Person (the "primary obligor") in any manner, whether directly or
indirectly, and including any obligation of such Person, direct or indirect, (i)
to purchase or pay (or advance or supply funds for the purchase or payment of)
such Indebtedness or other obligation, (ii) to purchase or lease property,
securities or services for the purpose of assuring the obligee in respect of
such Indebtedness or other obligation of the payment or performance of such
Indebtedness or other obligation, (iii) to maintain working capital, equity
capital or any other financial statement condition or liquidity or level of
9
income or cash flow of the primary obligor so as to enable the primary obligor
to pay such Indebtedness or other obligation, or (iv) entered into for the
purpose of assuring in any other manner the obligee in respect of such
Indebtedness or other obligation of the payment or performance thereof or to
protect such obligee against loss in respect thereof (in whole or in part), or
(b) any Lien on any assets of such Person securing any Indebtedness or other
obligation of any other Person, whether or not such Indebtedness or other
obligation is assumed by such Person. The amount of any Guarantee shall be
deemed to be an amount equal to the stated or determinable amount of the related
primary obligation, or portion thereof, in respect of which such Guarantee is
made or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof as determined by the guaranteeing Person in good
faith. The term "Guarantee" as a verb has a corresponding meaning.
"Hazardous Materials" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos-containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"Indebtedness" means, as to any Person at a particular time, without
duplication, all of the following, whether or not included as indebtedness or
liabilities in accordance with GAAP:
(a) all obligations of such Person for borrowed money and all
obligations of such Person evidenced by bonds, debentures, notes, loan
agreements or other similar instruments;
(b) all direct or contingent obligations of such Person arising under
letters of credit (including standby and commercial), bankers' acceptances,
bank guaranties, surety bonds and similar instruments;
(c) net obligations of such Person under any Swap Contract;
(d) all obligations of such Person to pay the deferred purchase price
of property or services (other than trade accounts payable in the ordinary
course of business);
(e) indebtedness (excluding prepaid interest thereon) secured by a
Lien on property owned or being purchased by such Person (including
indebtedness arising under conditional sales or other title retention
agreements), whether or not such indebtedness shall have been assumed by
such Person or is limited in recourse;
(f) capital leases and Synthetic Lease Obligations; and
(g) all Guarantees of such Person in respect of any of the foregoing.
For all purposes hereof, the Indebtedness of any Person shall include the
Indebtedness of any partnership or joint venture (other than a joint venture
that is itself a corporation or limited liability company) in which such Person
is a general partner or a joint venturer, unless such Indebtedness is expressly
made non-recourse to such Person. The amount of any net obligation under any
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Swap Contract on any date shall be deemed to be the Swap Termination Value
thereof as of such date. The amount of any capital lease or Synthetic Lease
Obligation as of any date shall be deemed to be the amount of Attributable
Indebtedness in respect thereof as of such date.
"Indemnified Liabilities" has the meaning set forth in Section 10.05.
"Indemnitees" has the meaning set forth in Section 10.05.
"Intangible Assets" means assets that are considered to be intangible
assets under GAAP, including customer lists, goodwill, computer software,
copyrights, trade names, trademarks, patents, franchises, licenses, unamortized
deferred charges, unamortized debt discount and capitalized research and
development costs.
"Interest Payment Date" means, (a) as to any Loan other than a Base Rate
Loan, the last day of each Interest Period applicable to such Loan and the
Maturity Date; provided, however, that if any Interest Period for a Eurodollar
Rate Loan exceeds three months, the respective dates that fall every three
months after the beginning of such Interest Period shall also be Interest
Payment Dates; and (b) as to any Base Rate Loan, the last Business Day of each
March, June, September and December and the Maturity Date.
"Interest Period" means, as to each Eurodollar Rate Loan, the period
commencing on the date such Eurodollar Rate Loan is disbursed or converted to or
continued as a Eurodollar Rate Loan and ending on the date one, two, three or
six months thereafter, as selected by the Borrower in its Committed Loan Notice;
provided that:
(i) any Interest Period that would otherwise end on a day that is not
a Business Day shall be extended to the next succeeding Business Day unless
such Business Day falls in another calendar month, in which case such
Interest Period shall end on the next preceding Business Day;
(ii) 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 the calendar month at the end of such Interest
Period; and
(iii) no Interest Period shall extend beyond the Maturity Date.
"Investment" means, as to any Person, any direct or indirect acquisition or
investment by such Person, whether by means of (a) the purchase or other
acquisition of capital stock or other securities of another Person, (b) a loan,
advance or capital contribution to, Guarantee or assumption of debt of, or
purchase or other acquisition of any other debt or equity participation or
interest in, another Person, including any partnership or joint venture interest
in such other Person, or (c) the purchase or other acquisition (in one
transaction or a series of transactions) of assets of another Person that
constitute a business unit. For purposes of covenant compliance, the amount of
any Investment shall be the amount actually invested, without adjustment for
subsequent increases or decreases in the value of such Investment.
"IP Rights" has the meaning set forth in Section 5.17.
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"IRS" means the United States Internal Revenue Service.
"Laws" means, collectively, all international, foreign, Federal, state and
local statutes, treaties, rules, guidelines, regulations, ordinances, codes and
administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law.
"L/C Advance" means, with respect to each Lender, such Lender's funding of
its participation in any L/C Borrowing in accordance with its Pro Rata Share.
"L/C Borrowing" means an extension of credit resulting from a drawing under
any Letter of Credit which has not been reimbursed on the date when due or
refinanced as a Committed Borrowing.
"L/C Credit Extension" means, with respect to any Letter of Credit, the
issuance thereof or extension of the expiry date thereof, or the renewal or
increase of the amount thereof.
"L/C Issuer" means Bank of America in its capacity as issuer of Letters of
Credit hereunder, or any successor issuer of Letters of Credit hereunder.
"L/C Obligations" means, as at any date of determination, the aggregate
undrawn amount of all outstanding Letters of Credit plus the aggregate of all
Unreimbursed Amounts, including all L/C Borrowings.
"Lender" has the meaning specified in the introductory paragraph hereto
and, as the context requires, includes the L/C Issuer.
"Lending Office" means, as to any Lender, the office or offices of such
Lender described as such in such Lender's Administrative Questionnaire, or such
other office or offices as a Lender may from time to time notify the Borrower
and the Administrative Agent.
"Letter of Credit" means any letter of credit issued hereunder and shall
include the Existing Letter(s) of Credit. A Letter of Credit may be a commercial
letter of credit or a standby letter of credit.
"Letter of Credit Application" means an application and agreement for the
issuance or amendment of a Letter of Credit in the form from time to time in use
by the L/C Issuer.
"Letter of Credit Expiration Date" means the day that is seven days prior
to the Maturity Date then in effect (or, if such day is not a Business Day, the
next preceding Business Day).
"Letter of Credit Sublimit" means an amount equal to $15,000,000. The
Letter of Credit Sublimit is part of, and not in addition to, the Aggregate
Commitments.
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"Lien" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge, or preference,
priority or other security interest or preferential arrangement of any kind or
nature whatsoever (including any conditional sale or other title retention
agreement, and any financing lease having substantially the same economic effect
as any of the foregoing).
"Loan" means an extension of credit by a Lender to the Borrower under
Article II in the form of a Committed Loan.
"Loan Documents" means this Agreement, each Note, the Fee Letter, the
Guaranty, and Swap Contracts of the Borrower to which a Lender or its Affiliates
is a party.
"Loan Parties" means, collectively, the Borrower and each Guarantor.
"Material Adverse Effect" means (a) a material adverse change in, or a
material adverse effect upon, the operations, business, properties, liabilities
(actual or contingent), operations, or condition (financial or otherwise) of CEC
Entertainment or CEC Entertainment and its Subsidiaries taken as a whole; (b) a
material impairment of the ability of any Loan Party to perform its obligations
under any Loan Document to which it is a party; or (c) a material adverse effect
upon the legality, validity, binding effect or enforceability against any Loan
Party of any Loan Document to which it is a party.
"Maturity Date" means the later of (a) three years from the Closing Date,
and (b) if maturity is extended pursuant to Section 2.14, such extended maturity
date as determined pursuant to such Section.
"Multiemployer Plan" means any employee benefit plan of the type described
in Section 4001(a)(3) of ERISA, to which the Borrower or CEC Entertainment or
any ERISA Affiliate makes or is obligated to make contributions, or during the
preceding five plan years, has made or been obligated to make contributions.
"Net Cash Proceeds" means:
(a) with respect to the sale of any asset by CEC Entertainment or any
Subsidiary, the excess, if any, of (i) the sum of cash and cash equivalents
received in connection with such sale (including any cash received by way
of deferred payment pursuant to, or by monetization of, a note receivable
or otherwise, but only as and when so received) over (ii) the sum of (A)
the principal amount of any Indebtedness that is secured by such asset and
that is required to be repaid in connection with the sale thereof (other
than Indebtedness under the Loan Documents), (B) the out-of-pocket expenses
incurred by CEC Entertainment or any Subsidiary in connection with such
sale and (C) income taxes reasonably estimated to be actually payable
within two years of the date of the relevant asset sale as a result of any
gain recognized in connection therewith; and
(b) with respect to the sale of any capital stock or other equity
interest by CEC Entertainment, the excess of (i) the sum of the cash and
cash equivalents received in connection with such sale over (ii) the
underwriting discounts and commissions, and other out-of-pocket expenses,
incurred by CEC Entertainment in connection with such sale.
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"Note" means a promissory note made by the Borrower in favor of a Lender
evidencing Loans made by such Lender, substantially in the form of Exhibit C.
"Obligations" means all advances to, and debts, liabilities, obligations,
covenants and duties of, any Loan Party arising under any Loan Document or
otherwise with respect to any Loan or Letter of Credit, whether direct or
indirect (including those acquired by assumption), absolute or contingent, due
or to become due, now existing or hereafter arising and including interest and
fees that accrue after the commencement by or against any Loan Party or any
Affiliate thereof of any proceeding under any Debtor Relief Laws naming such
Person as the debtor in such proceeding, regardless of whether such interest and
fees are allowed claims in such proceeding, including under Swap Contracts of
the Borrower to which a Lender or its Affiliate is a party.
"Organization Documents" means, (a) with respect to any corporation, the
certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction);
(b) with respect to any limited liability company, the certificate or articles
of formation or organization and operating agreement; and (c) with respect to
any partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.
"Outstanding Amount" means (i) with respect to Committed Loans on any date,
the aggregate outstanding principal amount thereof after giving effect to any
borrowings and prepayments or repayments of Committed Loans occurring on such
date; and (ii) with respect to any L/C Obligations on any date, the amount of
such L/C Obligations on such date after giving effect to any L/C Credit
Extension occurring on such date and any other changes in the aggregate amount
of the L/C Obligations as of such date, including as a result of any
reimbursements of outstanding unpaid drawings under any Letters of Credit or any
reductions in the maximum amount available for drawing under Letters of Credit
taking effect on such date.
"Participant" has the meaning specified in Section 10.07(d).
"PBGC" means the Pension Benefit Guaranty Corporation.
"Pension Plan" means any "employee pension benefit plan" (as such term is
defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is
subject to Title IV of ERISA and is sponsored or maintained by the Borrower or
CEC Entertainment or any ERISA Affiliate or to which the Borrower or CEC
Entertainment or any ERISA Affiliate contributes or has an obligation to
contribute, or in the case of a multiple employer or other plan described in
Section 4064(a) of ERISA, has made contributions at any time during the
immediately preceding five plan years.
"Person" means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.
14
"Plan" means any "employee benefit plan" (as such term is defined in
Section 3(3) of ERISA) established by the Borrower or CEC Entertainment or, with
respect to any such plan that is subject to Section 412 of the Code or Title IV
of ERISA, any ERISA Affiliate.
"Pro Rata Share" means, with respect to each Lender at any time, a fraction
(expressed as a percentage, carried out to the ninth decimal place), the
numerator of which is the amount of the Commitment of such Lender at such time
and the denominator of which is the amount of the Aggregate Commitments at such
time; provided that if the commitment of each Lender to make Loans and the
obligation of the L/C Issuer to make L/C Credit Extensions have been terminated
pursuant to Section 8.02, then the Pro Rata Share of each Lender shall be
determined based on the Pro Rata Share of such Lender immediately prior to such
termination and after giving effect to any subsequent assignments made pursuant
to the terms hereof. The initial Pro Rata Share of each Lender is set forth
opposite the name of such Lender on Schedule 2.01 or in the Assignment and
Assumption pursuant to which such Lender becomes a party hereto, as applicable.
"Register" has the meaning set forth in Section 10.07(c).
"Reportable Event" means any of the events set forth in Section 4043(c) of
ERISA, other than events for which the 30 day notice period has been waived.
"Request for Credit Extension" means (a) with respect to a Borrowing,
conversion or continuation of Committed Loans, a Committed Loan Notice, and (b)
with respect to an L/C Credit Extension, a Letter of Credit Application.
"Required Guarantor" means CEC Entertainment, TJH Restaurant Group, Inc.,
CEC Entertainment Holdings, LLC, and any other Subsidiary which is or is
required to be a Guarantor. A Subsidiary is required to be a Guarantor if the
failure to provide such Guaranty results or would result in a breach of Section
7.02(f), Section 7.02(g), Section 7.02(h) and/or Section 7.02(i).
"Required Lenders" means, as of any date of determination, Lenders having
more than 50% of the Aggregate Commitments or, if the commitment of each Lender
to make Loans and the obligation of the L/C Issuer to make L/C Credit Extensions
have been terminated pursuant to Section 8.02, Lenders holding in the aggregate
more than 50% of the Total Outstandings (with the aggregate amount of each
Lender's risk participation and funded participation in L/C Obligations being
deemed "held" by such Lender for purposes of this definition); provided that the
Commitment of, and the portion of the Total Outstandings held or deemed held by,
any Defaulting Lender shall be excluded for purposes of making a determination
of Required Lenders.
"Responsible Officer" means the chief executive officer, president, chief
financial officer, controller, treasurer or assistant treasurer of a Loan Party,
and, for CEC Entertainment Holdings, LLC, TJH Restaurant Group, Inc., and SPT
Distribution Company, Inc., the vice president. Any document delivered hereunder
that is signed by a Responsible Officer of a Loan Party shall be conclusively
presumed to have been authorized by all necessary corporate, partnership and/or
other action on the part of such Loan Party and such Responsible Officer shall
be conclusively presumed to have acted on behalf of such Loan Party.
15
"Restricted Payment" means any dividend or other distribution (whether in
cash, securities or other property) with respect to any capital stock or other
equity interest of the Borrower or CEC Entertainment or any Subsidiary, or any
payment (whether in cash, securities or other property), including any sinking
fund or similar deposit, on account of the purchase, redemption, retirement,
acquisition, cancellation or termination of any such capital stock or other
equity interest or of any option, warrant or other right to acquire any such
capital stock or other equity interest.
"SEC" means the Securities and Exchange Commission, or any Governmental
Authority succeeding to any of its principal functions.
"Shareholders' Equity" means, as of any date of determination, consolidated
shareholders' equity of CEC Entertainment and its Subsidiaries as of that date
determined in accordance with GAAP.
"Subsidiary" of a Person means a corporation, partnership, joint venture,
limited liability company or other business entity of which a majority of the
shares of securities or other interests having ordinary voting power for the
election of directors or other governing body (other than securities or
interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned, or the management of which is otherwise
controlled, directly, or indirectly through one or more intermediaries, or both,
by such Person. Unless otherwise specified, all references herein to a
"Subsidiary" or to "Subsidiaries" shall refer to a Subsidiary or Subsidiaries of
CEC Entertainment.
"Swap Contract" means (a) any and all rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or forward bond or
forward bond price or forward bond index transactions, interest rate options,
forward foreign exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions
of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a "Master Agreement"), including
any such obligations or liabilities under any Master Agreement.
"Swap Termination Value" means, in respect of any one or more Swap
Contracts, after taking into account the effect of any legally enforceable
netting agreement relating to such Swap Contracts, (a) for any date on or after
the date such Swap Contracts have been closed out and termination value(s)
determined in accordance therewith, such termination value(s), and (b) for any
date prior to the date referenced in clause (a), the amount(s) determined as the
xxxx-to-market value(s) for such Swap Contracts, as determined based upon one or
16
more mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts (which may include a Lender or any Affiliate of a
Lender).
"Synthetic Lease Obligation" means the monetary obligation of a Person
under (a) a so-called synthetic, off-balance sheet or tax retention lease, or
(b) an agreement for the use or possession of property creating obligations that
do not appear on the balance sheet of such Person but which, upon the insolvency
or bankruptcy of such Person, would be characterized as the indebtedness of such
Person (without regard to accounting treatment).
"Threshold Amount" means $2,500,000.
"Total Outstandings" means the aggregate Outstanding Amount of all Loans
and all L/C Obligations.
"Type" means, with respect to a Committed Loan, its character as a Base
Rate Loan or a Eurodollar Rate Loan.
"Unfunded Pension Liability" means the excess of a Pension Plan's benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of that
Pension Plan's assets, determined in accordance with the assumptions used for
funding the Pension Plan pursuant to Section 412 of the Code for the applicable
plan year.
"United States" and "U.S." mean the United States of America.
"Unreimbursed Amount" has the meaning set forth in Section 2.03(c)(i).
1.02 Other Interpretive Provisions.
With reference to this Agreement and each other Loan Document, unless
otherwise specified herein or in such other Loan Document:
(a) The meanings of defined terms are equally applicable to the singular
and plural forms of the defined terms.
(b) (i) The words "herein," "hereto," "hereof" and "hereunder" and words of
similar import when used in any Loan Document shall refer to such Loan Document
as a whole and not to any particular provision thereof.
(ii) Article, Section, Exhibit and Schedule references are to the Loan
Document in which such reference appears.
(iii) The term "including" is by way of example and not limitation.
(iv) The term "documents" includes any and all instruments, documents,
agreements, certificates, notices, reports, financial statements and other
writings, however evidenced, whether in physical or electronic form.
17
(c) In the computation of periods of time from a specified date to a later
specified date, the word "from" means "from and including;" the words "to" and
"until" each mean "to but excluding;" and the word "through" means "to and
including."
(d) Section headings herein and in the other Loan Documents are included
for convenience of reference only and shall not affect the interpretation of
this Agreement or any other Loan Document.
1.03 Accounting Terms.
(a) All accounting terms not specifically or completely defined herein
shall be construed in conformity with, and all financial data (including
financial ratios and other financial calculations) required to be submitted
pursuant to this Agreement shall be prepared in conformity with, GAAP applied on
a consistent basis, as in effect from time to time, applied in a manner
consistent with that used in preparing the Audited Financial Statements, except
as otherwise specifically prescribed herein.
(b) If at any time any change in GAAP would affect the computation of any
financial ratio or requirement set forth in any Loan Document, and either the
Borrower or the Required Lenders shall so request, the Administrative Agent, the
Lenders and the Borrower shall negotiate in good faith to amend such ratio or
requirement to preserve the original intent thereof in light of such change in
GAAP (subject to the approval of the Required Lenders); provided that, until so
amended, (i) such ratio or requirement shall continue to be computed in
accordance with GAAP prior to such change therein and (ii) the Borrower shall
provide to the Administrative Agent and the Lenders financial statements and
other documents required under this Agreement or as reasonably requested
hereunder setting forth a reconciliation between calculations of such ratio or
requirement made before and after giving effect to such change in GAAP.
1.04 Rounding.
Any financial ratios required to be maintained by the Borrower pursuant to
this Agreement shall be calculated by dividing the appropriate component by the
other component, carrying the result to one place more than the number of places
by which such ratio is expressed herein and rounding the result up or down to
the nearest number (with a rounding-up if there is no nearest number).
1.05 References to Agreements and Laws.
Unless otherwise expressly provided herein, (a) references to Organization
Documents, agreements (including the Loan Documents) and other contractual
instruments shall be deemed to include all subsequent amendments, restatements,
extensions, supplements and other modifications thereto, but only to the extent
that such amendments, restatements, extensions, supplements and other
modifications are not prohibited by any Loan Document; and (b) references to any
Law shall include all statutory and regulatory provisions consolidating,
amending, replacing, supplementing or interpreting such Law.
1.06 Times of Day.
18
Unless otherwise specified, all references herein to times of day shall be
references to Central time (daylight or standard, as applicable).
1.07 Letter of Credit Amounts.
Unless otherwise specified, all references herein to the amount of a Letter
of Credit at any time shall be deemed to mean the maximum face amount of such
Letter of Credit after giving effect to all increases thereof contemplated by
such Letter of Credit or the Letter of Credit Application therefor, whether or
not such maximum face amount is in effect at such time.
ARTICLE II.
THE COMMITMENTS AND CREDIT EXTENSIONS
2.01 Committed Loans.
Subject to the terms and conditions set forth herein, each Lender severally
agrees to make loans (each such loan, a "Committed Loan") to the Borrower from
time to time, on any Business Day during the Availability Period, in an
aggregate amount not to exceed at any time outstanding the amount of such
Lender's Commitment; provided, however, that after giving effect to any
Committed Borrowing, (i) the Total Outstandings shall not exceed the Aggregate
Commitments, and (ii) the aggregate Outstanding Amount of the Committed Loans of
any Lender, plus such Lender's Pro Rata Share of the Outstanding Amount of all
L/C Obligations shall not exceed such Lender's Commitment. Within the limits of
each Lender's Commitment, and subject to the other terms and conditions hereof,
the Borrower may borrow under this Section 2.01, prepay under Section 2.05, and
reborrow under this Section 2.01. Committed Loans may be Base Rate Loans or
Eurodollar Rate Loans, as further provided herein.
2.02 Borrowings, Conversions and Continuations of Committed Loans.
(a) Each Committed Borrowing, each conversion of Committed Loans from one
Type to the other, and each continuation of Eurodollar Rate Loans shall be made
upon the Borrower's irrevocable notice to the Administrative Agent, which may be
given by telephone. Each such notice must be received by the Administrative
Agent not later than 11:00 a.m. (i) three Business Days prior to the requested
date of any Borrowing of, conversion to or continuation of Eurodollar Rate Loans
or of any conversion of Eurodollar Rate Loans to Base Rate Committed Loans, and
(ii) on the requested date of any Borrowing of Base Rate Committed Loans. Each
telephonic notice by the Borrower pursuant to this Section 2.02(a) must be
confirmed promptly by delivery to the Administrative Agent of a written
Committed Loan Notice, appropriately completed and signed by a Responsible
Officer of the Borrower. Each Borrowing of, conversion to or continuation of
Eurodollar Rate Loans shall be in a principal amount of $3,000,000 or a whole
multiple of $1,000,000 in excess thereof. Except as provided in Sections
2.03(c), each Borrowing of Base Rate Committed Loans shall be in a principal
amount of $100,000 or a whole multiple of $100,000 in excess thereof. Except as
provided in Sections 2.03(c), each conversion to Base Rate Committed Loans shall
be in a principal amount of $500,000 or a whole multiple of $100,000 in excess
thereof. Each Committed Loan Notice (whether telephonic or written) shall
specify (i) whether the Borrower is requesting a Committed Borrowing, a
conversion of Committed Loans from one Type to the other, or a continuation of
19
Eurodollar Rate Loans, (ii) the requested date of the Borrowing, conversion or
continuation, as the case may be (which shall be a Business Day), (iii) the
principal amount of Committed Loans to be borrowed, converted or continued, (iv)
the Type of Committed Loans to be borrowed or to which existing Committed Loans
are to be converted, and (v) if applicable, the duration of the Interest Period
with respect thereto. If the Borrower fails to specify a Type of Committed Loan
in a Committed Loan Notice or if the Borrower fails to give a timely notice
requesting a conversion or continuation, then the applicable Committed Loans
shall be made as, or converted to, Base Rate Loans. Any such automatic
conversion to Base Rate Loans shall be effective as of the last day of the
Interest Period then in effect with respect to the applicable Eurodollar Rate
Loans. If the Borrower requests a Borrowing of, conversion to, or continuation
of Eurodollar Rate Loans in any such Committed Loan Notice, but fails to specify
an Interest Period, it will be deemed to have specified an Interest Period of
one month.
(b) Following receipt of a Committed Loan Notice, the Administrative Agent
shall promptly notify each Lender of the amount of its Pro Rata Share of the
applicable Committed Loans, and if no timely notice of a conversion or
continuation is provided by the Borrower, the Administrative Agent shall notify
each Lender of the details of any automatic conversion to Base Rate Loans
described in the preceding subsection. In the case of a Committed Borrowing,
each Lender shall make the amount of its Committed Loan available to the
Administrative Agent in immediately available funds at the Administrative
Agent's Office not later than 12:00 p.m. on the Business Day specified in the
applicable Committed Loan Notice. Upon satisfaction of the applicable conditions
set forth in Section 4.02 (and, if such Borrowing is the initial Credit
Extension, Section 4.01), the Administrative Agent shall make all funds so
received available to the Borrower in like funds as received by the
Administrative Agent either by (i) crediting the account of the Borrower on the
books of Bank of America with the amount of such funds or (ii) wire transfer of
such funds, in each case in accordance with instructions provided to (and
reasonably acceptable to) the Administrative Agent by the Borrower; provided,
however, that if, on the date the Committed Loan Notice with respect to such
Borrowing is given by the Borrower, there are L/C Borrowings outstanding, then
the proceeds of such Borrowing shall be applied, first, to the payment in full
of any such L/C Borrowings, and second, to the Borrower as provided above.
(c) Except as otherwise provided herein, a Eurodollar Rate Loan may be
continued or converted only on the last day of an Interest Period for such
Eurodollar Rate Loan. During the existence of a Default, no Loans may be
requested as, converted to or continued as Eurodollar Rate Loans without the
consent of the Required Lenders.
(d) The Administrative Agent shall promptly notify the Borrower and the
Lenders of the interest rate applicable to any Interest Period for Eurodollar
Rate Loans upon determination of such interest rate. The determination of the
Eurodollar Rate by the Administrative Agent shall be conclusive in the absence
of manifest error. At any time that Base Rate Loans are outstanding, the
Administrative Agent shall notify the Borrower and the Lenders of any change in
Bank of America's prime rate used in determining the Base Rate promptly
following the public announcement of such change.
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(e) After giving effect to all Committed Borrowings, all conversions of
Committed Loans from one Type to the other, and all continuations of Committed
Loans as the same Type, there shall not be more than ten (10) Interest Periods
in effect with respect to Committed Loans.
2.03 Letters of Credit.
(a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein, (A) the L/C
Issuer agrees, in reliance upon the agreements of the other Lenders set
forth in this Section 2.03, (1) from time to time on any Business Day
during the period from the Closing Date until the Letter of Credit
Expiration Date, to issue Letters of Credit for the account of the Borrower
(which shall include Letters of Credit issued for the account of CEC
Entertainment or certain Subsidiaries), and to amend or renew Letters of
Credit previously issued by it, in accordance with subsection (b) below,
and (2) to honor drafts under the Letters of Credit; and (B) the Lenders
severally agree to participate in Letters of Credit issued for the account
of the Borrower; provided that the L/C Issuer shall not be obligated to
make any L/C Credit Extension with respect to any Letter of Credit, and no
Lender shall be obligated to participate in any Letter of Credit if as of
the date of such L/C Credit Extension, (x) the Total Outstandings would
exceed the Aggregate Commitments, (y) the aggregate Outstanding Amount of
the Committed Loans of any Lender, plus such Lender's Pro Rata Share of the
Outstanding Amount of all L/C Obligations would exceed such Lender's
Commitment, or (z) the Outstanding Amount of the L/C Obligations would
exceed the Letter of Credit Sublimit. Within the foregoing limits, and
subject to the terms and conditions hereof, the Borrower's ability to
obtain Letters of Credit shall be fully revolving, and accordingly the
Borrower may, during the foregoing period, obtain Letters of Credit to
replace Letters of Credit that have expired or that have been drawn upon
and reimbursed. All Existing Letters of Credit shall be deemed to have been
issued pursuant hereto, and from and after the Closing Date shall be
subject to and governed by the terms and conditions hereof.
(ii) The L/C Issuer shall be under no obligation to issue any Letter
of Credit if:
(A) any order, judgment or decree of any Governmental Authority
or arbitrator shall by its terms purport to enjoin or restrain the L/C
Issuer from issuing such Letter of Credit, or any Law applicable to
the L/C Issuer or any request or directive (whether or not having the
force of law) from any Governmental Authority with jurisdiction over
the L/C Issuer shall prohibit, or request that the L/C Issuer refrain
from, the issuance of letters of credit generally or such Letter of
Credit in particular or shall impose upon the L/C Issuer with respect
to such Letter of Credit any restriction, reserve or capital
requirement (for which the L/C Issuer is not otherwise compensated
hereunder) not in effect on the Closing Date, or shall impose upon the
L/C Issuer any unreimbursed loss, cost or expense which was not
applicable on the Closing Date and which the L/C Issuer in good xxxxx
xxxxx material to it;
21
(B) subject to Section 2.03(b)(iii), the expiry date of such
requested Letter of Credit would occur more than twelve months after
the date of issuance or last renewal, unless the Required Lenders have
approved such expiry date;
(C) the expiry date of such requested Letter of Credit would
occur after the Letter of Credit Expiration Date, unless all the
Lenders have approved such expiry date;
(D) the issuance of such Letter of Credit would violate one or
more policies of the L/C Issuer; or
(E) such Letter of Credit is in an initial amount less than
$10,000, in the case of a commercial Letter of Credit, or $10,000, in
the case of a standby Letter of Credit, or is to be denominated in a
currency other than Dollars.
(iii) The L/C Issuer shall be under no obligation to amend any Letter
of Credit if (A) the L/C Issuer would have no obligation at such time to
issue such Letter of Credit in its amended form under the terms hereof, or
(B) the beneficiary of such Letter of Credit does not accept the proposed
amendment to such Letter of Credit.
(b) Procedures for Issuance and Amendment of Letters of Credit;
Auto-Renewal Letters of Credit.
(i) Each Letter of Credit shall be issued or amended, as the case may
be, upon the request of the Borrower delivered to the L/C Issuer (with a
copy to the Administrative Agent) in the form of a Letter of Credit
Application, appropriately completed and signed by a Responsible Officer of
the Borrower. Such Letter of Credit Application must be received by the L/C
Issuer and the Administrative Agent not later than 11:00 a.m. at least two
Business Days (or such later date and time as the L/C Issuer may agree in a
particular instance in its sole discretion) prior to the proposed issuance
date or date of amendment, as the case may be. In the case of a request for
an initial issuance of a Letter of Credit, such Letter of Credit
Application shall specify in form and detail satisfactory to the L/C
Issuer: (A) the proposed issuance date of the requested Letter of Credit
(which shall be a Business Day); (B) the amount thereof; (C) the expiry
date thereof; (D) the name and address of the beneficiary thereof; (E) the
documents to be presented by such beneficiary in case of any drawing
thereunder; (F) the full text of any certificate to be presented by such
beneficiary in case of any drawing thereunder; and (G) such other matters
as the L/C Issuer may require. In the case of a request for an amendment of
any outstanding Letter of Credit, such Letter of Credit Application shall
specify in form and detail satisfactory to the L/C Issuer (A) the Letter of
Credit to be amended; (B) the proposed date of amendment thereof (which
shall be a Business Day); (C) the nature of the proposed amendment; and (D)
such other matters as the L/C Issuer may require.
(ii) Promptly after receipt of any Letter of Credit Application, the
L/C Issuer will confirm with the Administrative Agent (by telephone or in
writing) that the Administrative Agent has received a copy of such Letter
of Credit Application from the Borrower and, if not, the L/C Issuer will
22
provide the Administrative Agent with a copy thereof. Upon receipt by the
L/C Issuer of confirmation from the Administrative Agent that the requested
issuance or amendment is permitted in accordance with the terms hereof,
then, subject to the terms and conditions hereof, the L/C Issuer shall, on
the requested date, issue a Letter of Credit for the account of the
Borrower or enter into the applicable amendment, as the case may be, in
each case in accordance with the L/C Issuer's usual and customary business
practices. Immediately upon the issuance of each Letter of Credit, each
Lender shall be deemed to, and hereby irrevocably and unconditionally
agrees to, purchase from the L/C Issuer a risk participation in such Letter
of Credit in an amount equal to the product of such Lender's Pro Rata Share
times the amount of such Letter of Credit.
(iii) If the Borrower so requests in any applicable Letter of Credit
Application, the L/C Issuer may, in its sole and absolute discretion, agree
to issue a Letter of Credit that has automatic renewal provisions (each, an
"Auto-Renewal Letter of Credit"); provided that any such Auto-Renewal
Letter of Credit must permit the L/C Issuer to prevent any such renewal at
least once in each twelve-month period (commencing with the date of
issuance of such Letter of Credit) by giving prior notice to the
beneficiary thereof not later than a Business Day (the "Nonrenewal Notice
Date") in each such twelve-month period to be agreed upon at the time such
Letter of Credit is issued. Unless otherwise directed by the L/C Issuer,
the Borrower shall not be required to make a specific request to the L/C
Issuer for any such renewal. Once an Auto-Renewal Letter of Credit has been
issued, the Lenders shall be deemed to have authorized (but may not
require) the L/C Issuer to permit the renewal of such Letter of Credit at
any time to an expiry date not later than the Letter of Credit Expiration
Date; provided, however, that the L/C Issuer shall not permit any such
renewal if (A) the L/C Issuer has determined that it would have no
obligation at such time to issue such Letter of Credit in its renewed form
under the terms hereof (by reason of the provisions of Section 2.03(a)(ii)
or otherwise), or (B) it has received notice (which may be by telephone or
in writing) on or before the day that is two Business Days before the
Nonrenewal Notice Date (1) from the Administrative Agent that the Required
Lenders have elected not to permit such renewal or (2) from the
Administrative Agent, any Lender or the Borrower that one or more of the
applicable conditions specified in Section 4.02 is not then satisfied.
(iv) Promptly after its delivery of any Letter of Credit or any
amendment to a Letter of Credit to an advising bank with respect thereto or
to the beneficiary thereof, the L/C Issuer will also deliver to the
Borrower and the Administrative Agent a true and complete copy of such
Letter of Credit or amendment.
(c) Drawings and Reimbursements; Funding of Participations.
(i) Upon receipt from the beneficiary of any Letter of Credit of any
notice of a drawing in compliance with the requirements under such Letter
of Credit, the L/C Issuer shall notify the Borrower and the Administrative
Agent thereof. Not later than 1:00 p.m. on the date of any payment by the
L/C Issuer under a Letter of Credit (each such date, an "Honor Date"), the
Borrower shall reimburse the L/C Issuer through the Administrative Agent in
an amount equal to the amount of such drawing, provided that the
Administrative Agent has provided notice to the Borrower prior to 11:00
a.m. on such day that such payment is due. In the event such notice is
23
received after 11:00 a.m. on a Business Day, such payment shall be due not
later than 11:00 a.m. on the next succeeding Business Day. If the Borrower
fails to so reimburse the L/C Issuer by such time, the Administrative Agent
shall promptly notify each Lender of the Honor Date, the amount of the
unreimbursed drawing (the "Unreimbursed Amount"), and the amount of such
Lender's Pro Rata Share thereof. In such event, the Borrower shall be
deemed to have requested a Committed Borrowing of Base Rate Loans to be
disbursed on the Honor Date in an amount equal to the Unreimbursed Amount,
without regard to the minimum and multiples specified in Section 2.02 for
the principal amount of Base Rate Loans, but subject to the amount of the
unutilized portion of the Aggregate Commitments and the conditions set
forth in Section 4.02 (other than the delivery of a Committed Loan Notice)
and the delivery of prior notice of such request for a Committed Borrowing
to the Borrower. Any notice given by the L/C Issuer or the Administrative
Agent pursuant to this Section 2.03(c)(i) may be given by telephone if
immediately confirmed in writing; provided that the lack of such an
immediate confirmation shall not affect the conclusiveness or binding
effect of such notice.
(ii) Each Lender (including the Lender acting as L/C Issuer) shall
upon any notice pursuant to Section 2.03(c)(i) make funds available to the
Administrative Agent for the account of the L/C Issuer at the
Administrative Agent's Office in an amount equal to its Pro Rata Share of
the Unreimbursed Amount not later than 12:00 p.m. on the Business Day
specified in such notice by the Administrative Agent, whereupon, subject to
the provisions of Section 2.03(c)(iii), each Lender that so makes funds
available shall be deemed to have made a Base Rate Committed Loan to the
Borrower in such amount. The Administrative Agent shall remit the funds so
received to the L/C Issuer.
(iii) With respect to any Unreimbursed Amount that is not fully
refinanced by a Committed Borrowing of Base Rate Loans because the
conditions set forth in Section 4.02 cannot be satisfied or for any other
reason, the Borrower shall be deemed to have incurred from the L/C Issuer
an L/C Borrowing in the amount of the Unreimbursed Amount that is not so
refinanced, which L/C Borrowing shall be due and payable on demand
(together with interest) and shall bear interest at the Default Rate. In
such event, each Lender's payment to the Administrative Agent for the
account of the L/C Issuer pursuant to Section 2.03(c)(ii) shall be deemed
payment in respect of its participation in such L/C Borrowing and shall
constitute an L/C Advance from such Lender in satisfaction of its
participation obligation under this Section 2.03.
(iv) Until each Lender funds its Committed Loan or L/C Advance
pursuant to this Section 2.03(c) to reimburse the L/C Issuer for any amount
drawn under any Letter of Credit, interest in respect of such Lender's Pro
Rata Share of such amount shall be solely for the account of the L/C
Issuer.
(v) Notwithstanding anything contained herein to the contrary, each
Lender's obligation to make Committed Loans or L/C Advances to reimburse
the L/C Issuer for amounts drawn under Letters of Credit, as contemplated
by this Section 2.03(c), shall be absolute and unconditional and shall not
be affected by any circumstance, including (A) any set-off, counterclaim,
recoupment, defense or other right which such Lender may have against the
24
L/C Issuer, the Borrower or any other Person for any reason whatsoever; (B)
the occurrence or continuance of a Default, or (C) any other occurrence,
event or condition, whether or not similar to any of the foregoing;
provided, however, that each Lender's obligation to make Committed Loans
pursuant to this Section 2.03(c) is subject to the conditions set forth in
Section 4.02 (other than delivery by the Borrower of a Committed Loan
Notice). No such making of an L/C Advance shall relieve or otherwise impair
the obligation of the Borrower to reimburse the L/C Issuer for the amount
of any payment made by the L/C Issuer under any Letter of Credit, together
with interest as provided herein.
(vi) If any Lender fails to make available to the Administrative Agent
for the account of the L/C Issuer any amount required to be paid by such
Lender pursuant to the foregoing provisions of this Section 2.03(c) by the
time specified in Section 2.03(c)(ii), the L/C Issuer shall be entitled to
recover from such Lender (acting through the Administrative Agent), on
demand, such amount with interest thereon for the period from the date such
payment is required to the date on which such payment is immediately
available to the L/C Issuer at a rate per annum equal to the Federal Funds
Rate from time to time in effect. A certificate of the L/C Issuer submitted
to any Lender (through the Administrative Agent) with respect to any
amounts owing under this clause (vi) shall be conclusive absent manifest
error.
(d) Repayment of Participations.
(i) At any time after the L/C Issuer has made a payment under any
Letter of Credit and has received from any Lender such Lender's L/C Advance
in respect of such payment in accordance with Section 2.03(c), if the
Administrative Agent receives for the account of the L/C Issuer any payment
in respect of the related Unreimbursed Amount or interest thereon (whether
directly from the Borrower or otherwise, including proceeds of Cash
Collateral applied thereto by the Administrative Agent), the Administrative
Agent will distribute to such Lender its Pro Rata Share thereof
(appropriately adjusted, in the case of interest payments, to reflect the
period of time during which such Lender's L/C Advance was outstanding) in
the same funds as those received by the Administrative Agent.
(ii) If any payment received by the Administrative Agent for the
account of the L/C Issuer pursuant to Section 2.03(c)(i) is required to be
returned under any of the circumstances described in Section 10.06
(including pursuant to any settlement entered into by the L/C Issuer in its
discretion), each Lender shall pay to the Administrative Agent for the
account of the L/C Issuer its Pro Rata Share thereof on demand of the
Administrative Agent, plus interest thereon from the date of such demand to
the date such amount is returned by such Lender, at a rate per annum equal
to the Federal Funds Rate from time to time in effect.
(e) Obligations Absolute. The obligation of the Borrower to reimburse the
L/C Issuer for each drawing under each Letter of Credit and to repay each L/C
Borrowing shall be absolute, unconditional and irrevocable, and shall be paid
strictly in accordance with the terms of this Agreement under all circumstances,
including the following:
25
(i) any lack of validity or enforceability of such Letter of Credit,
this Agreement, or any other agreement or instrument relating thereto;
(ii) the existence of any claim, counterclaim, set-off, defense or
other right that the Borrower may have at any time against any beneficiary
or any transferee of such Letter of Credit (or any Person for whom any such
beneficiary or any such transferee may be acting), the L/C Issuer or any
other Person, whether in connection with this Agreement, the transactions
contemplated hereby or by such Letter of Credit or any agreement or
instrument relating thereto, or any unrelated transaction;
(iii) any draft, demand, certificate or other document presented under
such Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect; or any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under such
Letter of Credit;
(iv) any payment by the L/C Issuer under such Letter of Credit against
presentation of a draft or certificate that does not strictly comply with
the terms of such Letter of Credit; or any payment made by the L/C Issuer
under such Letter of Credit to any Person purporting to be a trustee in
bankruptcy, debtor-in-possession, assignee for the benefit of creditors,
liquidator, receiver or other representative of or successor to any
beneficiary or any transferee of such Letter of Credit, including any
arising in connection with any proceeding under any Debtor Relief Law; or
(v) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing, including any other circumstance that
might otherwise constitute a defense available to, or a discharge of, the
Borrower.
The Borrower shall promptly examine a copy of each Letter of Credit and
each amendment thereto that is delivered to it and, in the event of any claim of
noncompliance with the Borrower's instructions or other irregularity, the
Borrower will immediately notify the L/C Issuer. The Borrower shall be
conclusively deemed to have waived any such claim against the L/C Issuer and its
correspondents unless such notice is given as aforesaid.
(f) Role of L/C Issuer. Each Lender and the Borrower agree that, in paying
any drawing under a Letter of Credit, the L/C Issuer shall not have any
responsibility to obtain any document (other than any sight draft, certificates
and documents expressly required by the Letter of Credit) or to ascertain or
inquire as to the validity or accuracy of any such document or the authority of
the Person executing or delivering any such document. None of the L/C Issuer,
any Agent-Related Person nor any of the respective correspondents, participants
or assignees of the L/C Issuer shall be liable to any Lender for (i) any action
taken or omitted in connection herewith at the request or with the approval of
the Lenders or the Required Lenders, as applicable; (ii) any action taken or
omitted in the absence of gross negligence or willful misconduct; or (iii) the
due execution, effectiveness, validity or enforceability of any document or
instrument related to any Letter of Credit or Letter of Credit Application. The
Borrower hereby assumes all risks of the acts or omissions of any beneficiary or
transferee with respect to its use of any Letter of Credit; provided, however,
26
that this assumption is not intended to, and shall not, preclude the Borrower's
pursuing such rights and remedies as it may have against the beneficiary or
transferee at law or under any other agreement. None of the L/C Issuer, any
Agent-Related Person, nor any of the respective correspondents, participants or
assignees of the L/C Issuer, shall be liable or responsible for any of the
matters described in clauses (i) through (v) of Section 2.03(e); provided,
however, that anything in such clauses to the contrary notwithstanding, the
Borrower may have a claim against the L/C Issuer, and the L/C Issuer may be
liable to the Borrower, to the extent, but only to the extent, of any direct, as
opposed to consequential or exemplary, damages suffered by the Borrower which
the Borrower proves were caused by the L/C Issuer's willful misconduct or gross
negligence or the L/C Issuer's willful failure to pay under any Letter of Credit
after the presentation to it by the beneficiary of a sight draft and
certificate(s) strictly complying with the terms and conditions of a Letter of
Credit. In furtherance and not in limitation of the foregoing, the L/C Issuer
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, and the L/C Issuer shall not be responsible for the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign a Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason.
(g) Cash Collateral. Upon the request of the Administrative Agent, (i) if
the L/C Issuer has honored any full or partial drawing request under any Letter
of Credit and such drawing has resulted in an L/C Borrowing, or (ii) if, as of
the Letter of Credit Expiration Date, any Letter of Credit may for any reason
remain outstanding and partially or wholly undrawn, the Borrower shall
immediately Cash Collateralize the then Outstanding Amount of all L/C
Obligations (in an amount equal to such Outstanding Amount determined as of the
date of such L/C Borrowing or the Letter of Credit Expiration Date, as the case
may be). For purposes hereof, "Cash Collateralize" means to pledge and deposit
with or deliver to the Administrative Agent, for the benefit of the L/C Issuer
and the Lenders, as collateral for the L/C Obligations, cash or deposit account
balances pursuant to documentation in form and substance satisfactory to the
Administrative Agent and the L/C Issuer (which documents are hereby consented to
by the Lenders). Derivatives of such term have corresponding meanings. The
Borrower hereby grants to the Administrative Agent, for the benefit of the L/C
Issuer and the Lenders, a security interest in all such cash, deposit accounts
and all balances therein and all proceeds of the foregoing. Cash collateral
shall be maintained in blocked, non-interest bearing deposit accounts at Bank of
America.
(h) Applicability of ISP98 and UCP. Unless otherwise expressly agreed by
the L/C Issuer and the Borrower when a Letter of Credit is issued [including any
such agreement applicable to an Existing Letter of Credit], (i) the rules of the
"International Standby Practices 1998" published by the Institute of
International Banking Law & Practice (or such later version thereof as may be in
effect at the time of issuance) shall apply to each standby Letter of Credit,
and (ii) the rules of the Uniform Customs and Practice for Documentary Credits,
as most recently published by the International Chamber of Commerce (the "ICC")
at the time of issuance (including the ICC decision published by the Commission
on Banking Technique and Practice on April 6, 1998 regarding the European single
currency (euro)) shall apply to each commercial Letter of Credit.
27
(i) Letter of Credit Fees. The Borrower shall pay to the Administrative
Agent for the account of each Lender in accordance with its Pro Rata Share (i) a
Letter of Credit fee for each commercial Letter of Credit equal to the
Applicable Rate under the column "Commercial Letters of Credit" for the then
applicable pricing level, on a per annum basis, times the daily maximum amount
available to be drawn under such Letter of Credit (whether or not such maximum
amount is then in effect under such Letter of Credit), provided, however, that
the Letter of Credit fee shall be no less than $200 for each commercial Letter
of Credit, and (ii) a Letter of Credit fee for each standby Letter of Credit
equal to the Applicable Rate under the column "Applicable Rate for Eurodollar
Rate Loans and Standby Letters of Credit" for the then applicable pricing level,
on a per annum basis, times the daily maximum amount available to be drawn under
such Letter of Credit (whether or not such maximum amount is then in effect
under such Letter of Credit), provided, however, that the Letter of Credit fee
shall be no less than $350 for each standby Letter of Credit. Such letter of
credit fees shall be computed on a quarterly basis in arrears. Such letter of
credit fees shall be due and payable on the last Business Day of each March,
June, September and December, commencing with the first such date to occur after
the issuance of such Letter of Credit, on the Letter of Credit Expiration Date
and thereafter on demand. If there is any change in the Applicable Rate during
any quarter, the daily maximum amount of each Letter of Credit shall be computed
and multiplied by the Applicable Rate separately for each period during such
quarter that such Applicable Rate was in effect.
(j) Fronting Fee and Documentary and Processing Charges Payable to L/C
Issuer. The Borrower shall pay directly to the L/C Issuer for its own account a
fronting fee with respect to each Letter of Credit in the amounts specified in
the Fee Letter. Such fronting fee shall be computed on a quarterly basis in
arrears. Such fronting fee shall be due and payable on the last Business Day of
each March, June, September and December, commencing with the first such date to
occur after the issuance of such Letter of Credit, on the Letter of Credit
Expiration Date and thereafter on demand. In addition, the Borrower shall pay
directly to the L/C Issuer for its own account the individual customary
issuance, presentation, amendment and other processing fees, and other
reasonable standard costs and charges, of the L/C Issuer relating to letters of
credit as from time to time in effect. Such customary fees and standard costs
and charges are due and payable on demand and are nonrefundable.
(k) Conflict with Letter of Credit Application. In the event of any
conflict between the terms hereof and the terms of any Letter of Credit
Application, the terms hereof shall control.
2.04 Intentionally Omitted.
2.05 Prepayments.
(a) The Borrower may, upon notice to the Administrative Agent, at any time
or from time to time voluntarily prepay Committed Loans in whole or in part
without premium or penalty; provided that (i) such notice must be received by
the Administrative Agent not later than 11:00 a.m. (A) three Business Days prior
to any date of prepayment of Eurodollar Rate Loans and (B) on the date of
prepayment of Base Rate Committed Loans; (ii) any prepayment of Eurodollar Rate
Loans shall be in a principal amount of $3,000,000 or a whole multiple of
$1,000,000 in excess thereof; and (iii) any prepayment of Base Rate Committed
Loans shall be in a principal amount of $100,000 or a whole multiple of $100,000
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in excess thereof or, in each case, if less, the entire principal amount thereof
then outstanding. Each such notice shall specify the date and amount of such
prepayment and the Type(s) of Committed Loans to be prepaid. The Administrative
Agent will promptly notify each Lender of its receipt of each such notice, and
of the amount of such Lender's Pro Rata Share of such prepayment. If such notice
is given by the Borrower, the Borrower shall make such prepayment and the
payment amount specified in such notice shall be due and payable on the date
specified therein. Any prepayment of a Eurodollar Rate Loan shall be accompanied
by all accrued interest thereon, together with any additional amounts required
pursuant to Section 3.05. Each such prepayment shall be applied to the Committed
Loans of the Lenders in accordance with their respective Pro Rata Shares.
(b) If for any reason the Total Outstandings at any time exceed the
Aggregate Commitments then in effect, the Borrower shall immediately prepay
Loans and/or Cash Collateralize the L/C Obligations in an aggregate amount equal
to such excess; provided, however, that the Borrower shall not be required to
Cash Collateralize the L/C Obligations pursuant to this Section 2.05(b) unless
after the prepayment in full of the Committed Loans the Total Outstandings
exceed the Aggregate Commitments then in effect.
2.06 Termination or Reduction of Commitments.
The Borrower may, upon notice to the Administrative Agent, terminate the
Aggregate Commitments, or from time to time permanently reduce the Aggregate
Commitments; provided that (i) any such notice shall be received by the
Administrative Agent not later than 11:00 a.m. five Business Days prior to the
date of termination or reduction, (ii) any such partial reduction shall be in an
aggregate amount of $10,000,000 or any whole multiple of $1,000,000 in excess
thereof, (iii) the Borrower shall not terminate or reduce the Aggregate
Commitments if, after giving effect thereto and to any concurrent prepayments
hereunder, the Total Outstandings would exceed the Aggregate Commitments, and
(iv) if, after giving effect to any reduction of the Aggregate Commitments, the
Letter of Credit Sublimit exceeds the amount of the Aggregate Commitments, such
Sublimit shall be automatically reduced by the amount of such excess. The
Administrative Agent will promptly notify the Lenders of any such notice of
termination or reduction of the Aggregate Commitments. Any reduction of the
Aggregate Commitments shall be applied to the Commitment of each Lender
according to its Pro Rata Share. All commitment fees accrued until the effective
date of any termination of the Aggregate Commitments shall be paid on the
effective date of such termination.
2.07 Repayment of Loans.
The Borrower shall repay to the Lenders on the Maturity Date the aggregate
principal amount of Committed Loans outstanding on such date.
2.08 Interest.
(a) Subject to the provisions of subsection (b) below, (i) each Eurodollar
Rate Loan shall bear interest on the outstanding principal amount thereof for
each Interest Period at a rate per annum equal to the Eurodollar Rate for such
Interest Period plus the Applicable Rate; and (ii) each Base Rate Committed Loan
shall bear interest on the outstanding principal amount thereof from the
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applicable borrowing date at a rate per annum equal to the Base Rate plus the
Applicable Rate.
(b) If any amount payable by the Borrower under any Loan Document is not
paid when due (without regard to any applicable grace periods), whether at
stated maturity, by acceleration or otherwise, such amount shall thereafter bear
interest at a fluctuating interest rate per annum at all times equal to the
Default Rate to the fullest extent permitted by applicable Laws. Furthermore,
while any Event of Default exists and is continuing, the Administrative Agent
may determine, in its sole judgment, that it is appropriate that the Borrower
shall pay interest on the principal amount of all outstanding Obligations
hereunder at a fluctuating interest rate per annum at all times equal to the
Default Rate to the fullest extent permitted by applicable Laws. Accrued and
unpaid interest on past due amounts (including interest on past due interest)
shall be due and payable upon demand.
(c) Interest on each Loan shall be due and payable in arrears on each
Interest Payment Date applicable thereto and at such other times as may be
specified herein. Interest hereunder shall be due and payable in accordance with
the terms hereof before and after judgment, and before and after the
commencement of any proceeding under any Debtor Relief Law.
2.09 Fees.
In addition to certain fees described in subsections (i) and (j) of Section
2.03:
(a) Commitment Fee. The Borrower shall pay to the Administrative Agent for
the account of each Lender in accordance with its Pro Rata Share, a commitment
fee equal to the Applicable Rate times the actual daily amount by which the
Aggregate Commitments exceed the sum of (i) the Outstanding Amount of Committed
Loans and (ii) the Outstanding Amount of L/C Obligations. The commitment fee
shall accrue at all times during the Availability Period, including at any time
during which one or more of the conditions in Article IV is not met, and shall
be due and payable quarterly in arrears on the last Business Day of each March,
June, September and December, commencing with the first such date to occur after
the Closing Date, and on the Maturity Date. The commitment fee shall be
calculated quarterly in arrears, and if there is any change in the Applicable
Rate during any quarter, the actual daily amount shall be computed and
multiplied by the Applicable Rate separately for each period during such quarter
that such Applicable Rate was in effect.
(b) Other Fees. (i) The Borrower shall pay to the Arranger and the
Administrative Agent for their own respective accounts fees in the amounts and
at the times specified in the Fee Letter. Such fees shall be fully earned when
paid and shall not be refundable for any reason whatsoever.
(ii) The Borrower shall pay to the Lenders such fees as shall have been
separately agreed upon in writing in the amounts and at the times so specified.
Such fees shall be fully earned when paid and shall not be refundable for any
reason whatsoever.
2.10 Computation of Interest and Fees.
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All computations of (i) interest for Base Rate Loans when the Base Rate is
determined by Bank of America's "prime rate" and (ii) fees, shall be made on the
basis of a year of 365 or 366 days, as the case may be, and actual days elapsed.
All other computations of interest shall be made on the basis of a 360-day year
and actual days elapsed (which results in more interest being paid than if
computed on the basis of a 365-day year). Interest shall accrue on each Loan for
the day on which the Loan is made, and shall not accrue on a Loan, or any
portion thereof, for the day on which the Loan or such portion is paid, provided
that any Loan that is repaid on the same day on which it is made shall, subject
to Section 2.12(a), bear interest for one day.
2.11 Evidence of Debt.
(a) The Credit Extensions made by each Lender shall be evidenced by one or
more accounts or records maintained by such Lender and by the Administrative
Agent in the ordinary course of business. The accounts or records maintained by
the Administrative Agent and each Lender shall be conclusive absent manifest
error of the amount of the Credit Extensions made by the Lenders to the Borrower
and the interest and payments thereon. Any failure to so record or any error in
doing so shall not, however, limit or otherwise affect the obligation of the
Borrower hereunder to pay any amount owing with respect to the Obligations. In
the event of any conflict between the accounts and records maintained by any
Lender and the accounts and records of the Administrative Agent in respect of
such matters, the accounts and records of the Administrative Agent shall control
in the absence of manifest error. Upon the request of any Lender made through
the Administrative Agent, the Borrower shall execute and deliver to such Lender
(through the Administrative Agent) a Note, which shall evidence such Lender's
Loans in addition to such accounts or records. Each Lender may attach schedules
to its Note and endorse thereon the date, Type (if applicable), amount and
maturity of its Loans and payments with respect thereto.
(b) In addition to the accounts and records referred to in subsection (a),
each Lender and the Administrative Agent shall maintain in accordance with its
usual practice accounts or records evidencing the purchases and sales by such
Lender of participations in Letters of Credit. In the event of any conflict
between the accounts and records maintained by the Administrative Agent and the
accounts and records of any Lender in respect of such matters, the accounts and
records of the Administrative Agent shall control in the absence of manifest
error.
2.12 Payments Generally.
(a) All payments to be made by the Borrower shall be made without condition
or deduction for any counterclaim, defense, recoupment or setoff. Except as
otherwise expressly provided herein, all payments by the Borrower hereunder
shall be made to the Administrative Agent, for the account of the respective
Lenders to which such payment is owed, at the Administrative Agent's Office in
Dollars and in immediately available funds not later than 1:00 p.m. on the date
specified herein. The Administrative Agent will promptly distribute to each
Lender its Pro Rata Share (or other applicable share as provided herein) of such
payment in like funds as received by wire transfer to such Lender's Lending
Office. All payments received by the Administrative Agent after 1:00 p.m. shall
be deemed received on the next succeeding Business Day and any applicable
interest or fee shall continue to accrue.
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(b) If any payment to be made by the Borrower shall come due on a day other
than a Business Day, payment shall be made on the next following Business Day,
and such extension of time shall be reflected in computing interest or fees, as
the case may be.
(c) Unless the Borrower or any Lender has notified the Administrative
Agent, prior to the date any payment is required to be made by it to the
Administrative Agent hereunder, that the Borrower or such Lender, as the case
may be, will not make such payment, the Administrative Agent may assume that the
Borrower or such Lender, as the case may be, has timely made such payment and
may (but shall not be so required to), in reliance thereon, make available a
corresponding amount to the Person entitled thereto. If and to the extent that
such payment was not in fact made to the Administrative Agent in immediately
available funds, then:
(i) if the Borrower failed to make such payment, each Lender shall
forthwith on demand repay to the Administrative Agent the portion of such
assumed payment that was made available to such Lender in immediately
available funds, together with interest thereon in respect of each day from
and including the date such amount was made available by the Administrative
Agent to such Lender to the date such amount is repaid to the
Administrative Agent in immediately available funds at the Federal Funds
Rate from time to time in effect; and
(ii) if any Lender failed to make such payment, such Lender shall
forthwith on demand pay to the Administrative Agent the amount thereof in
immediately available funds, together with interest thereon for the period
from the date such amount was made available by the Administrative Agent to
the Borrower to the date such amount is recovered by the Administrative
Agent (the "Compensation Period") at a rate per annum equal to the Federal
Funds Rate from time to time in effect. If such Lender pays such amount to
the Administrative Agent, then such amount shall constitute such Lender's
Committed Loan included in the applicable Borrowing. If such Lender does
not pay such amount forthwith upon the Administrative Agent's demand
therefor, the Administrative Agent may make a demand therefor upon the
Borrower, and the Borrower shall pay such amount to the Administrative
Agent, together with interest thereon for the Compensation Period at a rate
per annum equal to the rate of interest applicable to the applicable
Borrowing. Nothing herein shall be deemed to relieve any Lender from its
obligation to fulfill its Commitment or to prejudice any rights which the
Administrative Agent or the Borrower may have against any Lender as a
result of any default by such Lender hereunder.
A notice of the Administrative Agent to any Lender or the Borrower with
respect to any amount owing under this subsection (c) shall be conclusive,
absent manifest error.
(d) If any Lender makes available to the Administrative Agent funds for any
Loan to be made by such Lender as provided in the foregoing provisions of this
Article II, and such funds are not made available to the Borrower by the
Administrative Agent because the conditions to the applicable Credit Extension
set forth in Article IV are not satisfied or waived in accordance with the terms
hereof, the Administrative Agent shall return such funds (in like funds as
received from such Lender) to such Lender, without interest.
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(e) The obligations of the Lenders hereunder to make Committed Loans and to
fund participations in Letters of Credit are several and not joint. The failure
of any Lender to make any Committed Loan or to fund any such participation on
any date required hereunder shall not relieve any other Lender of its
corresponding obligation to do so on such date, and no Lender shall be
responsible for the failure of any other Lender to so make its Committed Loan or
purchase its participation.
(f) Nothing herein shall be deemed to obligate any Lender to obtain the
funds for any Loan in any particular place or manner or to constitute a
representation by any Lender that it has obtained or will obtain the funds for
any Loan in any particular place or manner.
2.13 Sharing of Payments.
If, other than as expressly provided elsewhere herein, any Lender shall
obtain on account of the Committed Loans made by it, or the participations in
L/C Obligations held by it, any payment (whether voluntary, involuntary, through
the exercise of any right of set-off, or otherwise) in excess of its ratable
share (or other share contemplated hereunder) thereof, such Lender shall
immediately (a) notify the Administrative Agent of such fact, and (b) purchase
from the other Lenders such participations in the Committed Loans made by them
and/or such subparticipations in the participations in L/C Obligations held by
them, as the case may be, as shall be necessary to cause such purchasing Lender
to share the excess payment in respect of such Committed Loans or such
participations, as the case may be, pro rata with each of them; provided,
however, that if all or any portion of such excess payment is thereafter
recovered from the purchasing Lender under any of the circumstances described in
Section 10.06 (including pursuant to any settlement entered into by the
purchasing Lender in its discretion), such purchase shall to that extent be
rescinded and each other Lender shall repay to the purchasing Lender the
purchase price paid therefor, together with an amount equal to such paying
Lender's ratable share (according to the proportion of (i) the amount of such
paying Lender's required repayment to (ii) the total amount so recovered from
the purchasing Lender) of any interest or other amount paid or payable by the
purchasing Lender in respect of the total amount so recovered, without further
interest thereon. The Borrower agrees that any Lender so purchasing a
participation from another Lender may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off, but subject
to Section 10.09) with respect to such participation as fully as if such Lender
were the direct creditor of the Borrower in the amount of such participation.
The Administrative Agent will keep records (which shall be conclusive and
binding in the absence of manifest error) of participations purchased under this
Section and will in each case notify the Lenders following any such purchases or
repayments. Each Lender that purchases a participation pursuant to this Section
shall from and after such purchase have the right to give all notices, requests,
demands, directions and other communications under this Agreement with respect
to the portion of the Obligations purchased to the same extent as though the
purchasing Lender were the original owner of the Obligations purchased.
2.14 Extension of Maturity Date.
(a) Not earlier than 90 days prior to, nor later than 60 days prior to the
first and second anniversary dates (each an "Extension Option Date") of the
Closing Date, the Borrower may, upon notice to the Administrative Agent (which
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shall promptly notify the Lenders), request a one-year extension of the Maturity
Date then in effect. Within 30 days of delivery of such notice, each Lender
shall notify the Administrative Agent whether or not it consents to such
extension (which consent may be given or withheld in such Lender's sole and
absolute discretion). Any Lender not responding within the above time period
shall be deemed to have declined such extension. The Administrative Agent shall
promptly notify the Borrower and the Lenders of the Lenders' responses. If a
Lender declines, or is deemed to have declined, to consent to such extension,
(i) the Borrower may replace such Lender in compliance with the terms and
conditions of Section 10.16, or (ii) in the absence of such replacement, upon
the withdrawal of such Lender, the Aggregate Commitments shall be reduced
permanently by the amount of the withdrawing Lender's Commitment and in such
case each remaining Lender's Pro Rata Share of the Aggregate Commitments shall
be adjusted to reflect its new Pro Rata Share of the Aggregate Commitments.
(b) The Maturity Date shall be extended only if Lenders holding at least
51% of the then existing Aggregate Commitments (after giving effect to any
replacements of Lenders permitted herein) (the "Consenting Lenders") have
consented thereto. If so extended, the then existing Maturity Date ("Extension
Effective Date"), as to the Consenting Lenders, shall be extended to the same
date in the following year, effective as of such immediate anniversary date of
the Closing Date. The Administrative Agent and the Borrower shall promptly
confirm to the Lenders such extension and the new Maturity Date. As a condition
precedent to such extension, the Borrower shall deliver to the Administrative
Agent a certificate of each Loan Party dated as of the applicable Extension
Option Date (in sufficient copies for each Lender) signed by a Responsible
Officer of such Loan Party (i) certifying and attaching the resolutions adopted
by such Loan Party approving or consenting to such extension and (ii) in the
case of the Borrower, certifying that, before and after giving effect to such
extension, (A) the representations and warranties contained in Article V and the
other Loan Documents are true and correct on and as of the applicable Extension
Option Date, except to the extent that such representations and warranties
specifically refer to an earlier date, in which case they are true and correct
as of such earlier date, and except that for purposes of this Section 2.14, the
representations and warranties contained in subsections (a) and (b) of Section
5.05 shall be deemed to refer to the most recent statements furnished pursuant
to subsections (a) and (b), respectively, of Section 6.01, and (B) no Default
has occurred and is continuing. Such certificate shall also be delivered by
Borrower to the Administrative Agent on each Extension Effective Date as an
additional condition precedent to each such extension. The Borrower shall prepay
any Committed Loans outstanding on the Extension Effective Date (and pay any
additional amounts required pursuant to Section 3.05) to the extent necessary to
keep outstanding Committed Loans ratable with any revised and new Pro Rata
Shares of all the Lenders effective as of the Extension Effective Date.
(c) This Section shall supersede any provisions in Section 2.13 or 10.01 to
the contrary.
2.15 Increase in Commitments.
(a) Provided no Default has occurred and is continuing, upon notice to the
Administrative Agent (which shall promptly notify the Lenders), the Borrower may
make not more than two requests for an increase in the Aggregate Commitments by
an aggregate amount not exceeding $25,000,000, which notice shall set forth the
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amount of such increase. At the time of sending such notice, the Borrower (in
consultation with the Administrative Agent) shall specify the time period within
which each Lender is requested to respond (which shall in no event be less than
ten Business Days from the date of delivery of such notice to the Lenders). Each
Lender shall notify the Administrative Agent in writing within such time period
whether or not it agrees to increase its Commitment and, if so, whether by an
amount equal to, greater than, or less than its Pro Rata Share of such requested
increase ("Increasing Lender"). Any Lender not responding within such time
period shall be deemed to have declined to increase its Commitment. Any Lender
which declines to increase its Commitment shall not be entitled to any fees
attributable and payable in connection with such increase in the Aggregate
Commitments. To achieve the full amount of a requested increase, the Borrower
may invite additional lenders approved by the Administrative Agent in its
reasonable discretion to become Lenders (each a "New Lender"). Borrower and each
New Lender shall have executed and delivered to the Administrative Agent a New
Lender Agreement (the "New Lender Agreement") substantially in the form of
Exhibit H and the Administrative Agent shall have accepted, and if acceptable in
its reasonable discretion, shall have executed same. In the event the entire
amount of the requested increase is greater than the new Loans the New Lenders
and Increasing Lenders are willing to make Borrower may elect to accept the
increase in the Aggregate Commitments in such lesser amount. In no event shall
Administrative Agent have any obligation to ensure that the amount of the
requested increase is provided by New Lenders or Increasing Lenders. Any New
Lender which agrees to become a Lender under this Agreement for the purpose of
funding a portion of the increase in the Aggregate Commitments shall be entitled
to all rights and burdened by all obligations of the then existing Lenders
hereunder. The Administrative Agent shall notify the Borrower and each Lender of
the Lenders' responses to each request made hereunder.
(b) If the Aggregate Commitments are increased in accordance with this
Section, the Administrative Agent and the Borrower shall determine the effective
date (the "Increase Effective Date") and the final allocation of such increase.
The Administrative Agent shall promptly provide written notice to the Borrower
and the Lenders of the final allocation of such increase, each Lender's new Pro
Rata Share and the Increase Effective Date. As a condition precedent to such
increase, the Borrower shall deliver to the Administrative Agent a certificate
of each Loan Party dated as of the Increase Effective Date (in sufficient copies
for each Lender) signed by a Responsible Officer of such Loan Party (i)
certifying and attaching the resolutions adopted by such Loan Party approving or
consenting to such increase, and (ii) in the case of the Borrower, certifying
that, before and after giving effect to such increase, (A) the representations
and warranties contained in Article V and the other Loan Documents are true and
correct on and as of the Increase Effective Date, except to the extent that such
representations and warranties specifically refer to an earlier date, in which
case they are true and correct as of such earlier date, and except that for
purposes of this Section 2.15, the representations and warranties contained in
subsections (a) and (b) of Section 5.05 shall be deemed to refer to the most
recent statements furnished pursuant to subsections (a) and (b), respectively,
of Section 6.01, and (B) no Default has occurred and is continuing. The Borrower
shall prepay any Committed Loans outstanding on the Increase Effective Date (and
pay any additional amounts required pursuant to Section 3.05) to the extent
necessary to keep the outstanding Committed Loans ratable with any revised Pro
Rata Shares arising from any nonratable increase in the Commitments under this
Section. Each New Lender and/or Increasing Lender shall enable Borrower to make
such prepayment by making Loans to the Borrower, pursuant to the terms and
conditions in Article II, in amounts sufficient upon the application of such
Loans by all New Lenders and Increasing Lenders to the outstanding Loans to
35
cause the outstanding principal balance owed to each Lender to be in compliance
with its new Pro Rata Share. The Borrower hereby irrevocably authorizes each New
Lender and/or each Increasing Lender to fund to the Administrative Agent the
Loans required to be made pursuant to the immediately preceding sentence for
application to the reduction of the outstanding Loans held by the other Lenders.
Such new Loans shall be Base Rate Loans, subject to the Borrower's ability under
Article II to convert such Loans to Eurodollar Rate Loans after the Increase
Effective Date.
(c) Upon the Increase Effective Date and funding of the Loans described in
Section 2.15(b), each New Lender and/or Increasing Lender shall be deemed to
have irrevocably and unconditionally purchased and received, without recourse or
warranty, an undivided participation in all outstanding Letters of Credit in
accordance with its Pro Rata Share.
(d) This Section shall supersede any provisions in Sections 2.13 or 10.01
to the contrary.
ARTICLE III.
TAXES, YIELD PROTECTION AND ILLEGALITY
3.01 Taxes.
(a) Any and all payments by the Borrower to or for the account of the
Administrative Agent or any Lender under any Loan Document shall be made free
and clear of and without deduction for any and all present or future taxes,
duties, levies, imposts, deductions, assessments, fees, withholdings or similar
charges, and all liabilities with respect thereto, excluding, in the case of the
Administrative Agent and each Lender, taxes imposed on or measured by its
overall net income, and franchise taxes imposed on it (in lieu of net income
taxes), by the jurisdiction (or any political subdivision thereof) under the
Laws of which the Administrative Agent or such Lender, as the case may be, is
organized or maintains a lending office (all such non-excluded taxes, duties,
levies, imposts, deductions, assessments, fees, withholdings or similar charges,
and liabilities being hereinafter referred to as "Taxes"). If the Borrower shall
be required by any Laws to deduct any Taxes from or in respect of any sum
payable under any Loan Document to the Administrative Agent or any Lender, (i)
the sum payable shall be increased as necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section), each of the Administrative Agent and such Lender receives
an amount equal to the sum it would have received had no such deductions been
made, (ii) the Borrower shall make such deductions, (iii) the Borrower shall pay
the full amount deducted to the relevant taxation authority or other authority
in accordance with applicable Laws, and (iv) within 30 days after the date of
such payment, the Borrower shall furnish to the Administrative Agent (which
shall forward the same to such Lender) the original or a certified copy of a
receipt evidencing payment thereof.
(b) In addition, the Borrower agrees to pay any and all present or future
stamp, court or documentary taxes and any other excise or property taxes or
charges or similar levies which arise from any payment made under any Loan
Document or from the execution, delivery, performance, enforcement or
registration of, or otherwise with respect to, any Loan Document (hereinafter
referred to as "Other Taxes").
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(c) If the Borrower shall be required to deduct or pay any Taxes or Other
Taxes from or in respect of any sum payable under any Loan Document to the
Administrative Agent or any Lender, the Borrower shall also pay to the
Administrative Agent or to such Lender, as the case may be, at the time interest
is paid, such additional amount that the Administrative Agent or such Lender
specifies is necessary to preserve the after-tax yield (after factoring in all
taxes, including taxes imposed on or measured by net income) that the
Administrative Agent or such Lender would have received if such Taxes or Other
Taxes had not been imposed.
(d) The Borrower agrees to indemnify the Administrative Agent and each
Lender for (i) the full amount of Taxes and Other Taxes (including any Taxes or
Other Taxes imposed or asserted by any jurisdiction on amounts payable under
this Section) paid by the Administrative Agent and such Lender, (ii) amounts
payable and incurred under Section 3.01(c) and (iii) any liability (including
additions to tax, penalties, interest and expenses) arising therefrom or with
respect thereto, in each case whether or not such Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant Governmental Authority.
Payment under this subsection (d) shall be made within 30 days after the date
the Lender or the Administrative Agent makes a demand therefor.
3.02 Illegality.
If any Lender determines that any Law has made it unlawful, or that any
Governmental Authority has asserted that it is unlawful, for any Lender or its
applicable Lending Office to make, maintain or fund Eurodollar Rate Loans, or to
determine or charge interest rates based upon the Eurodollar Rate, then, on
notice thereof by such Lender to the Borrower through the Administrative Agent,
any obligation of such Lender to make or continue Eurodollar Rate Loans or to
convert Base Rate Committed Loans to Eurodollar Rate Loans shall be suspended
until such Lender notifies the Administrative Agent and the Borrower that the
circumstances giving rise to such determination no longer exist. Upon receipt of
such notice, the Borrower shall, upon demand from such Lender (with a copy to
the Administrative Agent), prepay or, if applicable, convert all Eurodollar Rate
Loans of such Lender to Base Rate Loans, either on the last day of the Interest
Period therefor, if such Lender may lawfully continue to maintain such
Eurodollar Rate Loans to such day, or immediately, if such Lender may not
lawfully continue to maintain such Eurodollar Rate Loans. Upon any such
prepayment or conversion, the Borrower shall also pay accrued interest on the
amount so prepaid or converted. Each Lender agrees to designate a different
Lending Office if such designation will avoid the need for such notice and will
not, in the good faith judgment of such Lender, otherwise be materially
disadvantageous to such Lender.
3.03 Inability to Determine Rates.
If the Required Lenders determine that for any reason adequate and
reasonable means do not exist for determining the Eurodollar Rate for any
requested Interest Period with respect to a proposed Eurodollar Rate Loan, or
that the Eurodollar Rate for any requested Interest Period with respect to a
proposed Eurodollar Rate Loan does not adequately and fairly reflect the cost to
such Lenders of funding such Loan, the Administrative Agent will promptly so
notify the Borrower and each Lender. Thereafter, the obligation of the Lenders
to make or maintain Eurodollar Rate Loans shall be suspended until the
Administrative Agent (upon the instruction of the Required Lenders) revokes such
notice. Upon receipt of such notice, the Borrower may revoke any pending request
37
for a Borrowing of, conversion to or continuation of Eurodollar Rate Loans or,
failing that, will be deemed to have converted such request into a request for a
Committed Borrowing of Base Rate Loans in the amount specified therein.
3.04 Increased Cost and Reduced Return; Capital Adequacy; Reserves on
Eurodollar Rate Loans.
(a) If any Lender determines that as a result of the introduction of or any
change in or in the interpretation of any Law, or such Lender's compliance
therewith, there shall be any increase in the cost to such Lender of agreeing to
make or making, funding or maintaining Eurodollar Rate Loans or (as the case may
be) issuing or participating in Letters of Credit, or a reduction in the amount
received or receivable by such Lender in connection with any of the foregoing
(excluding for purposes of this subsection (a) any such increased costs or
reduction in amount resulting from (i) Taxes or Other Taxes (as to which Section
3.01 shall govern), (ii) changes in the basis of taxation of overall net income
or overall gross income by the United States or any foreign jurisdiction or any
political subdivision of either thereof under the Laws of which such Lender is
organized or has its Lending Office, and (iii) reserve requirements contemplated
by Section 3.04(c)), then from time to time upon demand of such Lender (with a
copy of such demand to the Administrative Agent), the Borrower shall pay to such
Lender such additional amounts as will compensate such Lender for such increased
cost or reduction.
(b) If any Lender determines that the introduction of any Law regarding
capital adequacy or any change therein or in the interpretation thereof, or
compliance by such Lender (or its Lending Office) therewith, has the effect of
reducing the rate of return on the capital of such Lender or any corporation
controlling such Lender as a consequence of such Lender's obligations hereunder
(taking into consideration its policies with respect to capital adequacy and
such Lender's desired return on capital), then from time to time upon demand of
such Lender (with a copy of such demand to the Administrative Agent), the
Borrower shall pay to such Lender such additional amounts as will compensate
such Lender for such reduction.
(c) The Borrower shall pay to each Lender, as long as such Lender shall be
required to maintain reserves with respect to liabilities or assets consisting
of or including Eurocurrency funds or deposits (currently known as "Eurocurrency
liabilities"), additional interest on the unpaid principal amount of each
Eurodollar Rate Loan equal to the actual costs of such reserves allocated to
such Loan by such Lender (as determined by such Lender in good faith, which
determination shall be conclusive), which shall be due and payable on each date
on which interest is payable on such Loan, provided the Borrower shall have
received at least 15 days' prior written notice (with a copy to the
Administrative Agent) of such additional interest from such Lender. If a Lender
fails to give notice 15 days prior to the relevant Interest Payment Date, such
additional interest shall be due and payable 15 days from receipt of such
notice.
3.05 Funding Losses.
Upon demand of any Lender (with a copy to the Administrative Agent) from
time to time, the Borrower shall promptly compensate such Lender for and hold
such Lender harmless from any loss, cost or expense incurred by it as a result
of:
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(a) any continuation, conversion, payment or prepayment of any Loan other
than a Base Rate Loan on a day other than the last day of the Interest Period
for such Loan (whether voluntary, mandatory, automatic, by reason of
acceleration, or otherwise);
(b) any failure by the Borrower (for a reason other than the failure of
such Lender to make a Loan) to prepay, borrow, continue or convert any Loan
other than a Base Rate Loan on the date or in the amount notified by the
Borrower;
(c) any assignment of a Eurodollar Rate Loan on a day other than the last
day of the Interest Period therefor as a result of a request by the Borrower
pursuant to Section 10.16; or
(d) in addition to any similar obligations hereunder, within 180 days from
the date hereof, any breakage costs, charges or fees incurred with respect to a
Eurodollar Rate Loan because of the syndication of this revolving credit
facility.
The Borrower shall also pay any customary and reasonable administrative fees
charged by such Lender in connection with the foregoing.
For purposes of calculating amounts payable by the Borrower to the Lenders under
this Section 3.05, each Lender shall be deemed to have funded each Eurodollar
Rate Loan made by it at the Eurodollar Rate for such Loan by a matching deposit
or other borrowing in the London interbank eurodollar market for a comparable
amount and for a comparable period, whether or not such Eurodollar Rate Loan was
in fact so funded.
3.06 Matters Applicable to all Requests for Compensation.
(a) A certificate of the Administrative Agent or any Lender claiming
compensation under this Article III and setting forth the additional amount or
amounts to be paid to it hereunder shall be conclusive in the absence of
manifest error. In determining such amount, the Administrative Agent or such
Lender may use any reasonable averaging and attribution methods. At the
Borrower's request, such Lender shall provide to the Borrower such supporting
information related to such claim for compensation as may reasonably be
requested, provided, however, that no Lender shall be required to provide any
information that it deems confidential.
(b) Each Lender agrees that, as promptly as practicable after it becomes
aware of the occurrence of an event or the existence of a condition which would
entitle it to exercise any rights under Sections 3.01 or Section 3.04, it shall
use commercially reasonable efforts to make, fund or maintain the affected Loans
of such Lender through another lending office of such Lender if (a) as a result
thereof the additional moneys which would otherwise be required to be paid in
respect of such Loans of such Lender would be reduced or the illegality or other
adverse circumstances which would otherwise affect such Loans of such Lender
would cease to exist or the increased cost which would otherwise be required to
be paid in respect of such Loans would be reduced, and (b) the making, funding
or maintaining of such Loans through such other lending office would not
otherwise adversely affect such Loans or such Lender.
(c) In the event the Borrower becomes obligated to pay any additional
amount to any Lender pursuant to Section 3.01 or Section 3.04, as a result of
39
any event or condition described in any of such Sections, then, unless such
Lender has theretofore taken steps to remove or cure, and has removed or cured,
the conditions creating the cause of such obligation to pay such additional
amounts, Borrower may replace such Lender in accordance with Section 10.16.
3.07 Survival.
All of the Borrower's obligations under this Article III shall survive
termination of the Aggregate Commitments and repayment of all other Obligations
hereunder.
ARTICLE IV.
CONDITIONS PRECEDENT TO CREDIT EXTENSIONS
4.01 Conditions of Initial Credit Extension.
The obligation of each Lender to make its initial Credit Extension
hereunder is subject to satisfaction of the following conditions precedent:
(a) The Administrative Agent's receipt of the following, each of which
shall be originals or facsimiles (followed promptly by originals) unless
otherwise specified, each properly executed by a Responsible Officer of the
signing Loan Party, each dated the Closing Date (or, in the case of certificates
of governmental officials, a recent date before the Closing Date) and each in
form and substance satisfactory to the Administrative Agent and its legal
counsel:
(i) executed counterparts of this Agreement and the Guaranty,
sufficient in number for distribution to the Administrative Agent, Lead
Arranger, each Lender and the Borrower;
(ii) a Note executed by the Borrower in favor of each Lender
requesting a Note;
(iii) such certificates of resolutions or other action, incumbency
certificates and/or other certificates of Responsible Officers of each Loan
Party as the Administrative Agent may require evidencing the identity,
authority and capacity of each Responsible Officer thereof authorized to
act as a Responsible Officer in connection with this Agreement and the
other Loan Documents to which such Loan Party is a party;
(iv) such documents and certifications as the Administrative Agent may
reasonably require to evidence that each Loan Party is duly organized or
formed, and that each of the Borrower and Guarantor is validly existing, in
good standing and qualified to engage in business in each jurisdiction
where its ownership, lease or operation of properties or the conduct of its
business requires such qualification which are listed on Schedule 4.01,
except to the extent that failure to do so would not likely be expected to
have a Material Adverse Effect;
(v) a favorable opinion of Xxxxxxxx Xxxxxxxx & Xxxxxx P.C., counsel to
the Loan Parties, addressed to the Administrative Agent and each Lender, as
40
to the matters set forth in Exhibit G and such other matters concerning the
Loan Parties and the Loan Documents as the Required Lenders may reasonably
request;
(vi) a certificate of a Responsible Officer of each Loan Party either
(A) attaching copies of all consents, licenses and approvals required in
connection with the execution, delivery and performance by such Loan Party
and the validity against such Loan Party of the Loan Documents to which it
is a party, and such consents, licenses and approvals shall be in full
force and effect, or (B) stating that no such consents, licenses or
approvals are so required;
(vii) a certificate signed by a Responsible Officer of the Borrower
certifying (A) that the conditions specified in Sections 4.02(a) and (b)
have been satisfied, (B) that there has been no event or circumstance since
September 29, 2002 that has had or would likely be expected to have, either
individually or in the aggregate, a Material Adverse Effect; and (C) a
calculation of the Consolidated Leverage Ratio, the Consolidated Fixed
Charge Coverage Ratio and Consolidated Net Worth as of the last day of the
fiscal quarter of CEC Entertainment most recently ended prior to the
Closing Date;
(viii) evidence that all insurance required to be maintained pursuant
to the Loan Documents has been obtained and is in effect;
(ix) true, correct and complete copies of the Audited Financial
Statements and the unaudited interim financial statements for CEC
Entertainment for the nine months ended September 29, 2002;
(x) evidence that the Existing Credit Agreement has been or
concurrently with the Closing Date is being terminated and, if applicable,
all Liens securing obligations under the Existing Credit Agreement have
been or concurrently with the Closing Date are being released; and
(xi) such other assurances, certificates, documents, consents or
opinions as the Administrative Agent, the L/C Issuer or the Required
Lenders reasonably may require, including information regarding litigation,
tax, labor, pension liabilities (actual or contingent), debt agreements,
insurance, environmental matters, contingent liabilities and management of
CEC Entertainment and its Subsidiaries.
(b) Any fees required to be paid on or before the Closing Date shall have
been paid.
(c) Unless waived by the Administrative Agent, the Borrower shall have paid
all Attorney Costs of the Administrative Agent to the extent invoiced prior to
or on the Closing Date.
(d) The Closing Date shall have occurred on or before December 3, 2002.
4.02 Conditions to all Credit Extensions.
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The obligation of each Lender to honor any Request for Credit Extension
(other than a Committed Loan Notice requesting only a conversion of Committed
Loans to the other Type, or a continuation of Eurodollar Rate Loans) is subject
to the following conditions precedent:
(a) The representations and warranties of the Borrower and CEC
Entertainment and each other Loan Party contained in Article V or any other Loan
Document, or which are contained in any document furnished at any time under or
in connection herewith or therewith, shall be true and correct on and as of the
date of such Credit Extension, except to the extent that such representations
and warranties specifically refer to an earlier date, in which case they shall
be true and correct as of such earlier date, and except that for purposes of
this Section 4.02, the representations and warranties contained in subsections
(a) and (b) of Section 5.05 shall be deemed to refer to the most recent
statements furnished pursuant to clauses (a) and (b), respectively, of Section
6.01.
(b) No Default has occurred and is continuing or would result from such
proposed Credit Extension.
(c) The Administrative Agent and, if applicable, the L/C Issuer shall have
received a Request for Credit Extension in accordance with the requirements
hereof.
Each Request for Credit Extension (other than a Committed Loan Notice
requesting only a conversion of Committed Loans to the other Type or a
continuation of Eurodollar Rate Loans) submitted by the Borrower shall be deemed
to be a representation and warranty that the conditions specified in Sections
4.02(a) and (b) have been satisfied on and as of the date of the applicable
Credit Extension.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES
The Borrower and CEC Entertainment jointly and severally represent and
warrant to the Administrative Agent and the Lenders that:
5.01 Existence, Qualification and Power; Compliance with Laws.
Each Loan Party (a) is a corporation, limited liability company or limited
partnership duly organized or formed, validly existing and in good standing, if
applicable, under the Laws of the jurisdiction of its incorporation or
organization, (b) has all requisite power and authority and all requisite
governmental licenses, authorizations, consents and approvals to (i) own its
assets and carry on its business and (ii) execute, deliver and perform its
obligations under the Loan Documents to which it is a party, (c) is duly
qualified and is licensed and in good standing under the Laws of each
jurisdiction where its ownership, lease or operation of properties or the
conduct of its business requires such qualification or license (all such
jurisdictions are listed in Schedule 4.01), and (d) is in compliance with all
Laws; except in each case referred to in clause (b)(i), (c) or (d), to the
extent that failure to do so would not likely be expected to have a Material
Adverse Effect.
5.02 Authorization; No Contravention.
42
The execution, delivery and performance by each Loan Party of each Loan
Document to which such Person is party, have been duly authorized by all
necessary corporate or other organizational action, and do not and will not (a)
contravene the terms of any of such Person's Organization Documents; (b)
conflict with or result in any breach or contravention of, or the creation of
any Lien under, (i) any material Contractual Obligation to which such Person is
a party or (ii) any order, injunction, writ or decree of any Governmental
Authority or any arbitral award to which such Person or its property is subject;
or (c) violate any Law.
5.03 Governmental Authorization; Other Consents.
No approval, consent, exemption, authorization, or other action by, or
notice to, or filing with, any Governmental Authority or any other Person is
necessary or required in connection with the execution, delivery or performance
by, or enforcement against, any Loan Party of this Agreement or any other Loan
Document.
5.04 Binding Effect.
This Agreement has been, and each other Loan Document, when delivered
hereunder, will have been, duly executed and delivered by each Loan Party that
is party thereto. This Agreement constitutes, and each other Loan Document when
so delivered will constitute, a legal, valid and binding obligation of such Loan
Party, enforceable against each Loan Party that is party thereto in accordance
with its terms, except as it is hypothetically affected by (a) the effect of
bankruptcy, insolvency, reorganization, receivership, moratorium, or other
similar laws affecting the rights and remedies of creditors generally and (b)
the effect of general principles of equity.
5.05 Financial Statements; No Material Adverse Effect.
(a) The Audited Financial Statements (i) were prepared in accordance with
GAAP consistently applied throughout the period covered thereby, except as
otherwise expressly noted therein; (ii) fairly present the financial condition
of CEC Entertainment and its Subsidiaries as of the date thereof and their
results of operations for the period covered thereby in accordance with GAAP
consistently applied throughout the period covered thereby, except as otherwise
expressly noted therein; and (iii) show all material indebtedness and other
liabilities, direct or contingent, of CEC Entertainment and its Subsidiaries as
of the date thereof, including liabilities for taxes, material commitments and
Indebtedness.
(b) The unaudited consolidated financial statements of CEC Entertainment
and its Subsidiaries dated September 29, 2002, and the related consolidated
statements of income or operations, shareholders' equity and cash flows for the
fiscal quarter ended on that date (i) were prepared in accordance with GAAP
consistently applied throughout the period covered thereby, except as otherwise
expressly noted therein, and (ii) fairly present the financial condition of CEC
Entertainment and its Subsidiaries as of the date thereof and their results of
operations for the period covered thereby, subject, in the case of clauses (i)
and (ii), to the absence of footnotes and to normal year-end audit adjustments.
Schedule 5.05 sets forth all material indebtedness and other liabilities, direct
or contingent, of CEC Entertainment and its consolidated Subsidiaries as of the
43
date of such financial statements, including liabilities for taxes, material
commitments and Indebtedness.
(c) Since September 29, 2002, there has been no event or circumstance,
either individually or in the aggregate, that has had or would likely be
expected to have a Material Adverse Effect.
5.06 Litigation.
Except as specifically disclosed in Schedule 5.06, there are no actions,
suits, investigations, proceedings, claims or disputes pending or, to the
knowledge of the Borrower or CEC Entertainment after due and diligent
investigation, threatened or contemplated, at law, in equity, in arbitration or
before any Governmental Authority, by or against the Borrower or CEC
Entertainment or any of its Subsidiaries or against any of their properties or
revenues that (a) purport to affect or pertain to this Agreement or any other
Loan Document, or any of the transactions contemplated hereby, or to the ability
of the Borrower or CEC Entertainment and its Subsidiaries or any Guarantor to
perform their respective obligations under this Agreement, or (b) either
individually or in the aggregate, if determined adversely, would likely be
expected to have a Material Adverse Effect.
5.07 No Default.
Neither the Borrower nor CEC Entertainment nor any Subsidiary is in default
under or with respect to any Contractual Obligation that would, either
individually or in the aggregate, likely be expected to have a Material Adverse
Effect. No Default has occurred and is continuing or would result from the
consummation of the transactions contemplated by this Agreement or any other
Loan Document.
5.08 Ownership of Property; Liens.
Each of the Borrower and CEC Entertainment and each Subsidiary has good
record and marketable title in fee simple to, or valid leasehold interests in,
all real property necessary or used in the ordinary conduct of its business,
except for such defects in title as would not, individually or in the aggregate,
likely be expected to have a Material Adverse Effect. The property of the
Borrower and CEC Entertainment and its Subsidiaries is subject to no Liens,
other than Liens permitted by Section 7.01.
5.09 Environmental Compliance.
The Borrower and CEC Entertainment and its Subsidiaries conduct in the
ordinary course of business a review of the effect of existing Environmental
Laws and claims alleging potential liability or responsibility for violation of
any Environmental Law on their respective businesses, operations and properties,
and as a result thereof the Borrower and CEC Entertainment have reasonably
concluded that such Environmental Laws and claims would not, individually or in
the aggregate, likely be expected to have a Material Adverse Effect.
5.10 Insurance.
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The properties of the Borrower and CEC Entertainment and its Subsidiaries
are insured with financially sound and reputable insurance companies not
Affiliates of the Borrower or CEC Entertainment, in such amounts, with such
deductibles and covering such risks as are customarily carried by companies
engaged in similar businesses and owning similar properties in localities where
the Borrower or CEC Entertainment or the applicable Subsidiary operates.
5.11 Taxes.
The Borrower and CEC Entertainment and its Subsidiaries have filed all
Federal, state and other material tax returns and reports required to be filed,
and have paid all Federal, state and other material taxes, assessments, fees and
other governmental charges levied or imposed upon them or their properties,
income or assets otherwise due and payable, except those which are being
contested in good faith by appropriate proceedings diligently conducted and for
which adequate reserves have been provided in accordance with GAAP. There is no
proposed tax assessment against the Borrower or CEC Entertainment or any
Subsidiary that would, if made, have a Material Adverse Effect.
5.12 ERISA Compliance.
(a) Each Plan is in compliance in all material respects with the applicable
provisions of ERISA, the Code and other Federal or state Laws, except to the
extent that noncompliance would not likely be expected to have a Material
Adverse Effect. Each Plan that is intended to qualify under Section 401(a) of
the Code has received a favorable determination letter from the IRS or an
application for such a letter is currently being processed by the IRS with
respect thereto and, to the best knowledge of the Borrower and CEC
Entertainment, nothing has occurred which would prevent, or cause the loss of,
such qualification. The Borrower and CEC Entertainment and each ERISA Affiliate
have made all required contributions to each Plan subject to Section 412 of the
Code, and no application for a funding waiver or an extension of any
amortization period pursuant to Section 412 of the Code has been made with
respect to any Plan.
(b) There are no pending or, to the best knowledge of the Borrower and CEC
Entertainment, threatened claims, actions or lawsuits, or action by any
Governmental Authority, with respect to any Plan that would likely be expected
to have a Material Adverse Effect. There has been no prohibited transaction or
violation of the fiduciary responsibility rules with respect to any Plan that
has resulted or would likely be expected to result in a Material Adverse Effect.
(c) (i) No ERISA Event has occurred or is reasonably expected to occur;
(ii) no Pension Plan has any Unfunded Pension Liability; (iii) neither the
Borrower nor CEC Entertainment nor any ERISA Affiliate has incurred, or
reasonably expects to incur, any liability under Title IV of ERISA with respect
to any Pension Plan (other than premiums due and not delinquent under Section
4007 of ERISA); (iv) neither the Borrower nor CEC Entertainment nor any ERISA
Affiliate has incurred, or reasonably expects to incur, any liability (and no
event has occurred which, with the giving of notice under Section 4219 of ERISA,
would result in such liability) under Sections 4201 or 4243 of ERISA with
respect to a Multiemployer Plan; and (v) neither the Borrower nor CEC
Entertainment nor any ERISA Affiliate has engaged in a transaction that could be
subject to Sections 4069 or 4212(c) of ERISA.
45
5.13 Subsidiaries.
The Borrower and CEC Entertainment have no Subsidiaries other than those
specifically disclosed in Part (a) of Schedule 5.13 and have no equity
investments in any other corporation or entity other than those specifically
disclosed in Part(b) of Schedule 5.13. The Borrower shall deliver to the
Administrative Agent an updated Schedule 5.13 each time the annual financial
statement is delivered or when a Required Guarantor is formed or acquired, which
upon delivery shall become the new Schedule 5.13.
5.14 Margin Regulations; Investment Company Act; Public Utility Holding
Company Act.
(a) The Borrower and CEC Entertainment are not engaged and will not engage,
principally or as one of their important activities, in the business of
purchasing or carrying margin stock (within the meaning of Regulation U issued
by the FRB), or extending credit for the purpose of purchasing or carrying
margin stock.
(b) None of the Borrower, CEC Entertainment, any Person Controlling the
Borrower, or any Subsidiary (i) is a "holding company," or a "subsidiary
company" of a "holding company," or an "affiliate" of a "holding company" or of
a "subsidiary company" of a "holding company," within the meaning of the Public
Utility Holding Company Act of 1935, or (ii) is or is required to be registered
as an "investment company" under the Investment Company Act of 1940.
5.15 Disclosure.
No report, financial statement, certificate or other information furnished
(whether in writing or orally by a Responsible Officer) by or on behalf of any
Loan Party to the Administrative Agent or any Lender in connection with the
transactions contemplated hereby and the negotiation of this Agreement or
delivered hereunder (as modified or supplemented by other information so
furnished) contains any material misstatement of fact or omits to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that, with
respect to projected financial information, CEC Entertainment and the Borrower
represent only that such information was prepared in good faith based upon
assumptions believed to be reasonable at the time.
5.16 Compliance with Laws.
Each of the Borrower and CEC Entertainment and each Subsidiary is in
compliance in all material respects with the requirements of all Laws and all
orders, writs, injunctions and decrees applicable to it or to its properties,
except in such instances in which (a) such requirement of Law or order, writ,
injunction or decree is being contested in good faith by appropriate proceedings
diligently conducted or (b) the failure to comply therewith, either individually
or in the aggregate, would not likely be expected to have a Material Adverse
Effect.
5.17 Intellectual Property; Licenses, Etc.
46
CEC Entertainment and its Subsidiaries own, or possess the right to use,
all of the trademarks, service marks, trade names, copyrights, patents, patent
rights, franchises, licenses and other intellectual property rights
(collectively, "IP Rights") that are reasonably necessary for the operation of
their respective businesses, without conflict with the rights of any other
Person, except to the extent that failure to do so would not likely be expected
to have a Material Adverse Effect. To the best knowledge of the Borrower and CEC
Entertainment, no slogan or other advertising device, product, process, method,
substance, part or other material now employed, or now contemplated to be
employed, by the Borrower or CEC Entertainment or any Subsidiary infringes upon
any rights held by any other Person. No claim or litigation regarding any of the
foregoing is pending or, to the best knowledge of the Borrower and CEC
Entertainment, threatened, which, either individually or in the aggregate, would
likely be expected to have a Material Adverse Effect.
ARTICLE VI.
AFFIRMATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, any Loan or
other Obligation hereunder shall remain unpaid or unsatisfied, or any Letter of
Credit shall remain outstanding, the Borrower shall cause CEC Entertainment, and
each of its Subsidiaries (except in the case of the covenants set forth in
Sections 6.01, 6.02, 6.03 and 6.11), to:
6.01 Financial Statements.
Deliver to the Administrative Agent for distribution to each Lender, in
form and detail satisfactory to the Administrative Agent and the Required
Lenders:
(a) as soon as available, but in any event within 90 days after the end of
each fiscal year of CEC Entertainment, a consolidated balance sheet of CEC
Entertainment and its Subsidiaries as at the end of such fiscal year, and the
related consolidated statements of income or operations, shareholders' equity
and cash flows for such fiscal year, setting forth in each case in comparative
form the figures for the previous fiscal year, all in reasonable detail and
prepared in accordance with GAAP, audited and accompanied by a report and
opinion of an independent certified public accountant of nationally recognized
standing reasonably acceptable to the Required Lenders, which report and opinion
shall be prepared in accordance with generally accepted auditing standards and
shall not be subject to any "going concern" or like qualification or exception
or any qualification or exception as to the scope of such audit; and
(b) as soon as available, but in any event within 45 days after the end of
each of the first three fiscal quarters of each fiscal year of CEC
Entertainment, a consolidated balance sheet of CEC Entertainment and its
Subsidiaries as at the end of such fiscal quarter, and the related consolidated
statements of income or operations, shareholders' equity and cash flows for such
fiscal quarter and for the portion of CEC Entertainment's fiscal year then
ended, setting forth in each case in comparative form the figures for the
corresponding fiscal quarter of the previous fiscal year and the corresponding
portion of the previous fiscal year, all in reasonable detail and certified by a
Responsible Officer of the Borrower as fairly presenting the financial
condition, results of operations, shareholders' equity and cash flows of CEC
47
Entertainment and its Subsidiaries in accordance with GAAP, subject only to
normal year-end audit adjustments and the absence of footnotes.
As to any information contained in materials furnished pursuant to Section
6.02(d), CEC Entertainment shall not be separately required to furnish such
information under clause (a) or (b) above, but the foregoing shall not be in
derogation of the obligation of CEC Entertainment to furnish the information and
materials described in subsections (a) and (b) above at the times specified
therein.
6.02 Certificates; Other Information.
Deliver to the Administrative Agent for distribution to each Lender, in
form and detail satisfactory to the Administrative Agent and the Required
Lenders:
(a) concurrently with the delivery of the financial statements referred to
in Section 6.01(a), a certificate of its independent certified public
accountants certifying such financial statements;
(b) concurrently with the delivery of the financial statements referred to
in Sections 6.01(a) and (b), a duly completed Compliance Certificate signed by a
Responsible Officer of the Borrower and CEC Entertainment;
(c) promptly after any request by the Administrative Agent or any Lender,
copies of any detailed audit reports, management letters or recommendations
submitted to the board of directors (or the audit committee of the board of
directors) of CEC Entertainment by independent accountants in connection with
the accounts or books of CEC Entertainment or any Subsidiary, or any audit of
any of them;
(d) promptly after the same are available, copies of each annual report,
proxy or financial statement or other report or communication sent to the
stockholders of CEC Entertainment, and copies of all annual, regular, periodic
and special reports and registration statements which CEC Entertainment may file
or be required to file with the SEC under Section 13 or 15(d) of the Securities
Exchange Act of 1934, and not otherwise required to be delivered to the
Administrative Agent pursuant hereto; and
(e) reasonably promptly, such additional reasonable information regarding
the business, financial or corporate affairs of the Borrower or CEC
Entertainment or any Subsidiary, or compliance with the terms of the Loan
Documents, as the Administrative Agent or any Lender may from time to time
reasonably request.
Documents required to be delivered pursuant to Section 6.01(a) or (b) or
Section 6.02(c) (to the extent any such documents are included in materials
otherwise filed with the SEC) may be delivered electronically and if so
delivered, shall be deemed to have been delivered on the date (i) on which CEC
Entertainment posts such documents, or provides a link thereto on CEC
Entertainment's website on the Internet at the website address listed on
Schedule 10.02; or (ii) on which such documents are posted on CEC
Entertainment's behalf on IntraLinks/IntraAgency or another relevant website, if
any, to which each Lender and the Administrative Agent have access (whether a
commercial, third-party website or whether sponsored by the Administrative
48
Agent); provided that: (i) the Borrower shall deliver paper copies of such
documents to the Administrative Agent or any Lender that requests the Borrower
to deliver such paper copies until a written request to cease delivering paper
copies is given by the Administrative Agent or such Lender and (ii) the Borrower
shall notify (which may be by facsimile or electronic mail) the Administrative
Agent and each Lender of the posting of any such documents and provide to the
Administrative Agent by electronic mail electronic versions (i.e., soft copies)
of such documents. Notwithstanding anything contained herein, in every instance
the Borrower shall be required to provide paper copies of the Compliance
Certificates required by Section 6.02(b) to the Administrative Agent for
distribution to each of the Lenders. Except for such Compliance Certificates,
the Administrative Agent shall have no obligation to request the delivery or to
maintain copies of the documents referred to above, and in any event shall have
no responsibility to monitor compliance by the Borrower with any such request
for delivery, and each Lender shall be solely responsible for requesting
delivery to it or maintaining its copies of such documents.
6.03 Notices.
Promptly notify the Administrative Agent and each Lender:
(a) of the occurrence of any Default;
(b) of any matter that has resulted or would likely be expected to result
in a Material Adverse Effect, including (i) breach or non-performance of, or any
default under, a material Contractual Obligation of the Borrower or CEC
Entertainment or any Subsidiary; (ii) any material dispute, material litigation,
material contingent liabilities, material investigation, material proceeding or
suspension between the Borrower or CEC Entertainment or any Subsidiary and any
Governmental Authority; or (iii) the commencement of, or any material
development in, any litigation or proceeding affecting the Borrower or CEC
Entertainment or any Subsidiary, including pursuant to any applicable
Environmental Laws;
(c) of the occurrence of any ERISA Event;
(d) of any material change in accounting policies or financial reporting
practices by the Borrower or CEC Entertainment or any Subsidiary;
(e) of (i) any sale of capital stock or other equity interest, other than
as permitted by Section 7.05, or (ii) any issuance or incurrence of any
Indebtedness, other than as permitted by Section 7.03, by the Borrower or CEC
Entertainment or any of its Subsidiaries; and
(f) of any asset sale by the Borrower or CEC Entertainment or any of its
Subsidiaries, other than Dispositions permitted by Section 7.05.
Each notice pursuant to this Section shall be accompanied by a statement of
a Responsible Officer of the Borrower or CEC Entertainment setting forth details
of the occurrence referred to therein and stating what action the Borrower or
CEC Entertainment has taken and proposes to take with respect thereto. Each
notice pursuant to Section 6.03(a) shall describe with particularity any and all
provisions of this Agreement and any other Loan Document that have been
breached.
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6.04 Payment of Obligations.
Pay and discharge as the same shall become due and payable, all its
material obligations and liabilities, including (a) all tax liabilities,
assessments and governmental charges or levies upon it or its properties or
assets, unless the same are being contested in good faith by appropriate
proceedings diligently conducted and adequate reserves in accordance with GAAP
are being maintained by the Borrower or CEC Entertainment or such Subsidiary;
(b) all lawful claims which, if unpaid, would by law become a Lien upon its
property; and (c) all material Indebtedness, as and when due and payable on or
before the expiration of the applicable cure or grace periods, but subject to
any subordination provisions contained in any instrument or agreement evidencing
such Indebtedness.
6.05 Preservation of Existence, Etc.
(a) Preserve, renew and maintain in full force and effect its legal
existence and good standing under the Laws of the jurisdiction of its
organization except in a transaction permitted by Section 7.04 or 7.05; (b) take
all reasonable action to maintain all rights, privileges, permits, licenses and
franchises necessary or desirable in the normal conduct of its business, except
to the extent that failure to do so would not likely be expected to have a
Material Adverse Effect; and (c) preserve or renew all of its registered
patents, trademarks, trade names and service marks, the non-preservation of
which would likely be expected to have a Material Adverse Effect.
6.06 Maintenance of Properties.
(a) Maintain, preserve and protect all of its material properties and
equipment necessary in the operation of its business in good working order and
condition, ordinary wear and tear excepted; (b) make all necessary repairs
thereto and renewals and replacements thereof except where the failure to do so
would not likely be expected to have a Material Adverse Effect; and (c) use the
standard of care typical in the industry in the operation and maintenance of its
facilities.
6.07 Maintenance of Insurance.
Maintain with financially sound and reputable insurance companies not
Affiliates of the Borrower or CEC Entertainment, insurance with respect to its
properties and business against loss or damage of the kinds customarily insured
against by Persons engaged in the same or similar business, of such types and in
such amounts as are customarily carried under similar circumstances by such
other Persons and providing for not less than 30 days' prior notice to the
Administrative Agent of termination, lapse or cancellation of such insurance.
6.08 Compliance with Laws.
Comply in all material respects with the requirements of all Laws and all
orders, writs, injunctions and decrees applicable to it or to its business or
property, except in such instances in which (a) such requirement of Law or
order, writ, injunction or decree is being contested in good faith by
appropriate proceedings diligently conducted; or (b) the failure to comply
therewith would not likely be expected to have a Material Adverse Effect.
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6.09 Books and Records.
(a) Maintain proper books of record and account, in which full, true and
correct entries in conformity with GAAP consistently applied shall be made of
all financial transactions and matters involving the assets and business of CEC
Entertainment or such Subsidiary, as the case may be; and (b) maintain such
books of record and account in material conformity with all applicable
requirements of any Governmental Authority having regulatory jurisdiction over
CEC Entertainment or such Subsidiary, as the case may be.
6.10 Inspection Rights.
Permit representatives and independent contractors of the Administrative
Agent and each Lender to visit and inspect any of its properties, to examine its
corporate, financial and operating records, and make copies thereof or abstracts
therefrom, and to discuss its affairs, finances and accounts with its directors,
officers, and independent public accountants, all at the expense of the Borrower
or CEC Entertainment, as the case may be, and at such reasonable times during
normal business hours and as often as may be reasonably desired, upon reasonable
advance notice to the Borrower or CEC Entertainment, as the case may be.
6.11 Use of Proceeds.
Use the proceeds of the Credit Extensions to refinance existing
Indebtedness evidenced by the Existing Credit Agreement and for working capital,
capital expenditures, permitted stock repurchases under Section 7.06(d),
permitted acquisitions under Section 7.02(i) and for general corporate purposes
not in contravention of any Law or of any Loan Document.
6.12 Additional Guarantors.
Notify the Administrative Agent prior to any Person becoming a Required
Guarantor, and promptly thereafter (and in any event within 30 days), cause such
Person to (a) become a Guarantor by executing and delivering to the
Administrative Agent a counterpart of the Guaranty or such other document as the
Administrative Agent shall reasonably deem appropriate for such purpose, and (b)
deliver to the Administrative Agent documents of the types referred to in
clauses (iii) and (iv) of Section 4.01(a) and favorable opinions of counsel to
such Person (which shall cover, among other things, the legality, validity,
binding effect and enforceability of the documentation referred to in clause
(a)), all in form, content and scope reasonably satisfactory to the
Administrative Agent.
ARTICLE VII.
NEGATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, any Loan or
other Obligation hereunder shall remain unpaid or unsatisfied, or any Letter of
Credit shall remain outstanding, the Borrower and CEC Entertainment shall not,
nor shall they permit any Subsidiary to, directly or indirectly:
7.01 Liens.
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Create, incur, assume or suffer to exist any Lien upon any of its property,
assets or revenues, whether now owned or hereafter acquired, other than the
following:
(a) Liens pursuant to this Agreement;
(b) Liens existing on the date hereof and listed on Schedule 7.01 and any
renewals or extensions thereof, provided that the property covered thereby is
not increased (other than after acquired title in or on such property and
proceeds of existing collateral) and any renewal or extension of the obligations
secured or benefited thereby is permitted by Section 7.03(b);
(c) Liens for taxes not yet due or which are being contested in good faith
and by appropriate proceedings diligently conducted, if adequate reserves with
respect thereto are maintained on the books of the applicable Person in
accordance with GAAP;
(d) carriers', warehousemen's, mechanics', materialmen's, repairmen's,
landlords' or other like Liens arising in the ordinary course of business which
are not overdue for a period of more than 30 days or which are being contested
in good faith and by appropriate proceedings diligently conducted, if adequate
reserves with respect thereto are maintained on the books of the applicable
Person;
(e) pledges or deposits in the ordinary course of business in connection
with workers' compensation, unemployment insurance and other social security
legislation, other than any Lien imposed by ERISA;
(f) deposits to secure the performance of bids, trade contracts and leases
(other than Indebtedness or synthetic leases), statutory obligations, surety
bonds (other than bonds related to judgments or litigation), performance bonds
and other obligations of a like nature incurred in the ordinary course of
business;
(g) easements, rights-of-way, restrictions and other similar encumbrances
affecting real property which, in the aggregate, are not substantial in amount,
and which do not in any case materially detract from the value of the property
subject thereto or materially interfere with the ordinary conduct of the
business of the applicable Person;
(h) Liens securing judgments for the payment of money not constituting an
Event of Default under Section 8.01(h) or securing appeal or other surety bonds
related to such judgments;
(i) Liens securing Indebtedness permitted under Section 7.03(e); provided
that (i) such Liens do not at any time encumber any property other than the
property financed by such Indebtedness and (ii) the Indebtedness secured thereby
does not exceed the cost or fair market value, whichever is lower, of the
property being acquired on the date of acquisition;
(j) any interest or title of a licensor, lessor, or sublessor under any
license or lease and any interest or title of a licensee, lessee, or sublessee
under any license, cross-license, or lease in any event entered into in the
ordinary course of business and not otherwise prohibited by the terms of the
Loan Documents;
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(k) Liens against equipment arising from precautionary UCC financing
statement filings regarding operating leases entered into by such Person in the
ordinary course of business; and
(l) nonconsensual Liens in favor of banking institutions arising as a
matter of law and encumbering the deposits (including the right of set-off) held
by such banking institutions in the ordinary course of business.
7.02 Investments.
Make any Investments, except:
(a) Investments held by CEC Entertainment or such Subsidiary in the form of
cash equivalents, U.S. government obligations with maturities of less than one
(1) year, and other similar investments approved by Administrative Agent;
(b) advances to officers, directors and employees of CEC Entertainment and
Subsidiaries for travel, entertainment, relocation and analogous ordinary
business purposes;
(c) Investments of CEC Entertainment in the Borrower and in any Subsidiary
which is a Guarantor and Investments of any Subsidiary in the Borrower or in
another Guarantor; provided that all inter-company Indebtedness owed to the
Borrower or CEC Entertainment shall be subordinate in all respects to the
Obligations;
(d) Investments consisting of extensions of credit in the nature of
accounts receivable or notes receivable arising from the grant of trade credit
in the ordinary course of business, and Investments received in satisfaction or
partial satisfaction thereof from financially troubled account debtors to the
extent reasonably necessary in order to prevent or limit loss;
(e) Guarantees permitted by Section 7.03;
(f) investments of the Borrower and Guarantors in (i) the International
Association of CEC Entertainment, Inc. and (ii) any Subsidiary which is not a
Guarantor, in an aggregate amount (including (i) and (ii)) not to exceed
$20,000,000 (provided that all Investments in the form of inter-company
Indebtedness owed to the Borrower or CEC Entertainment shall be subordinate in
all respects to the Obligations);
(g) Iandnvestments of the Borrower and Guarantors in (i) 3557944 Canada,
Inc. and any other Subsidiaries organized under the laws of Canada or a province
of Canada up to an aggregate amount at any time outstanding of not more than the
greater of $25,000,000 or 5% of Consolidated Net Worth and (ii) any other
foreign Subsidiary up to an aggregate amount at any time outstanding of not more
than $5,000,000;
(h) other Investments of the Borrower and Guarantors not exceeding
$5,000,000 in the aggregate in any fiscal year of CEC Entertainment, including
investments in Affiliates (except for investments in the International
Association of CEC Entertainment, Inc. and TJH Restaurant Group, Inc.); and
53
(i) acquisitions of all of the assets of or equity interests in a
non-Affiliate company in substantially similar lines of business as conducted by
the Borrower and CEC Entertainment and its Subsidiaries, provided the purchase
price (including cash and any credit or non-equity financing extended by or on
behalf of Borrower or CEC Entertainment or a Subsidiary) in any single
acquisition shall not exceed $20,000,000 and the aggregate purchase price
(including cash and any credit or non-equity financing extended by or on behalf
of Borrower or CEC Entertainment or a Subsidiary) in any series of acquisitions
shall not exceed $40,000,000 in any twelve month period, without the prior
written consent of the Required Lenders.
7.03 Indebtedness.
Create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness under the Loan Documents;
(b) Indebtedness outstanding on the date hereof and listed on Schedule 7.03
and any refinancings, refundings, renewals or extensions thereof; provided that
the amount of such Indebtedness is not increased at the time of such
refinancing, refunding, renewal or extension except by an amount equal to a
reasonable premium or other reasonable amount paid, and fees and expenses
reasonably incurred, in connection with such refinancing and by an amount equal
to any existing commitments unutilized thereunder;
(c) Guarantees of the Borrower or CEC Entertainment or any Subsidiary in
respect of Indebtedness otherwise permitted hereunder of the Borrower or any
Guarantor;
(d) non-speculative obligations (contingent or otherwise) of the Borrower
or CEC Entertainment or any Subsidiary existing or arising under any Swap
Contract with any Lender, provided that (i) such obligations are (or were)
entered into by such Person in the ordinary course of business for the purpose
of directly mitigating risks associated with liabilities, commitments,
investments, assets, or property held or reasonably anticipated by such Person,
or changes in the value of securities issued by such Person, and not for
purposes of speculation or taking a "market view;" and (ii) such Swap Contract
does not contain any provision exonerating the non-defaulting party from its
obligation to make payments on outstanding transactions to the defaulting party;
(e) Indebtedness of the Borrower or CEC Entertainment or any Subsidiary in
respect of capital leases, Synthetic Lease Obligations and purchase money
obligations for fixed or capital assets within the limitations set forth in
Section 7.01(i) and unsecured Indebtedness; provided, however, that the
aggregate amount of all such Indebtedness at any one time outstanding shall not
exceed $15,000,000;
(f) inter-company debt between the Borrower and CEC Entertainment and its
Subsidiaries as permitted by the Investment limitations outlined above; and
(g) Indebtedness in respect of accounts payable, accrued liabilities, and
deferred taxes incurred in the ordinary course of business.
7.04 Fundamental Changes.
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Merge, dissolve, liquidate, consolidate with or into another Person, or
Dispose of (whether in one transaction or in a series of transactions) all or
substantially all of its assets (whether now owned or hereafter acquired) to or
in favor of any Person, except that, so long as no Default has occurred and is
continuing or would result therefrom:
(a) CEC Entertainment or any Subsidiary may merge with (i) the Borrower,
provided that the Borrower or CEC Entertainment shall be the continuing or
surviving Person, or (ii) any one or more other Subsidiaries, provided that when
any Guarantor is merging with another Subsidiary, the Guarantor shall be the
continuing or surviving Person or such surviving Person shall promptly become a
Guarantor hereunder; and
(b) any Subsidiary may Dispose of all or substantially all of its assets
(upon voluntary liquidation or otherwise) to the Borrower or to CEC
Entertainment or to another Subsidiary; provided that if the transferor in such
a transaction is a Guarantor, then the transferee must either be the Borrower or
a Guarantor or promptly become a Guarantor.
7.05 Dispositions.
Make any Disposition or enter into any agreement to make any Disposition,
except:
(a) Dispositions of obsolete or worn out property, whether now owned or
hereafter acquired, in the ordinary course of business;
(b) Dispositions of inventory in the ordinary course of business;
(c) Dispositions of equipment or real property to the extent that (i) such
property is exchanged for credit against the purchase price of similar
replacement property or (ii) the proceeds of such Disposition are reasonably
promptly applied to the purchase price of such replacement property;
(d) Dispositions of property by CEC Entertainment or any Subsidiary to CEC
Entertainment or to the Borrower or to a direct or indirect wholly-owned
Subsidiary; provided that if the transferor of such property is a Guarantor, the
transferee thereof must either be the Borrower or a Guarantor or shall promptly
become a Guarantor.
(e) Dispositions permitted by Section 7.04; and
(f) Dispositions by the Borrower and CEC Entertainment and its Subsidiaries
not otherwise permitted under clauses (a) through (e) of this Section 7.05;
provided that (i) at the time of such Disposition, no Default shall have
occurred and be continuing or would result from such Disposition and (ii) the
aggregate book value of all property Disposed of in reliance on this clause (f)
(other than Discovery Zone real property held specifically for Disposition) in
any fiscal year shall not exceed $10,000,000;
provided, however, that any Disposition pursuant to clauses (a) through (c)
and clause (f) shall be for fair market value in an arm's length transaction.
7.06 Restricted Payments.
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Declare or make, directly or indirectly, any Restricted Payment, or incur
any obligation (contingent or otherwise) to do so, except that:
(a) each Subsidiary may make Restricted Payments to the Borrower and to CEC
Entertainment and to any Guarantor which is a Subsidiary;
(b) the Borrower and CEC Entertainment and each Subsidiary may declare and
make dividend payments or other distributions payable solely in the common stock
or other common equity interests of such Person to the Borrower or CEC
Entertainment or any Guarantor which is a Subsidiary;
(c) the Borrower and CEC Entertainment and each Guarantor which is a
Subsidiary may purchase, redeem or otherwise acquire shares of its common stock
or other common equity interests or warrants or options to acquire any such
shares with the proceeds received from the substantially concurrent issue of new
shares of its common stock or other common equity interests;
(d) CEC Entertainment may declare or pay cash dividends to its stockholders
and purchase, redeem or otherwise acquire shares of its capital stock (including
its preferred stock) or warrants, rights or options to acquire any such shares
for cash solely out of 50% of net income of CEC Entertainment and its
Subsidiaries arising in the preceding 12-month period and computed on a
cumulative consolidated basis with other such transactions by CEC Entertainment
during that period; provided that immediately after giving effect to such
proposed action, no Default would exist; and
(e) CEC Entertainment may purchase, redeem or otherwise acquire shares of
its preferred stock, provided, however, that the aggregate amount of all such
purchases, redemptions or acquisitions shall not exceed $3,000,000.
7.07 Change in Nature of Business.
Engage in any material line of business substantially different from those
lines of business conducted by the Borrower and CEC Entertainment and its
Subsidiaries on the date hereof or any business substantially related or
incidental thereto.
7.08 Transactions with Affiliates.
Enter into any transaction of any kind with any Affiliate of the Borrower
or of CEC Entertainment, whether or not in the ordinary course of business,
other than on fair and reasonable terms substantially as favorable to the
Borrower or CEC Entertainment or such Subsidiary as would be obtainable by the
Borrower or CEC Entertainment or such Subsidiary at the time in a comparable
arm's length transaction with a Person other than an Affiliate, provided that
the foregoing arm's length restriction shall not apply to transactions between
or among the Borrower or CEC Entertainment and International Association of CEC
Entertainment, Inc. or to transactions between and among the Borrower and CEC
Entertainment and any Subsidiary which is a Guarantor.
7.09 Burdensome Agreements.
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Enter into any Contractual Obligation (other than this Agreement or any
other Loan Document) that limits the ability (i) of any Subsidiary to make
Restricted Payments to the Borrower or any Guarantor or to otherwise transfer
property to the Borrower or any Guarantor, (ii) of any Subsidiary to Guarantee
the Indebtedness of the Borrower or (iii) of the Borrower or CEC Entertainment
or any Subsidiary to create, incur, assume or suffer to exist Liens on property
of such Person; provided, however, that this clause (iii) shall not prohibit any
negative pledge incurred or provided in favor of any holder of purchase money
Indebtedness solely to the extent any such negative pledge relates to the
property financed by such purchase money Indebtedness.
7.10 Use of Proceeds.
Use the proceeds of any Credit Extension, whether directly or indirectly,
and whether immediately, incidentally or ultimately, to purchase or carry margin
stock (within the meaning of Regulation U of the FRB) or to extend credit to
others for the purpose of purchasing or carrying margin stock or to refund
indebtedness originally incurred for such purpose, except as permitted under
Section 7.06(d), provided, however, that any action taken under Section 7.06(d)
shall at all times be in compliance with Regulation U of the FRB.
7.11 Financial Covenants.
(a) Consolidated Net Worth. Permit Consolidated Net Worth at any time to be
less than the sum of (a) $285,000,000, (b) an amount equal to 50% of the
Consolidated Net Income earned in each full fiscal quarter ending after
September 29, 2002 (with no deduction for a net loss in any such fiscal quarter)
and (c) an amount equal to 100% of the aggregate increases in Shareholders'
Equity of CEC Entertainment and its Subsidiaries after September 29, 2002 by
reason of the issuance and sale of capital stock or other equity interests of
CEC Entertainment or any Subsidiary (other than issuances to the Borrower or a
Guarantor), including upon any conversion of debt securities of CEC
Entertainment into such capital stock or other equity interests.
(b) Consolidated Fixed Charge Coverage Ratio. Permit the Consolidated Fixed
Charge Coverage Ratio, as of the end of any fiscal quarter, to be less than the
ratio of 1.5 to 1.0.
(c) Consolidated Leverage Ratio. Permit the Consolidated Leverage Ratio, as
of the end of any fiscal quarter, to be greater than the ratio of 3.25 to 1.00.
7.12 Intentionally Omitted.
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ARTICLE VIII.
EVENTS OF DEFAULT AND REMEDIES
8.01 Events of Default.
Any of the following shall constitute an Event of Default:
(a) Non-Payment. The Borrower or any other Loan Party fails to pay (i) when
and as required to be paid herein, any amount of principal of any Loan or any
L/C Obligation, or (ii) within five Business Days after the same becomes due,
any interest on any Loan or on any L/C Obligation, or any commitment or other
fee due hereunder, or (iii) within seven Business Days after the same becomes
due, any other amount payable hereunder or under any other Loan Document; or
(b) Specific Covenants. The Borrower or CEC Entertainment fails to perform
or observe any term, covenant or agreement contained in any of Section 6.01,
6.02, 6.03, 6.05, 6.10, 6.11 or 6.12 or Article VII; or
(c) Other Defaults. Any Loan Party fails to perform or observe any other
covenant or agreement (not specified in subsection (a) or (b) above) contained
in any Loan Document on its part to be performed or observed and such failure
continues for 30 days; or
(d) Representations and Warranties. Any representation, warranty,
certification or statement of fact made or deemed made by or on behalf of the
Borrower or CEC Entertainment or any other Loan Party herein, in any other Loan
Document, or in any document delivered in connection herewith or therewith shall
be incorrect or misleading in any material respect when made or deemed made; or
(e) Cross-Default. (i) The Borrower or CEC Entertainment or any Subsidiary
(A) fails to make any payment when due (whether by scheduled maturity, required
prepayment, acceleration, demand, or otherwise) in respect of any Indebtedness
or Guarantee (other than Indebtedness hereunder and Indebtedness under Swap
Contracts) having an aggregate principal amount (including undrawn committed or
available amounts and including amounts owing to all creditors under any
combined or syndicated credit arrangement) of more than the Threshold Amount and
all grace or cure periods have lapsed, or (B) fails to observe or perform any
other agreement or condition relating to any such Indebtedness or Guarantee of
more than the Threshold Amount or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event occurs, the effect
of which default or other event is to cause, or to permit the holder or holders
of such Indebtedness or the beneficiary or beneficiaries of such Guarantee (or a
trustee or agent on behalf of such holder or holders or beneficiary or
beneficiaries) to cause, with the giving of notice if required, such
Indebtedness to be demanded or to become due or to be repurchased, prepaid,
defeased or redeemed (automatically or otherwise), or an offer to repurchase,
prepay, defease or redeem such Indebtedness to be made, prior to its stated
maturity, or such Guarantee to become payable or cash collateral in respect
thereof to be demanded, provided, however, if Borrower or CEC Entertainment or
any Subsidiary elects to contest through judicial process the validity of a
non-financial contractual claim against it, then the determination of a default
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in such matter shall be controlled by Section 8.01(h), provided further,
however, that a non-financial contract shall not include financial contracts
such as notes, bonds, swaps, debentures, loan agreements or other similar
instruments; or (ii) there occurs under any Swap Contract an Early Termination
Date (as defined in such Swap Contract) resulting from (A) any event of default
under such Swap Contract as to which the Borrower or CEC Entertainment or any
Subsidiary is the Defaulting Party (as defined in such Swap Contract) or (B) any
Termination Event (as so defined) under such Swap Contract as to which the
Borrower or CEC Entertainment or any Subsidiary is an Affected Party (as so
defined) and, in either event, the Swap Termination Value owed by the Borrower
or CEC Entertainment or such Subsidiary as a result thereof is greater than the
Threshold Amount; or
(f) Insolvency Proceedings, Etc. Any Loan Party or any of its Subsidiaries
institutes or consents to the institution of any proceeding under any Debtor
Relief Law, or makes an assignment for the benefit of creditors; or applies for
or consents to the appointment of any receiver, trustee, custodian, conservator,
liquidator, rehabilitator or similar officer for it or for all or any material
part of its property; or any receiver, trustee, custodian, conservator,
liquidator, rehabilitator or similar officer is appointed without the
application or consent of such Person and the appointment continues undischarged
or unstayed for 90 calendar days; or any proceeding under any Debtor Relief Law
relating to any such Person or to all or any material part of its property is
instituted without the consent of such Person and continues undismissed or
unstayed for 90 calendar days, or an order for relief is entered in any such
proceeding; or
(g) Inability to Pay Debts; Attachment. (i) The Borrower or CEC
Entertainment or any Subsidiary becomes unable or admits in writing its
inability or fails generally to pay its debts as they become due, or (ii) any
writ or warrant of attachment or execution or similar process is issued or
levied against all or any material part of the property of any such Person and
is not released, vacated or fully bonded within 30 days after its issue or levy;
or
(h) Judgments. There is entered against the Borrower or CEC Entertainment
or any Subsidiary (i) a final judgment or order for the payment of money in an
aggregate amount exceeding the Threshold Amount (to the extent not covered by
independent third-party insurance as to which the insurer does not dispute
coverage), or (ii) any one or more non-monetary final judgments that have, or
would likely be expected to have, individually or in the aggregate, a Material
Adverse Effect and, in either case, (A) enforcement proceedings are commenced by
any creditor upon such judgment or order, or (B) there is a period of 10
consecutive days during which a stay of enforcement of such judgment, by reason
of a pending appeal or otherwise, is not in effect; or
(i) ERISA. (i) An ERISA Event occurs with respect to a Pension Plan or
Multiemployer Plan which has resulted or would likely be expected to result in
liability of the Borrower or CEC Entertainment under Title IV of ERISA to the
Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount in excess of
the Threshold Amount, or (ii) the Borrower or CEC Entertainment or any ERISA
Affiliate fails to pay when due, after the expiration of any applicable grace
period, any installment payment with respect to its withdrawal liability under
Section 4201 of ERISA under a Multiemployer Plan in an aggregate amount in
excess of the Threshold Amount; or
59
(j) Invalidity of Loan Documents. Any Loan Document, at any time after its
execution and delivery and for any reason other than as expressly permitted
hereunder or satisfaction in full of all the Obligations, ceases to be in full
force and effect; or any Loan Party or any other Person contests in any manner
the validity or enforceability of any Loan Document; or any Loan Party denies
that it has any or further liability or obligation under any Loan Document, or
purports to revoke, terminate or rescind any Loan Document; or
(k) Change of Control. There occurs any Change of Control with respect to
CEC Entertainment.
8.02 Remedies Upon Event of Default.
If any Event of Default occurs and is continuing, the Administrative Agent
shall, at the request of, or may, with the consent of, the Required Lenders,
take any or all of the following actions:
(a) declare the commitment of each Lender to make Loans and any obligation
of the L/C Issuer to make L/C Credit Extensions to be terminated, whereupon such
commitments and obligation shall be terminated;
(b) declare the unpaid principal amount of all outstanding Loans, all
interest accrued and unpaid thereon, and all other amounts owing or payable
hereunder or under any other Loan Document to be immediately due and payable,
without presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived by the Borrower;
(c) require that the Borrower Cash Collateralize the L/C Obligations (in an
amount equal to the then Outstanding Amount thereof); and
(d) exercise on behalf of itself and the Lenders all rights and remedies
available to it and the Lenders under the Loan Documents or applicable law;
provided, however, that upon the occurrence of an actual or deemed entry of an
order for relief with respect to the Borrower or CEC Entertainment under the
Bankruptcy Code of the United States, the obligation of each Lender to make
Loans and any obligation of the L/C Issuer to make L/C Credit Extensions shall
automatically terminate, the unpaid principal amount of all outstanding Loans
and all interest and other amounts as aforesaid shall automatically become due
and payable, and the obligation of the Borrower to Cash Collateralize the L/C
Obligations as aforesaid shall automatically become effective, in each case
without further act of the Administrative Agent or any Lender.
8.03 Application of Funds.
After the exercise of remedies provided for in Section 8.02 (or after the Loans
have automatically become immediately due and payable and the L/C Obligations
have automatically been required to be Cash Collateralized as set forth in the
proviso to Section 8.02), any amounts received on account of the Obligations
shall be applied by the Administrative Agent in the following order:
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First, to payment of that portion of the Obligations constituting fees,
indemnities, expenses and other amounts (including Attorney Costs and amounts
payable under Article III) payable to the Administrative Agent in its capacity
as such;
Second, to payment of that portion of the Obligations constituting fees,
indemnities and other amounts (other than principal and interest) payable to the
Lenders (including Attorney Costs and amounts payable under Article III),
ratably among them in proportion to the amounts described in this clause Second
payable to them;
Third, to payment of that portion of the Obligations constituting accrued
and unpaid interest on the Loans and L/C Borrowings and Swap Contracts of the
Borrower to which a Lender or its Affiliate is a party, ratably among the
Lenders and such Affiliates in proportion to the respective amounts described in
this clause Third payable to them;
Fourth, to payment of that portion of the Obligations constituting unpaid
principal of the Loans and L/C Borrowings, ratably among the Lenders in
proportion to the respective amounts described in this clause Fourth held by
them;
Fifth, to the Administrative Agent for the account of the L/C Issuer, to
Cash Collateralize that portion of L/C Obligations comprised of the aggregate
undrawn amount of Letters of Credit; and
Last, the balance, if any, after all of the Obligations have been
indefeasibly paid in full, to the Borrower or as otherwise required by Law.
Subject to Section 2.03(c), amounts used to Cash Collateralize the aggregate
undrawn amount of Letters of Credit pursuant to clause Fifth above shall be
applied to satisfy drawings under such Letters of Credit as they occur. If any
amount remains on deposit as Cash Collateral after all Letters of Credit have
either been fully drawn or expired, such remaining amount shall be applied to
the other Obligations, if any, in the order set forth above.
ARTICLE IX. ADMINISTRATIVE AGENT
9.01 Appointment and Authorization of Administrative Agent.
(a) Each Lender hereby irrevocably appoints, designates and authorizes the
Administrative Agent to take such action on its behalf under the provisions of
this Agreement and each other Loan Document and to exercise such powers and
perform such duties as are expressly delegated to it by the terms of this
Agreement or any other Loan Document, together with such powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
contained elsewhere herein or in any other Loan Document, the Administrative
Agent shall not have any duties or responsibilities, except those expressly set
forth herein, nor shall the Administrative Agent have or be deemed to have any
fiduciary relationship with any Lender or participant, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or any other Loan Document or otherwise exist against the
Administrative Agent. Without limiting the generality of the foregoing sentence,
the use of the term "agent" herein and in the other Loan Documents with
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reference to the Administrative Agent is not intended to connote any fiduciary
or other implied (or express) obligations arising under agency doctrine of any
applicable Law. Instead, such term is used merely as a matter of market custom,
and is intended to create or reflect only an administrative relationship between
independent contracting parties.
(b) The L/C Issuer shall act on behalf of the Lenders with respect to any
Letters of Credit issued by it and the documents associated therewith, and the
L/C Issuer shall have all of the benefits and immunities (i) provided to the
Administrative Agent in this Article IX with respect to any acts taken or
omissions suffered by the L/C Issuer in connection with Letters of Credit issued
by it or proposed to be issued by it and the applications and agreements for
letters of credit pertaining to such Letters of Credit as fully as if the term
"Administrative Agent" as used in this Article IX and in the definition of
"Agent-Related Person" included the L/C Issuer with respect to such acts or
omissions, and (ii) as additionally provided herein with respect to the L/C
Issuer.
9.02 Delegation of Duties.
The Administrative Agent may execute any of its duties under this Agreement
or any other Loan Document by or through agents, employees or attorneys-in-fact
and shall be entitled to advice of counsel and other consultants or experts
concerning all matters pertaining to such duties. The Administrative Agent shall
not be responsible for the negligence or misconduct of any agent or
attorney-in-fact that it selects in the absence of gross negligence or willful
misconduct.
9.03 Liability of Administrative Agent.
No Agent-Related Person shall (a) be liable for any action taken or omitted
to be taken by any of them under or in connection with this Agreement or any
other Loan Document or the transactions contemplated hereby (except for its own
gross negligence or willful misconduct in connection with its duties expressly
set forth herein), or (b) be responsible in any manner to any Lender or
participant for any recital, statement, representation or warranty made by any
Loan Party or any officer thereof, contained herein or in any other Loan
Document, or in any certificate, report, statement or other document referred to
or provided for in, or received by the Administrative Agent under or in
connection with, this Agreement or any other Loan Document, or the validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Loan Document, or for any failure of any Loan Party or any other party
to any Loan Document to perform its obligations hereunder or thereunder. No
Agent-Related Person shall be under any obligation to any Lender or participant
to ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of any Loan Party or
any Affiliate thereof.
9.04 Reliance by Administrative Agent.
(a) The Administrative Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing, communication, signature, resolution,
representation, notice, consent, certificate, affidavit, letter, telegram,
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facsimile, telex or telephone message, electronic mail message, statement 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 counsel to any Loan Party),
independent accountants and other experts selected by the Administrative Agent.
The Administrative Agent shall be fully justified in failing or refusing to take
any action under any Loan Document unless it shall first receive such advice or
concurrence of the Required Lenders as it deems appropriate and, if it so
requests, it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Administrative Agent shall
in all cases be fully protected in acting, or in refraining from acting, under
this Agreement or any other Loan Document in accordance with a request or
consent of the Required Lenders (or such greater number of Lenders as may be
expressly required hereby in any instance) and such request and any action taken
or failure to act pursuant thereto shall be binding upon all the Lenders.
(b) For purposes of determining compliance with the conditions specified in
Section 4.01, each Lender that has signed this Agreement shall be deemed to have
consented to, approved or accepted or to be satisfied with, each document or
other matter required thereunder to be consented to or approved by or acceptable
or satisfactory to a Lender unless the Administrative Agent shall have received
notice from such Lender prior to the proposed Closing Date specifying its
objection thereto.
9.05 Notice of Default.
The Administrative Agent shall not be deemed to have knowledge or notice of
the occurrence of any Default, except with respect to defaults in the payment of
principal, interest and fees required to be paid to the Administrative Agent for
the account of the Lenders, unless the Administrative Agent shall have received
written notice from a Lender or the Borrower referring to this Agreement,
describing such Default and stating that such notice is a "notice of default."
The Administrative Agent will notify the Lenders of its receipt of any such
notice. The Administrative Agent shall take such action with respect to such
Default as may be directed by the Required Lenders in accordance with Article
VIII; provided, however, that unless and until the Administrative Agent has
received any such direction, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default as it shall deem advisable or in the best interest of the
Lenders.
9.06 Credit Decision; Disclosure of Information by Administrative Agent.
Each Lender acknowledges that no Agent-Related Person has made any
representation or warranty to it, and that no act by the Administrative Agent
hereafter taken, including any consent to and acceptance of any assignment or
review of the affairs of any Loan Party or any Affiliate thereof, shall be
deemed to constitute any representation or warranty by any Agent-Related Person
to any Lender as to any matter, including whether Agent-Related Persons have
disclosed material information in their possession. Each Lender represents to
the Administrative Agent that it has, independently and without reliance upon
any Agent-Related Person and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Loan Parties and their respective Subsidiaries, and all
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applicable bank or other regulatory Laws relating to the transactions
contemplated hereby, and made its own decision to enter into this Agreement and
to extend credit to the Borrower and the other Loan Parties hereunder. Each
Lender also represents that it will, independently and without reliance upon any
Agent-Related Person and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Loan Documents, and to make such investigations as it deems necessary
to inform itself as to the business, prospects, operations, property, financial
and other condition and creditworthiness of the Borrower and the other Loan
Parties. Except for notices, reports and other documents expressly required to
be furnished to the Lenders by the Administrative Agent herein, the
Administrative Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the business, prospects,
operations, property, financial and other condition or creditworthiness of any
of the Loan Parties or any of their respective Affiliates which may come into
the possession of any Agent-Related Person.
9.07 Indemnification of Administrative Agent.
Whether or not the transactions contemplated hereby are consummated, the
Lenders shall indemnify upon demand each Agent-Related Person (to the extent not
reimbursed by or on behalf of any Loan Party and without limiting the obligation
of any Loan Party to do so), pro rata, and hold harmless each Agent-Related
Person from and against any and all Indemnified Liabilities incurred by it;
provided, however, that no Lender shall be liable for the payment to any
Agent-Related Person of any portion of such Indemnified Liabilities to the
extent determined in a final, nonappealable judgment by a court of competent
jurisdiction to have resulted from such Agent-Related Person's own gross
negligence or willful misconduct; provided, however, that no action taken in
accordance with the directions of the Required Lenders shall be deemed to
constitute gross negligence or willful misconduct for purposes of this Section.
Without limitation of the foregoing, each Lender shall reimburse the
Administrative Agent upon demand for its ratable share of any costs or
out-of-pocket expenses (including Attorney Costs) incurred by the Administrative
Agent in connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Loan Document, or any document
contemplated by or referred to herein, to the extent that the Administrative
Agent is not reimbursed for such expenses by or on behalf of the Borrower. The
undertaking in this Section shall survive termination of the Aggregate
Commitments, the payment of all other Obligations and the resignation of the
Administrative Agent.
9.08 Administrative Agent in its Individual Capacity.
Bank of America and its Affiliates may make loans to, issue letters of
credit for the account of, accept deposits from, acquire equity interests in and
generally engage in any kind of banking, trust, financial advisory, underwriting
or other business with each of the Loan Parties and their respective Affiliates
as though Bank of America were not the Administrative Agent or the L/C Issuer
hereunder and without notice to or consent of the Lenders. The Lenders
acknowledge that, pursuant to such activities, Bank of America or its Affiliates
may receive information regarding any Loan Party or its Affiliates (including
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information that may be subject to confidentiality obligations in favor of such
Loan Party or such Affiliate) and acknowledge that the Administrative Agent
shall be under no obligation to provide such information to them. With respect
to its Loans, Bank of America shall have the same rights and powers under this
Agreement as any other Lender and may exercise such rights and powers as though
it were not the Administrative Agent or the L/C Issuer, and the terms "Lender"
and "Lenders" include Bank of America in its individual capacity.
9.09 Successor Administrative Agent.
The Administrative Agent may resign as Administrative Agent upon 30 days'
notice to the Lenders; provided that any such resignation by Bank of America
shall also constitute its resignation as L/C Issuer. If the Administrative Agent
resigns under this Agreement, the Required Lenders shall appoint from among the
Lenders a successor administrative agent for the Lenders, which successor
administrative agent shall be consented to by the Borrower at all times other
than during the existence of an Event of Default (which consent of the Borrower
shall not be unreasonably withheld or delayed). If no successor administrative
agent is appointed prior to the effective date of the resignation of the
Administrative Agent, the Administrative Agent may appoint, after consulting
with the Lenders and the Borrower, a successor administrative agent from among
the Lenders. Upon the acceptance of its appointment as successor administrative
agent hereunder, the Person acting as such successor administrative agent shall
succeed to all the rights, powers and duties of the retiring Administrative
Agent and L/C Issuer and the respective terms "Administrative Agent" and "L/C
Issuer" shall mean such successor administrative agent and Letter of Credit
issuer and the retiring Administrative Agent's appointment, powers and duties as
Administrative Agent shall be terminated and the retiring L/C Issuer's rights,
powers and duties as such shall be terminated, without any other or further act
or deed on the part of such retiring L/C Issuer or any other Lender, other than
the obligation of the successor L/C Issuer to issue letters of credit in
substitution for the Letters of Credit, if any, outstanding at the time of such
succession or to make other arrangements satisfactory to the retiring L/C Issuer
to effectively assume the obligations of the retiring L/C Issuer with respect to
such Letters of Credit. After any retiring Administrative Agent's resignation
hereunder as Administrative Agent, the provisions of this Article IX and
Sections 10.04 and 10.05 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 no successor administrative agent has accepted appointment as
Administrative Agent by the date which is 30 days following a retiring
Administrative Agent's notice of resignation, the retiring Administrative
Agent's resignation shall nevertheless thereupon become effective and the
Lenders shall perform all of the duties of the Administrative Agent hereunder
until such time, if any, as the Required Lenders appoint a successor agent as
provided for above.
9.10 Administrative Agent May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to any Loan Party, the Administrative Agent
(irrespective of whether the principal of any Loan or L/C Obligation shall then
be due and payable as herein expressed or by declaration or otherwise and
irrespective of whether the Administrative Agent shall have made any demand on
the Borrower) shall be entitled and empowered, by intervention in such
proceeding or otherwise
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(a) to file and prove a claim for the whole amount of the principal
and interest owing and unpaid in respect of the Loans, L/C Obligations and
all other Obligations that are owing and unpaid and to file such other
documents as may be necessary or advisable in order to have the claims of
the Lenders and the Administrative Agent (including any claim for the
reasonable compensation, expenses, disbursements and advances of the
Lenders and the Administrative Agent and their respective agents and
counsel and all other amounts due the Lenders and the Administrative Agent
under Sections 2.03(i) and (j), 2.09 and 10.04) allowed in such judicial
proceeding; and
(b) to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to the Administrative Agent and, in the event
that the Administrative Agent shall consent to the making of such payments
directly to the Lenders, to pay to the Administrative Agent any amount due for
the reasonable compensation, expenses, disbursements and advances of the
Administrative Agent and its agents and counsel, and any other amounts due the
Administrative Agent under Sections 2.09 and 10.04.
Nothing contained herein shall be deemed to authorize the Administrative
Agent to authorize or consent to or accept or adopt on behalf of any Lender any
plan of reorganization, arrangement, adjustment or composition affecting the
Obligations or the rights of any Lender or to authorize the Administrative Agent
to vote in respect of the claim of any Lender in any such proceeding.
9.11 Guaranty Matters.
The Lenders irrevocably authorize the Administrative Agent, at its option
and in its discretion, to release any Guarantor from its obligations under the
Guaranty if such Person ceases to be a Required Guarantor as a result of a
transaction permitted hereunder.
Upon request by the Administrative Agent at any time, the Required Lenders
will confirm in writing the Administrative Agent's authority to release any
Guarantor from its obligations under the Guaranty pursuant to this Section 9.11.
9.12 Other Agents; Arrangers and Managers.
None of the Lenders or other Persons identified on the facing page or
signature pages of this Agreement as a "syndication agent," "documentation
agent," "co-agent," "book manager," "lead manager," "arranger," "lead arranger"
or "co-arranger" shall have any right, power, obligation, liability,
responsibility or duty under this Agreement other than, in the case of such
Lenders, those applicable to all Lenders as such. Without limiting the
foregoing, none of the Lenders or other Persons so identified shall have or be
deemed to have any fiduciary relationship with any Lender. Each Lender
acknowledges that it has not relied, and will not rely, on any of the Lenders or
other Persons so identified in deciding to enter into this Agreement or in
taking or not taking action hereunder.
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ARTICLE X.
MISCELLANEOUS
10.01 Amendments, Etc.
No amendment or waiver of any provision of this Agreement or any other Loan
Document, and no consent to any departure by the Borrower or any other Loan
Party therefrom, shall be effective unless in writing signed by the Required
Lenders and the Borrower or the applicable Loan Party, as the case may be, and
acknowledged by the Administrative Agent, and each such waiver or consent shall
be effective only in the specific instance and for the specific purpose for
which given; provided, however, that no such amendment, waiver or consent shall:
(a) waive any condition set forth in Section 4.01(a) without the written
consent of each Lender;
(b) extend or increase the Commitment of any Lender (or reinstate any
Commitment terminated pursuant to Section 8.02) without the written consent of
such Lender;
(c) postpone any date fixed by this Agreement or any other Loan Document
for any payment or mandatory prepayment of principal, interest, fees or other
amounts due to the Lenders (or any of them) or any scheduled or mandatory
reduction of the Aggregate Commitments hereunder or under any other Loan
Document without the written consent of each Lender directly affected thereby;
(d) reduce the principal of, or the rate of interest specified herein on,
any Loan or L/C Borrowing, or (subject to clause (iii) of the second proviso to
this Section 10.01) any fees or other amounts payable hereunder or under any
other Loan Document, or change the manner of computation of any financial ratio
(including any change in any applicable defined term) used in determining the
Applicable Rate that would result in a reduction of any interest rate on any
Loan or any fee payable hereunder without the written consent of each Lender
directly affected thereby; provided, however, that only the consent of the
Required Lenders shall be necessary to (i) amend the definition of "Default
Rate", (ii) waive any obligation of the Borrower to pay interest at the Default
Rate, or (iii) amend a financial ratio or requirement as described in Section
1.03(b);
(e) change Section 2.13 or Section 8.03 in a manner that would alter the
pro rata sharing of payments required thereby without the written consent of
each Lender;
(f) change any provision of this Section or the definition of "Required
Lenders" or any other provision hereof specifying the number or percentage of
Lenders required to amend, waive or otherwise modify any rights hereunder or
make any determination or grant any consent hereunder, without the written
consent of each Lender; or
(g) release any Guarantor from the Guaranty without the written consent of
each Lender, except as permitted under Section 9.11(a);
and, provided further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the L/C Issuer in addition to the Lenders required above,
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affect the rights or duties of the L/C Issuer under this Agreement or any Letter
of Credit Application relating to any Letter of Credit issued or to be issued by
it; (ii) no amendment, waiver or consent shall, unless in writing and signed by
the Administrative Agent in addition to the Lenders required above, affect the
rights or duties of the Administrative Agent under this Agreement or any other
Loan Document; and (iii) the Fee Letter may be amended, or rights or privileges
thereunder waived, in a writing executed only by the parties thereto.
Notwithstanding anything to the contrary herein, no Defaulting Lender shall have
any right to approve or disapprove any amendment, waiver or consent hereunder,
except that the Commitment of such Lender may not be increased or extended
without the consent of such Lender.
10.02 Notices and Other Communications; Facsimile Copies.
(a) General. Unless otherwise expressly provided herein, all notices and
other communications provided for hereunder shall be in writing (including by
facsimile transmission). All such written notices shall be mailed, faxed or
delivered to the applicable address, facsimile number or (subject to subsection
(c) below) electronic mail address, and all notices and other communications
expressly permitted hereunder to be given by telephone shall be made to the
applicable telephone number, as follows:
(i) if to the Borrower, CEC Entertainment, the Administrative Agent,
the L/C Issuer, to the address, facsimile number, electronic mail address
or telephone number specified for such Person on Schedule 10.02 or to such
other address, facsimile number, electronic mail address or telephone
number as shall be designated by such party in a notice to the other
parties; and
(ii) if to any other Lender, to the address, facsimile number,
electronic mail address or telephone number specified in its Administrative
Questionnaire or to such other address, facsimile number, electronic mail
address or telephone number as shall be designated by such party in a
notice to the Borrower, CEC Entertainment, the Administrative Agent and the
L/C Issuer.
All such notices and other communications shall be deemed to be given or made
upon the earlier to occur of (i) actual receipt by the relevant party hereto and
(ii) (A) if delivered by hand or by courier, when signed for by or on behalf of
the relevant party hereto; (B) if delivered by mail, four Business Days after
deposit in the mails, postage prepaid; (C) if delivered by facsimile, when sent
and receipt has been confirmed by telephone; and (D) if delivered by electronic
mail (which form of delivery is subject to the provisions of subsection (c)
below), when delivered; provided, however, that notices and other communications
to the Administrative Agent and the L/C Issuer pursuant to Article II shall not
be effective until actually received by such Person. In no event shall a
voicemail message be effective as a notice, communication or confirmation
hereunder.
(b) Effectiveness of Facsimile Documents and Signatures. Loan Documents may
be transmitted and/or signed by facsimile. The effectiveness of any such
documents and signatures shall, subject to applicable Law, have the same force
and effect as manually-signed originals and shall be binding on all Loan
Parties, the Administrative Agent and the Lenders. The Administrative Agent may
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also require that any such documents and signatures be confirmed by a
manually-signed original thereof; provided, however, that the failure to request
or deliver the same shall not limit the effectiveness of any facsimile document
or signature.
(c) Limited Use of Electronic Mail. Electronic mail and Internet and
intranet websites may be used only to distribute routine communications, such as
financial statements and other information as provided in Section 6.02, and to
distribute Loan Documents for execution by the parties thereto, and may not be
used for any other purpose.
(d) Reliance by Administrative Agent and Lenders. The Administrative Agent
and the Lenders shall be entitled to rely and act upon any notices (including
telephonic Committed Loan Notices) purportedly given by or on behalf of the
Borrower even if (i) such notices were not made in a manner specified herein,
were incomplete or were not preceded or followed by any other form of notice
specified herein, or (ii) the terms thereof, as understood by the recipient,
varied from any confirmation thereof. The Borrower shall indemnify each
Agent-Related Person and each Lender from all losses, costs, expenses and
liabilities resulting from the reliance by such Person on each notice
purportedly given by or on behalf of the Borrower. All telephonic notices to and
other communications with the Administrative Agent may be recorded by the
Administrative Agent, and each of the parties hereto hereby consents to such
recording.
10.03 No Waiver; Cumulative Remedies.
No failure by any Lender or the Administrative Agent to exercise, and no
delay by any such Person in exercising, any right, remedy, power or privilege
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law. The Borrower shall not be deemed to have waived any right,
remedy, power or privilege unless such waiver is in writing.
10.04 Attorney Costs, Expenses and Taxes.
The Borrower agrees (a) to pay or reimburse the Administrative Agent for
all reasonable costs and expenses incurred in connection with the development,
preparation, negotiation and execution of this Agreement and the other Loan
Documents and any amendment, waiver, consent or other modification of the
provisions hereof and thereof (whether or not the transactions contemplated
hereby or thereby are consummated), and the consummation and administration of
the transactions contemplated hereby and thereby, including all Attorney Costs,
and (b) to pay or reimburse the Administrative Agent and each Lender for all
costs and expenses incurred in connection with the enforcement, attempted
enforcement, or preservation of any rights or remedies under this Agreement or
the other Loan Documents (including all such costs and expenses incurred during
any "workout" or restructuring in respect of the Obligations and during any
legal proceeding, including any proceeding under any Debtor Relief Law),
including all Attorney Costs. The foregoing costs and expenses shall include all
search, filing, recording, title insurance and appraisal charges and fees and
taxes related thereto, and other out-of-pocket expenses incurred by the
Administrative Agent and the cost of independent public accountants and other
outside experts retained by the Administrative Agent or any Lender. All amounts
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due under this Section 10.04 shall be payable within ten Business Days after
demand therefor. The agreements in this Section shall survive the termination of
the Aggregate Commitments and repayment of all other Obligations.
10.05 Indemnification by the Borrower.
Whether or not the transactions contemplated hereby are consummated, the
Borrower shall indemnify and hold harmless each Agent-Related Person, each
Lender and their respective Affiliates, directors, officers, employees, counsel,
agents and attorneys-in-fact (collectively the "Indemnitees") from and against
any and all liabilities, obligations, losses, damages, penalties, claims,
demands, actions, judgments, suits, costs, expenses and disbursements (including
Attorney Costs) of any kind or nature whatsoever which may at any time be
imposed on, incurred by or asserted against any such Indemnitee in any way
relating to or arising out of or in connection with (a) the execution, delivery,
enforcement, performance or administration of any Loan Document or any other
agreement, letter or instrument delivered in connection with the transactions
contemplated thereby or the consummation of the transactions contemplated
thereby, (b) any Commitment, Loan or Letter of Credit or the use or proposed use
of the proceeds therefrom (including any refusal by the L/C Issuer to honor a
demand for payment under a Letter of Credit if the documents presented in
connection with such demand do not strictly comply with the terms of such Letter
of Credit), (c) any actual or alleged presence or release of Hazardous Materials
on or from any property currently or formerly owned or operated by the Borrower,
any Subsidiary or any other Loan Party, or any Environmental Liability related
in any way to the Borrower, any Subsidiary or any other Loan Party, or (d) any
actual or prospective claim, litigation, investigation or proceeding relating to
any of the foregoing, whether based on contract, tort or any other theory
(including any investigation of, preparation for, or defense of any pending or
threatened claim, investigation, litigation or proceeding) and regardless of
whether any Indemnitee is a party thereto (all the foregoing, collectively, the
"Indemnified Liabilities"), in all cases, whether or not caused by or arising,
in whole or in part, out of the negligence of the Indemnitee; provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
liabilities, obligations, losses, damages, penalties, claims, demands, actions,
judgments, suits, costs, expenses or disbursements are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted from
the gross negligence or willful misconduct of such Indemnitee. No Indemnitee
shall be liable for any damages arising from the use by others of any
information or other materials obtained through IntraLinks or other similar
information transmission systems in connection with this Agreement, nor shall
any Indemnitee have any liability for any indirect or consequential damages
relating to this Agreement or any other Loan Document or arising out of its
activities in connection herewith or therewith (whether before or after the
Closing Date). All amounts due under this Section 10.05 shall be payable within
ten Business Days after demand therefor. The agreements in this Section shall
survive the resignation of the Administrative Agent, the replacement of any
Lender, the termination of the Aggregate Commitments and the repayment,
satisfaction or discharge of all the other Obligations.
10.06 Payments Set Aside.
To the extent that any payment by or on behalf of the Borrower is made to
the Administrative Agent or any Lender, or the Administrative Agent or any
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Lender exercises its right of set-off, and such payment or the proceeds of such
set-off or any part thereof is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required (including pursuant to any
settlement entered into by the Administrative Agent or such Lender in its
discretion) to be repaid to a trustee, receiver or any other party, in
connection with any proceeding under any Debtor Relief Law or otherwise, then
(a) to the extent of such recovery, the obligation or part thereof originally
intended to be satisfied shall be revived and continued in full force and effect
as if such payment had not been made or such set-off had not occurred, and (b)
each Lender severally agrees to pay to the Administrative Agent upon demand its
applicable share of any amount so recovered from or repaid by the Administrative
Agent, plus interest thereon from the date of such demand to the date such
payment is made at a rate per annum equal to the Federal Funds Rate from time to
time in effect.
10.07 Successors and Assigns.
(a) The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns
permitted hereby, except that the Borrower may not assign or otherwise transfer
any of its rights or obligations hereunder without the prior written consent of
each Lender and no Lender may assign or otherwise transfer any of its rights or
obligations hereunder except (i) to an Eligible Assignee in accordance with the
provisions of subsection (b) of this Section, (ii) by way of participation in
accordance with the provisions of subsection (d) of this Section, or (iii) by
way of pledge or assignment of a security interest subject to the restrictions
of subsection (f) of this Section (and any other attempted assignment or
transfer by any party hereto shall be null and void). Nothing in this Agreement,
expressed or implied, shall be construed to confer upon any Person (other than
the parties hereto, their respective successors and assigns permitted hereby,
Participants to the extent provided in subsection (d) of this Section and, to
the extent expressly contemplated hereby, the Indemnitees) any legal or
equitable right, remedy or claim under or by reason of this Agreement.
(b) Any Lender may at any time assign to one or more Eligible Assignees all
or a portion of its rights and obligations under this Agreement (including all
or a portion of its Commitment and the Loans (including for purposes of this
subsection (b), participations in L/C Obligations) at the time owing to it);
provided that (i) except in the case of an assignment of the entire remaining
amount of the assigning Lender's Commitment and the Loans at the time owing to
it or in the case of an assignment to a Lender or an Affiliate of a Lender or an
Approved Fund (as defined in subsection (g) of this Section) with respect to a
Lender, the aggregate amount of the Commitment (which for this purpose includes
Loans outstanding thereunder) subject to each such assignment, determined as of
the date the Assignment and Assumption with respect to such assignment is
delivered to the Administrative Agent or, if "Trade Date" is specified in the
Assignment and Assumption, as of the Trade Date, shall not be less than
$5,000,000 unless each of the Administrative Agent and, so long as no Event of
Default has occurred and is continuing, the Borrower otherwise consents (each
such consent not to be unreasonably withheld or delayed); (ii) each partial
assignment shall be made as an assignment of a proportionate part of all the
assigning Lender's rights and obligations under this Agreement with respect to
the Loans or the Commitment assigned; (iii) any assignment of a Commitment must
be approved by the Administrative Agent and the L/C Issuer unless the Person
that is the proposed assignee is itself a Lender (whether or not the proposed
assignee would otherwise qualify as an Eligible Assignee); and (iv) the parties
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to each assignment shall execute and deliver to the Administrative Agent an
Assignment and Assumption, together with a processing and recordation fee of
$3,500. Subject to acceptance and recording thereof by the Administrative Agent
pursuant to subsection (c) of this Section, from and after the effective date
specified in each Assignment and Assumption, the Eligible Assignee thereunder
shall be a party to this Agreement and, to the extent of the interest assigned
by such Assignment and Assumption, have the rights and obligations of a Lender
under this Agreement, and the assigning Lender thereunder shall, to the extent
of the interest assigned by such Assignment and Assumption, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party hereto but shall continue
to be entitled to the benefits of Sections 3.01, 3.04, 3.05, 10.04 and 10.05
with respect to facts and circumstances occurring prior to the effective date of
such assignment). Upon request, the Borrower (at its expense) shall execute and
deliver a Note to the assignee Lender. Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this
subsection shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
subsection (d) of this Section.
(c) The Administrative Agent, acting solely for this purpose as an agent of
the Borrower, shall maintain at the Administrative Agent's Office a copy of each
Assignment and Assumption delivered to it and a register for the recordation of
the names and addresses of the Lenders, and the Commitments of, and principal
amounts of the Loans and L/C Obligations owing to, each Lender pursuant to the
terms hereof from time to time (the "Register"). The entries in the Register
shall be conclusive, and the Borrower, the Administrative Agent and the Lenders
may treat each Person whose name is recorded in the Register pursuant to the
terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. The Register shall be available for
inspection by the Borrower and any Lender, at any reasonable time and from time
to time upon reasonable prior notice.
(d) Any Lender may at any time, without the consent of, or notice to, the
Borrower or the Administrative Agent, sell participations to any Person (other
than a natural person or the Borrower or CEC Entertainment or any of CEC
Entertainment's Affiliates or Subsidiaries) (each, a "Participant") in all or a
portion of such Lender's rights and/or obligations under this Agreement
(including all or a portion of its Commitment and/or the Loans (including such
Lender's participations in L/C Obligations) owing to it); provided that (i) such
Lender's obligations under this Agreement shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations and (iii) the Borrower, the Administrative Agent
and the other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under this
Agreement. Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, waiver or other modification described in the first proviso to
Section 10.01 that directly affects such Participant. Subject to subsection (e)
of this Section, the Borrower agrees that each Participant shall be entitled to
the benefits of Sections 3.01, 3.04 and 3.05 to the same extent as if it were a
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Lender and had acquired its interest by assignment pursuant to subsection (b) of
this Section. To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 10.09 as though it were a Lender, provided
such Participant agrees to be subject to Section 2.13 as though it were a
Lender.
(e) A Participant shall not be entitled to receive any greater payment
under Section 3.01 or 3.04 than the applicable Lender would have been entitled
to receive with respect to the participation sold to such Participant, unless
the sale of the participation to such Participant is made with the Borrower's
prior written consent. A Participant that would be a Foreign Lender if it were a
Lender shall not be entitled to the benefits of Section 3.01 unless the Borrower
is notified of the participation sold to such Participant and such Participant
agrees, for the benefit of the Borrower, to comply with Section 10.15 as though
it were a Lender.
(f) Any Lender may at any time pledge or assign a security interest in all
or any portion of its rights under this Agreement (including under its Note, if
any) to secure obligations of such Lender, including any pledge or assignment to
secure obligations to a Federal Reserve Bank; provided that no such pledge or
assignment shall release such Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.
(g) As used herein, the following terms have the following meanings:
"Eligible Assignee" means (a) a Lender; (b) an Affiliate of a Lender;
(c) an Approved Fund; and (d) any other Person (other than a natural
person) approved by (i) the Administrative Agent and the L/C Issuer, and
(ii) unless an Event of Default has occurred and is continuing, the
Borrower (each such approval not to be unreasonably withheld or delayed);
provided that notwithstanding the foregoing, "Eligible Assignee" shall not
include the Borrower, CEC Entertainment or any of CEC Entertainment's
Affiliates or Subsidiaries.
"Fund" means any Person (other than a natural person) that is (or will
be) engaged in making, purchasing, holding or otherwise investing in
commercial loans and similar extensions of credit in the ordinary course of
its business.
"Approved Fund" means any Fund that is administered or managed by (a)
a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of
an entity that administers or manages a Lender.
(h) Notwithstanding anything to the contrary contained herein, if at any
time Bank of America assigns all of its Commitment and Loans pursuant to
subsection (b) above, Bank of America may, upon 30 days' notice to the Borrower
and the Lenders, resign as L/C Issuer. In the event of such resignation as L/C
Issuer, the Borrower shall be entitled to appoint from among the Lenders a
successor L/C Issuer hereunder; provided, however, that no failure by the
Borrower to appoint any such successor shall affect the resignation of Bank of
America as L/C Issuer. If Bank of America resigns as L/C Issuer, it shall retain
all the rights and obligations of the L/C Issuer hereunder with respect to all
Letters of Credit outstanding as of the effective date of its resignation as L/C
Issuer and all L/C Obligations with respect thereto (including the right to
require the Lenders to make Base Rate Committed Loans or fund risk
participations in Unreimbursed Amounts pursuant to Section 2.03(c)).
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10.08 Confidentiality.
Each of the Administrative Agent and the Lenders agrees to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its and its Affiliates' directors, officers, employees
and agents, including accountants, legal counsel and other advisors (it being
understood that the Persons to whom such disclosure is made will be informed of
the confidential nature of such Information and instructed to keep such
Information confidential); (b) to the extent requested by any regulatory
authority; (c) to the extent required by applicable laws or regulations or by
any subpoena or similar legal process; (d) to any other party to this Agreement;
(e) in connection with the exercise of any remedies hereunder or any suit,
action or proceeding relating to this Agreement or the enforcement of rights
hereunder; (f) subject to an agreement containing provisions substantially the
same as those of this Section, to (i) any Eligible Assignee of or Participant
in, or any prospective Eligible Assignee of or Participant in, any of its rights
or obligations under this Agreement or (ii) any direct or indirect contractual
counterparty or prospective counterparty (or such contractual counterparty's or
prospective counterparty's professional advisor) to any credit derivative
transaction relating to obligations of the Loan Parties; (g) with the consent of
the Borrower; (h) to the extent such Information (i) becomes publicly available
other than as a result of a breach of this Section or (ii) becomes available to
the Administrative Agent or any Lender on a nonconfidential basis from a source
other than the Borrower; or (i) to the National Association of Insurance
Commissioners or any other similar organization. In addition, the Administrative
Agent and the Lenders may disclose the existence of this Agreement and
information about this Agreement to market data collectors, similar service
providers to the lending industry, and service providers to the Administrative
Agent and the Lenders in connection with the administration and management of
this Agreement, the other Loan Documents, the Commitments, and the Credit
Extensions. For the purposes of this Section, "Information" means all
information received from any Loan Party relating to any Loan Party or its
business, other than any such information that is available to the
Administrative Agent or any Lender on a nonconfidential basis prior to
disclosure by any Loan Party; provided that, in the case of information received
from a Loan Party after the date hereof, such information is clearly identified
in writing at the time of delivery as confidential. Any Person required to
maintain the confidentiality of Information as provided in this Section shall be
considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.
10.09 Set-off.
In addition to any rights and remedies of the Lenders provided by law, upon
the occurrence and during the continuance of any Event of Default, each Lender
is authorized at any time and from time to time, without prior notice to the
Borrower or any other Loan Party, any such notice being waived by the Borrower
(on its own behalf and on behalf of each Loan Party) to the fullest extent
permitted by law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held by, and other
indebtedness at any time owing by, such Lender to or for the credit or the
account of the respective Loan Parties against any and all Obligations owing to
such Lender hereunder or under any other Loan Document, now or hereafter
existing, irrespective of whether or not the Administrative Agent or such Lender
shall have made demand under this Agreement or any other Loan Document and
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although such Obligations may be contingent or unmatured or denominated in a
currency different from that of the applicable deposit or indebtedness. Each
Lender agrees promptly to notify the Borrower and the Administrative Agent after
any such set-off and application made by such Lender; provided, however, that
the failure to give such notice shall not affect the validity of such set-off
and application.
10.10 Interest Rate Limitation.
Notwithstanding anything to the contrary contained in any Loan Document,
the interest paid or agreed to be paid under the Loan Documents shall not exceed
the maximum rate of non-usurious interest permitted by applicable Law (the
"Maximum Rate"). This Agreement has been executed under, and shall be construed
and enforced in accordance with, the laws of the State of Texas, except as such
laws are preempted by federal law. To the extent that the Administrative Agent
or a Lender is relying on Chapter 303 of the Texas Finance Code to determine the
Maximum Rate payable on the Obligations, such Person will utilize the weekly
ceiling from time to time in effect as provided in such Chapter 303. To the
extent federal law permits the Administrative Agent or a Lender to contract for,
charge or receive a greater amount of interest, such Person will rely on federal
law instead of such article, as amended, for the purpose of determining the
Maximum Rate. In no event shall the provisions of Chapter 346 of the Texas
Finance Code (which regulates certain revolving credit loan accounts and
revolving triparty accounts) apply to the Obligations. If the Administrative
Agent or any Lender shall receive interest in an amount that exceeds the Maximum
Rate, the excess interest shall be applied to the principal of the Loans or, if
it exceeds such unpaid principal, refunded to the Borrower. In determining
whether the interest contracted for, charged, or received by the Administrative
Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent
permitted by applicable Law, (a) characterize any payment that is not principal
as an expense, fee, or premium rather than interest, (b) exclude voluntary
prepayments and the effects thereof, and (c) amortize, prorate, allocate, and
spread in equal or unequal parts the total amount of interest throughout the
contemplated term of the Obligations hereunder.
10.11 Counterparts.
This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
10.12 Integration.
This Agreement, together with the other Loan Documents, comprises the
complete and integrated agreement of the parties on the subject matter hereof
and thereof and supersedes all prior agreements, written or oral, on such
subject matter. In the event of any conflict between the provisions of this
Agreement and those of any other Loan Document, the provisions of this Agreement
shall control; provided that the inclusion of supplemental rights or remedies in
favor of the Administrative Agent or the Lenders in any other Loan Document
shall not be deemed a conflict with this Agreement. Each Loan Document was
drafted with the joint participation of the respective parties thereto and shall
be construed neither against nor in favor of any party, but rather in accordance
with the fair meaning thereof.
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10.13 Survival of Representations and Warranties.
All representations and warranties made hereunder and in any other Loan
Document or other document delivered pursuant hereto or thereto or in connection
herewith or therewith shall survive the execution and delivery hereof and
thereof. Such representations and warranties have been or will be relied upon by
the Administrative Agent and each Lender, regardless of any investigation made
by the Administrative Agent or any Lender or on their behalf and notwithstanding
that the Administrative Agent or any Lender may have had notice or knowledge of
any Default at the time of any Credit Extension, and shall continue in full
force and effect as long as any Loan or any other Obligation hereunder shall
remain unpaid or unsatisfied or any Letter of Credit shall remain outstanding.
10.14 Severability.
If any provision of this Agreement or the other Loan Documents is held to
be illegal, invalid or unenforceable, (a) the legality, validity and
enforceability of the remaining provisions of this Agreement and the other Loan
Documents shall not be affected or impaired thereby and (b) the parties shall
endeavor in good faith negotiations to replace the illegal, invalid or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the illegal, invalid or unenforceable
provisions. The invalidity of a provision in a particular jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.
10.15 Tax Forms.
(a) (i) Each Lender that is not a "United States person" within the meaning
of Section 7701(a)(30) of the Code (a "Foreign Lender") shall deliver to the
Administrative Agent, prior to receipt of any payment subject to withholding
under the Code (or upon accepting an assignment of an interest herein), two duly
signed completed copies of either IRS Form W-8BEN or any successor thereto
(relating to such Foreign Lender and entitling it to an exemption from, or
reduction of, withholding tax on all payments to be made to such Foreign Lender
by the Borrower pursuant to this Agreement) or IRS Form W-8ECI or any successor
thereto (relating to all payments to be made to such Foreign Lender by the
Borrower pursuant to this Agreement) or such other evidence satisfactory to the
Borrower and the Administrative Agent that such Foreign Lender is entitled to an
exemption from, or reduction of, U.S. withholding tax, including any exemption
pursuant to Section 881(c) of the Code. Thereafter and from time to time, each
such Foreign Lender shall (A) promptly submit to the Administrative Agent such
additional duly completed and signed copies of one of such forms (or such
successor forms as shall be adopted from time to time by the relevant United
States taxing authorities) as may then be available under then current United
States laws and regulations to avoid, or such evidence as is satisfactory to the
Borrower and the Administrative Agent of any available exemption from or
reduction of, United States withholding taxes in respect of all payments to be
made to such Foreign Lender by the Borrower pursuant to this Agreement, (B)
promptly notify the Administrative Agent of any change in circumstances which
would modify or render invalid any claimed exemption or reduction, and (C) take
such steps as shall not be materially disadvantageous to it, in the reasonable
judgment of such Lender, and as may be reasonably necessary (including the
re-designation of its Lending Office) to avoid any requirement of applicable
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Laws that the Borrower make any deduction or withholding for taxes from amounts
payable to such Foreign Lender.
(ii) Each Foreign Lender, to the extent it does not act or ceases to act
for its own account with respect to any portion of any sums paid or payable to
such Lender under any of the Loan Documents (for example, in the case of a
typical participation by such Lender), shall deliver to the Administrative Agent
on the date when such Foreign Lender ceases to act for its own account with
respect to any portion of any such sums paid or payable, and at such other times
as may be necessary in the determination of the Administrative Agent (in the
reasonable exercise of its discretion), (A) two duly signed completed copies of
the forms or statements required to be provided by such Lender as set forth
above, to establish the portion of any such sums paid or payable with respect to
which such Lender acts for its own account that is not subject to U.S.
withholding tax, and (B) two duly signed completed copies of IRS Form W-8IMY (or
any successor thereto), together with any information such Lender chooses to
transmit with such form, and any other certificate or statement of exemption
required under the Code, to establish that such Lender is not acting for its own
account with respect to a portion of any such sums payable to such Lender.
(iii) The Borrower shall not be required to pay any additional amount to
any Foreign Lender under Section 3.01 (A) with respect to any Taxes required to
be deducted or withheld on the basis of the information, certificates or
statements of exemption such Lender transmits with an IRS Form W-8IMY pursuant
to this Section 10.15(a) or (B) if such Lender shall have failed to satisfy the
foregoing provisions of this Section 10.15(a); provided that if such Lender
shall have satisfied the requirement of this Section 10.15(a) on the date such
Lender became a Lender or ceased to act for its own account with respect to any
payment under any of the Loan Documents, nothing in this Section 10.15(a) shall
relieve the Borrower of its obligation to pay any amounts pursuant to Section
3.01 in the event that, as a result of any change in any applicable law, treaty
or governmental rule, regulation or order, or any change in the interpretation,
administration or application thereof, such Lender is no longer properly
entitled to deliver forms, certificates or other evidence at a subsequent date
establishing the fact that such Lender or other Person for the account of which
such Lender receives any sums payable under any of the Loan Documents is not
subject to withholding or is subject to withholding at a reduced rate.
(iv) The Administrative Agent may, without reduction, withhold any Taxes
required to be deducted and withheld from any payment under any of the Loan
Documents with respect to which the Borrower is not required to pay additional
amounts under this Section 10.15(a).
(b) Upon the request of the Administrative Agent, each Lender that is a
"United States person" within the meaning of Section 7701(a)(30) of the Code
shall deliver to the Administrative Agent two duly signed completed copies of
IRS Form W-9. If such Lender fails to deliver such forms, then the
Administrative Agent may withhold from any interest payment to such Lender an
amount equivalent to the applicable back-up withholding tax imposed by the Code,
without reduction.
(c) If any Governmental Authority asserts that the Administrative Agent did
not properly withhold or backup withhold, as the case may be, any tax or other
amount from payments made to or for the account of any Lender, such Lender shall
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indemnify the Administrative Agent therefor, including all penalties and
interest, any taxes imposed by any jurisdiction on the amounts payable to the
Administrative Agent under this Section, and costs and expenses (including
Attorney Costs) of the Administrative Agent. The obligation of the Lenders under
this Section shall survive the termination of the Aggregate Commitments,
repayment of all other Obligations hereunder and the resignation of the
Administrative Agent.
10.16 Replacement of Lenders.
(a) Under any circumstances set forth herein providing that the Borrower
shall have the right to remove, replace or add a Lender as a party to this
Agreement, the Borrower may, upon notice to such Lender and the Administrative
Agent, (i) remove such Lender by terminating such Lender's Commitment, (ii)
replace such Lender by requesting such Lender to assign its Commitment (which
such Lender agrees to accomplish and with the assignment fee to be paid by the
Borrower in such instance) pursuant to Section 10.07(b) to one or more other
Lenders or Eligible Assignees procured by the Borrower; provided, however, that
if the Borrower elects to exercise such right with respect to any Lender
pursuant to Section 3.06(b), it shall be obligated to remove or replace all
Lenders that have made similar requests for compensation pursuant to Section
3.01 or Section 3.04, or (iii) add a Lender as provided in Section 2.15. If the
Borrower removes such Lender without replacement, the Borrower shall (x) pay in
full all principal, interest, fees and other amounts accrued or owing to such
Lender being removed through the date of removal (including any amounts payable
pursuant to Section 3.05), provided that the making of such payment shall not
preclude any claim by such Lender for amounts which shall become due to it
thereafter in accordance with the terms of the Loan Documents, (y) provide
appropriate assurances and indemnities (which may include letters of credit) to
the L/C Issuer as such may reasonably require with respect to any continuing
obligation to purchase participation interests in any L/C Obligations then
outstanding, and (z) release such Lender from its obligations under the Loan
Documents. Any Lender being replaced shall execute and deliver an Assignment and
Assumption substantially in the form of Exhibit E with respect to such Lender's
Commitment and outstanding Loans and participations in L/C Obligations, whereby
the Lender being replaced irrevocably sells and assigns to the Assignee such
Lender's Commitment and outstanding Loans and participations in L/C Obligations.
The Administrative Agent shall distribute an amended Schedule 2.01, which shall
be deemed incorporated into this Agreement, to reflect changes in the identities
of the Lenders and adjustments of their respective Commitments and/or Pro Rata
Shares resulting from such removal, replacement or addition.
(b) In order to make all the Lenders' interest in any outstanding Committed
Loans ratable in accordance with any revised Pro Rata Shares after giving effect
to the removal, replacement or addition of a Lender, the Borrower shall pay or
prepay, if necessary, on the effective date thereof, all outstanding Loans of
all Lenders, together with any amounts due under Section 3.05. The Borrower may
then request Loans from the Lenders in accordance with their revised Pro Rata
Shares. The Borrower may net any payments required hereunder against any funds
being provided by any Lender or New Lender replacing a terminating Lender. The
effect for purposes of this Agreement shall be the same as if separate transfers
of funds had been made with respect thereto.
(c) This Section shall supercede any provision in Section 10.01 to the
contrary.
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10.17 GOVERNING LAW.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAW OF THE STATE OF TEXAS APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED
ENTIRELY WITHIN SUCH STATE; PROVIDED THAT THE ADMINISTRATIVE AGENT AND EACH
LENDER SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
(b) THIS AGREEMENT IS PERFORMABLE IN DALLAS COUNTY, TEXAS. ANY LEGAL ACTION
OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE
BROUGHT IN THE COURTS OF THE STATE OF TEXAS SITTING IN DALLAS COUNTY OR OF THE
UNITED STATES FOR THE NORTHERN DISTRICT OF SUCH STATE, AND BY EXECUTION AND
DELIVERY OF THIS AGREEMENT, THE BORROWER, CEC ENTERTAINMENT, THE ADMINISTRATIVE
AGENT AND EACH LENDER CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO
THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. THE BORROWER, CEC ENTERTAINMENT,
THE ADMINISTRATIVE AGENT AND EACH LENDER IRREVOCABLY WAIVES ANY OBJECTION,
INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM
NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION
OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF ANY LOAN DOCUMENT OR OTHER
DOCUMENT RELATED THERETO. THE BORROWER, CEC ENTERTAINMENT, THE ADMINISTRATIVE
AGENT AND EACH LENDER WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER
PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH
STATE.
10.18 WAIVER OF RIGHT TO TRIAL BY JURY.
EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY
JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER ANY LOAN
DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS
OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO ANY LOAN DOCUMENT, OR THE
TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY
HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO
THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH
ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE
WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
10.19 Time of the Essence.
Time is of the essence in the performance of the Loan Documents.
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10.20 ENTIRE AGREEMENT.
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT
AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
10.21 Corporate Reorganization.
The Administrative Agent and each Lender hereby agree and consent to the
Corporate Reorganization so long as no Event of Default has occurred and is
continuing.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
ShowBiz Merchandising, L.P.,
a Texas limited partnership
By: CEC Entertainment, Inc.,
a Kansas corporation,
its general partner
By:___________________________________
Xxxxxx Xxxxxx,
Executive Vice President &
Chief Financial Officer
State of Texas
County of Dallas
This instrument was acknowledged before me on ____________, 2002 by Xxxxxx
Xxxxxx, Executive Vice President & Chief Financial Officer of CEC Entertainment,
Inc., a Kansas corporation, as general partner of ShowBiz Merchandising, L.P., a
Texas limited partnership, on behalf of said corporation and limited
partnership.
___________________________________
Title: ___________________________
My commission expires: ____________
S-1
CEC Entertainment, Inc.,
a Kansas corporation
By:___________________________________
Xxxxxx Xxxxxx,
Executive Vice President &
Chief Financial Officer
State of Texas
County of Dallas
This instrument was acknowledged before me on ____________, 2002 by Xxxxxx
Xxxxxx, Executive Vice President & Chief Financial Officer of CEC Entertainment,
Inc., a Kansas corporation, on behalf of said corporation.
________________________________
Title: _______________________
My commission expires: _________
S-2
BANK OF AMERICA, N.A., as
Administrative Agent
By:________________________________
Name: Xxxxxxx X. Xxxx
Title: Vice President
S-3
BANK OF AMERICA, N.A., as a Lender
and L/C Issuer
By:________________________________
Name: Xxxxxx X. Xxxxxxxxx
Title: Senior Vice President
S-4
BANK ONE, NA, as a Lender and as
Syndication Agent
By:________________________________
Name:______________________________
Title:_____________________________
S-5
US BANK NATIONAL ASSOCIATION, as a
Lender and as Co-Documentation Agent
By:_________________________________
Name:_______________________________
Title:______________________________
S-6
FLEET NATIONAL BANK, as a Lender and
as Co-Documentation Agent
By:_________________________________
Name:_______________________________
Title:______________________________
S-7
THE FROST NATIONAL BANK, as a Lender
By:_________________________________
Name:_______________________________
Title:______________________________
S-8
BANK HAPOALIM, as a Lender
By:_________________________________
Name:_______________________________
Title:______________________________
S-9
SCHEDULE 1.01
EXISTING LETTERS OF CREDIT
None.
SCHEDULE 2.01
COMMITMENTS
AND PRO RATA SHARES
Lender Commitment Pro Rata Share
------------------------------------------------------------------------------
Bank of America, N.A. $22,500,000.00 22.5%
Bank One, NA $20,000,000.00 20%
US Bank National Association $20,000,000.00 20%
Fleet National Bank $20,000,000.00 20%
The Frost National Bank $12,500,000.00 12.5%
Bank Hapoalim $ 5,000,000.00 5%
------------------------------------------------------------------------------
Total $100,000,000.00 100.000000000%
SCHEDULE 4.01
LIST OF JURISDICTIONS WHERE BORROWER AND SUBSIDIARIES ARE DOING
BUSINESS AND/OR ARE REQUIRED TO QUALIFY TO DO BUSINESS
CEC ShowBiz SPT TJH CEC
Entertainment, Merchandising, Distribution Restaurant Entertainment
Doing Business In Inc. L.P. Company, Inc. Group, Inc. Holdings, L.L.C.
----------------- -------------- -------------- ------------- ----------- ----------------
Alabama X
-----------------------------------------------------------------------------------------------
Alaska X
-----------------------------------------------------------------------------------------------
Arizona X
-----------------------------------------------------------------------------------------------
Arkansas X
-----------------------------------------------------------------------------------------------
California X
-----------------------------------------------------------------------------------------------
Colorado X
-----------------------------------------------------------------------------------------------
Connecticut X
-----------------------------------------------------------------------------------------------
D.C., Washington X
-----------------------------------------------------------------------------------------------
Delaware X
-----------------------------------------------------------------------------------------------
Florida X
-----------------------------------------------------------------------------------------------
Xxxxxxx X
-----------------------------------------------------------------------------------------------
Hawaii X
-----------------------------------------------------------------------------------------------
Idaho X
-----------------------------------------------------------------------------------------------
Illinois X
-----------------------------------------------------------------------------------------------
Indiana X
-----------------------------------------------------------------------------------------------
Iowa X
-----------------------------------------------------------------------------------------------
Kansas X X
-----------------------------------------------------------------------------------------------
Kentucky X
-----------------------------------------------------------------------------------------------
Louisiana X
-----------------------------------------------------------------------------------------------
Maine X
-----------------------------------------------------------------------------------------------
Maryland X
-----------------------------------------------------------------------------------------------
Massachusetts X
-----------------------------------------------------------------------------------------------
Michigan X
-----------------------------------------------------------------------------------------------
Minnesota X
-----------------------------------------------------------------------------------------------
Mississippi X
-----------------------------------------------------------------------------------------------
Missouri X
-----------------------------------------------------------------------------------------------
CEC Showbiz SPT TJH CEC
Entertainment, Merchandising, Distribution Restaurant Entertainment
Doing Business In Inc. L.P. Company, Inc. Group, Inc. Holdings, L.L.C.
----------------- -------------- -------------- ------------- ----------- ----------------
Montana X
-----------------------------------------------------------------------------------------------
Nebraska X
-----------------------------------------------------------------------------------------------
Nevada X X
-----------------------------------------------------------------------------------------------
New Hampshire X
-----------------------------------------------------------------------------------------------
New Jersey X
-----------------------------------------------------------------------------------------------
New Mexico X
-----------------------------------------------------------------------------------------------
New York X
-----------------------------------------------------------------------------------------------
North Carolina X
-----------------------------------------------------------------------------------------------
North Dakota X
-----------------------------------------------------------------------------------------------
Ohio X
-----------------------------------------------------------------------------------------------
Oklahoma X
-----------------------------------------------------------------------------------------------
Oregon X
-----------------------------------------------------------------------------------------------
Pennsylvania X
-----------------------------------------------------------------------------------------------
Rhode Island X
-----------------------------------------------------------------------------------------------
South Carolina X
-----------------------------------------------------------------------------------------------
South Dakota X
-----------------------------------------------------------------------------------------------
Tennessee X
-----------------------------------------------------------------------------------------------
Texas X X X X
-----------------------------------------------------------------------------------------------
Utah
-----------------------------------------------------------------------------------------------
Vermont X
-----------------------------------------------------------------------------------------------
Virginia X
-----------------------------------------------------------------------------------------------
Washington X
-----------------------------------------------------------------------------------------------
West Virginia X
-----------------------------------------------------------------------------------------------
Wisconsin X
-----------------------------------------------------------------------------------------------
SCHEDULE 5.05
SUPPLEMENT TO INTERIM FINANCIAL STATEMENTS
9/29/02
---------
Current Liabilities:
Current obligation debt and capital leases $ 137
Current portion of long-term debt 41,060
Accounts payable 23,259
Accrued expenses-
Taxes, other than income 6,761
Salaries 8,459
Interest 105
Rent 277
Other 8,754
Accrued income taxes (0)
---------
Total Current Liabilities 88,812
---------
Long-term Liabilities:
Capital lease obligation 387
Deferred credits 3,903
Deferred tax liability 35,187
Insurance liability 4,750
Redeemable preferred stock 2,539
---------
46,766
---------
Letters of credit 125
---------
Total liabilities $ 135,703
=========
SCHEDULE 5.06
LITIGATION
1. Xxxxxx Xxxxxxxxx, et al. v. CEC Entertainment, Inc., dba Xxxxx X. Cheese's,
et al., Cause No. 00-08132 FMC (RZx), filed in the Superior Court of the
State of California of the County of Los Angeles on June 2, 2000.
2. Xxxxxxxx Xxxxxxxxxx v. CEC Entertainment, Inc., et al., Cause No. 1: 02CV
1510, filed in the Court of Common Pleas, Cayahoga County, Ohio on June 26,
2002.
SCHEDULE 5.13
SUBSIDIARIES
AND OTHER EQUITY INVESTMENTS
Part (a). Subsidiaries.
ShowBiz Merchandising, L.P.
CEC Entertainment Holdings, LLC
SPT Distribution Company, Inc.
TJH Restaurant Group, Inc.
3557944 Canada, Inc.
BHC Acquisition Corporation
Xxxxx X. Cheese of Gaithersburg, Inc.
Xxxxx X. Cheese of Xxxx Burnie, Inc.
Xxxxx X. Cheese of Silver Springs, Inc.
Xxxxx X. Cheese of Waldorf, Inc.
Hospitality Distribution Incorporated
SB Hospitality Corporation
ShowBiz of Laurel, Inc.
Part (b). Other Equity Investments.
CEC Film and Video Limited Liability Company
International Association of CEC Entertainment, Inc.
SCHEDULE 7.01
EXISTING LIENS
None.
SCHEDULE 7.03
EXISTING INDEBTEDNESS
1. Irrevocable Documentary Letter of Credit No. LCCH915 issued by Bank One,
NA, in the face amount of $33,140.40 for the benefit of Hugo Creations with
an expiry date of February 15, 2003.
2. Irrevocable Standby Letter of Credit Xx. XXX00000 issued by Bank One, NA,
in the face amount of CAD$15,000.00 in favor of Riocan Holdings, Inc.
3. Irrevocable Standby Letter of Credit No. 00000000 issued by Bank One, NA,
in the face amount of $58,600.00 for the benefit of Great Northern Shopping
Center.
10/27/02
--------
Current Liabilities:
Current obligation debt and capital leases $ 137
Long-term Liabilities:
Capital lease obligation $ 377
SCHEDULE 10.02
ADMINISTRATIVE AGENT'S OFFICE,
CERTAIN ADDRESSES FOR NOTICES
ShowBiz Merchandising, L.P.
0000 X. Xxxxxxx Xxxxxxx
Xxxxxx, Xxxxx 00000
Attention: Chief Financial Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Electronic Mail: xxxxxxx@xxxxxxxxxxxxxxxx.xxx
Website Address: xxx.xxxxxxxxxxxx.xxx
with a copy to:
CEC Entertainment, Inc.
0000 X. Xxxxxxx Xxxxxxx
Xxxxxx, Xxxxx 00000
Attention: Legal Department
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Electronic Mail: xxxxxxx@xxxxxxxxxxxxxxxx.xxx
Website Address: xxx.xxxxxxxxxxxx.xxx
ADMINISTRATIVE AGENT:
Administrative Agent's Office
(for payments and Requests for Credit Extensions):
Bank of America, N.A.
000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000-0000
Attention: XXXXXX XXXXXX
Telephone: 000-000-0000
Facsimile: 000-000-0000
Electronic Mail: xxxxxx.x.xxxxxx@xxxxxxxxxxxxx.xxx
ABA #000-000-000
Bank of America, Dallas TX
Account No. #000-0000-000
Account Name: CORPORATE CREDIT SERVICES
Ref: ShowBiz Merchandising, L.P.
Other Notices as Administrative Agent:
Bank of America, N.A.
Agency Management
000 X. Xx Xxxxx Xxxxxx
XX 1-231-08-30
Xxxxxxx, XX 00000
Attention: XXXXXXX XXXX, VP
Telephone: 000-000-0000
Facsimile: 000-000-0000
Electronic Mail: xxxxxxx.x.xxxx@xxxxxxxxxxxxx.xxx
L/C ISSUER:
Bank of America, N.A.
Trade Operations-Los Angeles #22621
000 X. Xxxxxxx Xxxxxx, 00xx Xxxxx
Mail Code: CA9-703-19-23
Xxx Xxxxxxx, XX 00000-0000
Attention: Xxx Xxxxxx,
Vice President
Telephone: 000.000.0000
Facsimile: 213.345.6710
Electronic Mail: xxx.xxxxxx@xxxxxxxxxxxxx.xxx
EXHIBIT A
FORM OF COMMITTED LOAN NOTICE
Date: ___________, _____
To: Bank of America, N.A., as Administrative Agent
Ladies and Gentlemen:
Reference is made to that certain Credit Agreement, dated as of December 3,
2002; (as amended, restated, extended, supplemented or otherwise modified in
writing from time to time, the "Agreement;" the terms defined therein being used
herein as therein defined), among ShowBiz Merchandising, L.P., a Texas limited
partnership (the "Borrower"), CEC Entertainment, Inc., as a Guarantor, the
Lenders from time to time party thereto, Bank One, NA, as Syndication Agent,
U.S. Bank National Association, as Co-Documentation Agent, Fleet National Bank,
as Co-Documentation Agent, and Bank of America, N.A., as Administrative Agent
and L/C Issuer.
The undersigned hereby requests (select one):
[ ] A Borrowing of Committed Loans [ ] A conversion or continuation of
Loans
1. On __________________________ (a Business Day).
2. In the amount of $____________________.
3. Comprised of _________________________.
[Type of Committed Loan requested]
4. For Eurodollar Rate Loans: with an Interest Period of _____ months.
The Committed Borrowing requested herein complies with the proviso to the
first sentence of Section 2.01 of the Agreement.
ShowBiz Merchandising, L.P.,
a Texas limited partnership
By: CEC Entertainment, Inc.,
a Kansas corporation,
its general partner
By:__________________________________
Name:________________________________
Title:_______________________________
A-1
EXHIBIT B
INTENTIONALLY OMITTED
B-1
EXHIBIT C
FORM OF NOTE
__________________________
FOR VALUE RECEIVED, the undersigned (the "Borrower"), hereby promises to
pay to _____________________ or registered assigns (the "Lender"), in accordance
with the provisions of the Agreement (as hereinafter defined), the principal
amount of each Loan from time to time made by the Lender to the Borrower under
that certain Credit Agreement, dated as of December 3, 2002 (as amended,
restated, extended, supplemented or otherwise modified in writing from time to
time, the "Agreement;" the terms defined therein being used herein as therein
defined), among the Borrower, CEC Entertainment, Inc., as a Guarantor, the
Lenders from time to time party thereto, Bank One, NA, as Syndication Agent,
U.S. Bank National Association, as Co-Documentation Agent, Fleet National Bank,
as Co-Documentation Agent, and Bank of America, N.A., as Administrative Agent
and L/C Issuer.
The Borrower promises to pay interest on the unpaid principal amount of
each Loan from the date of such Loan until such principal amount is paid in
full, at such interest rates and at such times as provided in the Agreement. All
payments of principal and interest shall be made to the Administrative Agent for
the account of the Lender in Dollars in immediately available funds at the
Administrative Agent's Office. If any amount is not paid in full when due
hereunder, such unpaid amount shall bear interest, to be paid upon demand, from
the due date thereof until the date of actual payment (and before as well as
after judgment) computed at the per annum rate set forth in the Agreement.
This Note is one of the Notes referred to in the Agreement, is entitled to
the benefits thereof and may be prepaid in whole or in part subject to the terms
and conditions provided therein. This Note is also entitled to the benefits of
the Guaranty. Upon the occurrence and continuation of one or more of the Events
of Default specified in the Agreement, all amounts then remaining unpaid on this
Note shall become, or may be declared to be, immediately due and payable all as
provided in the Agreement. Loans made by the Lender shall be evidenced by one or
more loan accounts or records maintained by the Lender in the ordinary course of
business. The Lender may also attach schedules to this Note and endorse thereon
the date, amount and maturity of its Loans and payments with respect thereto.
The Borrower, for itself, its successors and assigns, hereby waives
diligence, presentment, protest and demand and notice of protest, demand,
dishonor and non-payment of this Note.
C-1
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF TEXAS.
ShowBiz Merchandising, L.P.,
a Texas limited partnership
By: CEC Entertainment, Inc.,
a Kansas corporation,
its general partner
By:_______________________________
Name:_____________________________
Title:____________________________
C-2
LOANS AND PAYMENTS WITH RESPECT THERETO
Amount of
Principal Outstanding
End of or Interest Principal
Type of Amount of Interest Paid This Balance Notation
Date Loan Made Loan Made Period Date This Date Made By
----- --------- --------- -------- ----------- ----------- --------
----- --------- --------- -------- ----------- ----------- --------
----- --------- --------- -------- ----------- ----------- --------
----- --------- --------- -------- ----------- ----------- --------
----- --------- --------- -------- ----------- ----------- --------
----- --------- --------- -------- ----------- ----------- --------
----- --------- --------- -------- ----------- ----------- --------
----- --------- --------- -------- ----------- ----------- --------
----- --------- --------- -------- ----------- ----------- --------
----- --------- --------- -------- ----------- ----------- --------
----- --------- --------- -------- ----------- ----------- --------
----- --------- --------- -------- ----------- ----------- --------
----- --------- --------- -------- ----------- ----------- --------
----- --------- --------- -------- ----------- ----------- --------
----- --------- --------- -------- ----------- ----------- --------
----- --------- --------- -------- ----------- ----------- --------
----- --------- --------- -------- ----------- ----------- --------
----- --------- --------- -------- ----------- ----------- --------
----- --------- --------- -------- ----------- ----------- --------
C-3
EXHIBIT D
FORM OF COMPLIANCE CERTIFICATE
Financial Statement Date: ____________,___
To: Bank of America, N.A., as Administrative Agent
Ladies and Gentlemen:
Reference is made to that certain Credit Agreement, dated as of December 3,
2002 (as amended, restated, extended, supplemented or otherwise modified in
writing from time to time, the "Agreement;" the terms defined therein being used
herein as therein defined), among ShowBiz Merchandising, L.P., a Texas limited
partnership (the "Borrower"), CEC Entertainment, Inc., as a Guarantor, the
Lenders from time to time party thereto, Bank One, NA, as Syndication Agent,
U.S. Bank National Association, as Co-Documentation Agent, Fleet National Bank,
as Co-Documentation Agent, and Bank of America, N.A., as Administrative Agent
and L/C Issuer.
The undersigned Responsible Officer hereby certifies as of the date hereof
that he/she is the _____________________________ of CEC Entertainment, and that,
as such, he/she is authorized to execute and deliver this Compliance Certificate
to the Administrative Agent on the behalf of the Borrower and CEC Entertainment,
and that:
[Use following paragraph 1 for fiscal year-end financial statements]
1. Attached hereto as Schedule 1 are the year-end audited financial
statements required by Section 6.01(a) of the Agreement for the fiscal year of
CEC Entertainment ended as of the above date, together with the report and
opinion of an independent certified public accountant required by such section.
[Use following paragraph 1 for fiscal quarter-end financial statements]
1. Attached hereto as Schedule 1 are the unaudited financial statements
required by Section 6.01(b) of the Agreement for the fiscal quarter of CEC
Entertainment ended as of the above date. Such financial statements fairly
present the financial condition, results of operations and cash flows of the
Borrower and CEC Entertainment and its Subsidiaries in accordance with GAAP as
at such date and for such period, subject only to normal year-end audit
adjustments and the absence of footnotes.
2. The undersigned has reviewed and is familiar with the terms of the
Agreement and has made, or has caused to be made under his/her supervision, a
detailed review of the transactions and condition (financial or otherwise) of
the Borrower and CEC Entertainment during the accounting period covered by the
attached financial statements.
3. A review of the activities of the Borrower and CEC Entertainment during
such fiscal period has been made under the supervision of the undersigned with a
view to determining whether during such fiscal period the Borrower and CEC
Entertainment performed and observed all its Obligations under the Loan
Documents, and
D-1
[select one:]
[to the best knowledge of the undersigned during such fiscal period, the
Borrower and CEC Entertainment performed and observed each covenant and
condition of the Loan Documents applicable to it.]
--or--
[the following covenants or conditions have not been performed or observed
and the following is a list of each such Default and its nature and status:]
4. The representations and warranties of the Borrower and CEC Entertainment
contained in Article V of the Agreement, or which are contained in any document
furnished at any time under or in connection with the Loan Documents, are true
and correct on and as of the date hereof, except to the extent that such
representations and warranties specifically refer to an earlier date, in which
case they are true and correct as of such earlier date, and except that for
purposes of this Compliance Certificate, the representations and warranties
contained in subsections (a) and (b) of Section 5.05 of the Agreement shall be
deemed to refer to the most recent statements furnished pursuant to clauses (a)
and (b), respectively, of Section 6.01 of the Agreement, including the
statements in connection with which this Compliance Certificate is delivered.
5. The financial covenant analyses and information set forth on Schedule 2
attached hereto are true and accurate on and as of the date of this Certificate.
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of
_______________, ______.
CEC Entertainment, Inc.,
a Kansas corporation
By:______________________________
Name:____________________________
Title:___________________________
ShowBiz Merchandising, L.P.,
a Texas limited partnership
By: CEC Entertainment, Inc.,
a Kansas corporation,
its general partner
By:______________________________
Name:____________________________
Title:___________________________
D-2
For the Quarter/Year ended ___________________("Statement Date")
SCHEDULE 2
to the Compliance Certificate
I. Section 7.11(a) - Consolidated Net Worth.
A. Actual Consolidated Net Worth at Statement Date: $_______________
B. Initial minimum Consolidated Net Worth: $ 285,000,000.00
C. 50% of Consolidated Net Income for each full
fiscal quarter ending after September 29, 2002
(no reduction for losses): $_______________
D. 100% of increases in Shareholders' Equity after
September 29, 2002 from issuance and sale of
capital stock or other equity interests
(including from conversion of debt securities): $_______________
E. Minimum required Consolidated Net Worth
(Lines I.B + I.C + I.D): $_______________
F. Excess (deficient) for covenant compliance
(Line I.A - I.E): $_______________
II. Section 7.11 (b) - Consolidated Fixed Charge Coverage Ratio.
A. Consolidated EBITDA for four consecutive fiscal
quarters ending on above date ("Subject Period"):
1. Consolidated Net Income for Subject Period: $_______________
2. Consolidated Interest Charges for Subject
Period: $_______________
3. Taxes incurred during Subject Period: $_______________
4. Depreciation expenses for Subject Period: $_______________
5. Amortization expenses for intangibles for
Subject Period: $_______________
6. Other expenses reducing Consolidated Net
Income which do not represent a cash item
for Subject Period: $_______________
7. Non-cash items increasing Consolidated Net
Income for Subject Period: $_______________
8. Consolidated EBITDA (Lines II.A.1+2+3+4+5+6-7): $_______________
9. Consolidated rents for Subject Period: $_______________
10. Consolidated EBITDAR (Lines II.A.8 + 9): $_______________
D-3
B. Adjustments to EBITDAR:
1. Taxes paid during the Subject Period: $_______________
2. Dividends paid during the Subject Period: $_______________
3. Maintenance Capital Costs ($20,000/unit)
for the Subject Period: $_______________
C. Adjusted EBITDAR (II.A.10-II.B.1-II.B.2-II.B.3) $_______________
D. Fixed Charges:
1. Consolidated Interest Charges for Subject
Period: $_______________
2. Rental payments made during Subject Period: $_______________
3. Current maturities of Long Term Debt plus
scheduled payments of any Indebtedness for
Subject Period: $_______________
4. Capital lease payments for Subject Period: $_______________
5. Total Fixed Charges (II.D.1+D.2+D.3+D.4): $_______________
E. Consolidated Fixed Charge Coverage Ratio (Adjusted
EBITDAR/Total Fixed Charges): ________ to 1.0
Minimum Permitted: 1.5 to 1.0
III. Section 7.11 (c) - Consolidated Leverage Ratio.
A. Consolidated Funded Indebtedness for Subject Period: $_______________
B. All lease and rent expense for real and personal
property for the Subject Period: $_______________
C. III.B multiplied by 8: $_______________
D. III.A plus C: $_______________
E. Consolidated EBITDAR for the Subject Period
(II.A.10): $_______________
F. Consolidated Leverage Ratio (Line III.D/Line III.E): ________ to 1.0
Maximum Permitted: 3.25 to 1.0
D-4
EXHIBIT E
ASSIGNMENT AND ASSUMPTION
This Assignment and Assumption (this "Assignment and Assumption") is dated
as of the Effective Date set forth below and is entered into by and between
[Insert name of Assignor] (the "Assignor") and [Insert name of Assignee] (the
"Assignee"). Capitalized terms used but not defined herein shall have the
meanings given to them in the Credit Agreement identified below (the "Credit
Agreement"), receipt of a copy of which is hereby acknowledged by the Assignee.
The Standard Terms and Conditions set forth in Annex 1 attached hereto are
hereby agreed to and incorporated herein by reference and made a part of this
Assignment and Assumption as if set forth herein in full.
For an agreed consideration, the Assignor hereby irrevocably sells and
assigns to the Assignee, and the Assignee hereby irrevocably purchases and
assumes from the Assignor, subject to and in accordance with the Standard Terms
and Conditions and the Credit Agreement, as of the Effective Date inserted by
the Administrative Agent as contemplated below (i) all of the Assignor's rights
and obligations as a Lender under the Credit Agreement and any other documents
or instruments delivered pursuant thereto to the extent related to the amount
and percentage interest identified below of all of such outstanding rights and
obligations of the Assignor under the respective facilities identified below
(including, without limitation, Letters of Credit and Guarantees included in
such facilities) and (ii) to the extent permitted to be assigned under
applicable law, all claims, suits, causes of action and any other right of the
Assignor (in its capacity as a Lender) against any Person, whether known or
unknown, arising under or in connection with the Credit Agreement, any other
documents or instruments delivered pursuant thereto or the loan transactions
governed thereby or in any way based on or related to any of the foregoing,
including, but not limited to, contract claims, tort claims, malpractice claims,
statutory claims and all other claims at law or in equity related to the rights
and obligations sold and assigned pursuant to clause (i) above (the rights and
obligations sold and assigned pursuant to clauses (i) and (ii) above being
referred to herein collectively as, the "Assigned Interest"). Such sale and
assignment is without recourse to the Assignor and, except as expressly provided
in this Assignment and Assumption, without representation or warranty by the
Assignor.
1. Assignor: ______________________________
2. Assignee: ______________________________ [and is an
Affiliate/Approved Fund of [identify Lender](1)]
3. Borrower(s): ______________________________
4. Administrative Agent: ______________________, as the administrative agent
under the Credit Agreement
5. Credit Agreement: The Credit Agreement, dated as of December 3, 2002 among
ShowBiz Merchandising, L.P., CEC Entertainment, Inc., as
a Guarantor, the Lenders parties thereto, Bank One, NA,
as Syndication Agent, U.S. Bank National Association, as
_______________________
(1) Select as applicable.
X-0
Xx-Xxxxxxxxxxxxx Xxxxx, Xxxxx National Bank, as
Co-Documentation Agent, and Bank of America, N.A., as
Administrative Agent
6. Assigned Interest:
Aggregate
Amount of Amount of Percentage
Commitment/Loan Commitment/Loans Assigned of
Facility Assigned for all Lenders* Assigned* Commitment/Loan (2)
----------------- ---------------- ---------------- ---------------
Revolving Credit
Commitment $_______________ $_______________ ______________%
_________________ $_______________ $_______________ ______________%
_________________ $_______________ $_______________ ______________%
[7. Trade Date: __________________] (3)
Effective Date: __________________, 20__ [TO BE INSERTED BY ADMINISTRATIVE AGENT
AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER
THEREFOR.]
The terms set forth in this Assignment and Assumption are hereby agreed to:
ASSIGNOR
[NAME OF ASSIGNOR]
By: _____________________________
Title:
ASSIGNEE
[NAME OF ASSIGNEE]
By: _____________________________
Title:
_________________________
(2) Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans
of all Lenders thereunder.
(3) To be completed if the Assignor and the Assignee intend that the minimum
assignment amount is to be determined as of the Trade Date.
E-2
[Consented to and](4) Accepted:
[NAME OF ADMINISTRATIVE AGENT], as
Administrative Agent
By: _________________________________
Title:
[BORROWER]
By: _________________________________
Title:
__________________________
(4) To be added only if the consent of the Administrative Agent is required by
the terms of the Credit Agreement.
E-3
ANNEX 1 TO ASSIGNMENT AND ASSUMPTION
CREDIT AGREEMENT dated as of December 3, 2002 among ShowBiz Merchandising,
L.P., CEC Entertainment, Inc., as a Guarantor, the Lenders from time to time
party thereto, Bank One, NA, as Syndication Agent, U.S. Bank National
Association, as Co-Documentation Agent, Fleet National Bank, as Co-Documentation
Agent, and Bank of America, N.A., as Administrative Agent and L/C Issuer.
STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION
1. Representations and Warranties.
1.1. Assignor. The Assignor (a) represents and warrants that (i) it is the
legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest
is free and clear of any lien, encumbrance or other adverse claim and (iii) it
has full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby; and (b) assumes no responsibility with respect to (i) any
statements, warranties or representations made in or in connection with the
Credit Agreement or any other Loan Document, (ii) the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Loan
Documents or any collateral thereunder, (iii) the financial condition of the
Borrower or CEC Entertainment or any of its Subsidiaries or Affiliates or any
other Person obligated in respect of any Loan Document or (iv) the performance
or observance by the Borrower or CEC Entertainment or any of its Subsidiaries or
Affiliates or any other Person of any of their respective obligations under any
Loan Document.
1.2. Assignee. The Assignee (a) represents and warrants that (i) it has
full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby and to become a Lender under the Credit Agreement, (ii) it
meets all requirements of an Eligible Assignee under the Credit Agreement
(subject to receipt of such consents as may be required under the Credit
Agreement), (iii) from and after the Effective Date, it shall be bound by the
provisions of the Credit Agreement as a Lender thereunder and, to the extent of
the Assigned Interest, shall have the obligations of a Lender thereunder, (iv)
it has received a copy of the Credit Agreement, together with copies of the most
recent financial statements delivered pursuant to Section 6.01 thereof, as
applicable, and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Assumption and to purchase the Assigned Interest on the basis of
which it has made such analysis and decision independently and without reliance
on the Administrative Agent or any other Lender, and (v) if it is a Foreign
Lender, attached hereto is any documentation required to be delivered by it
pursuant to the terms of the Credit Agreement, duly completed and executed by
the Assignee; and (b) agrees that (i) it will, independently and without
reliance on the Administrative Agent, the Assignor or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Loan Documents, and (ii) it will perform in accordance with their
terms all of the obligations which by the terms of the Loan Documents are
required to be performed by it as a Lender.
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2. Payments. From and after the Effective Date, the Administrative Agent
shall make all payments in respect of the Assigned interest (including payments
of principal, interest, fees and other amounts) to the Assignee whether such
amounts have accrued prior to or on or after the Effective Date. The Assignor
and the Assignee shall make all appropriate adjustments in payments by the
Administrative Agent for periods prior to the Effective Date or with respect to
the making of this assignment directly between themselves.
3. General Provisions. This Assignment and Assumption shall be binding
upon, and inure to the benefit of, the parties hereto and their respective
successors and assigns. This Assignment and Assumption may be executed in any
number of counterparts, which together shall constitute one instrument. Delivery
of an executed counterpart of a signature page of this Assignment and Assumption
by telecopy shall be effective as delivery of a manually executed counterpart of
this Assignment and Assumption. This Assignment and Assumption shall be governed
by, and construed in accordance with, the law of the State of Texas.
E-5
EXHIBIT F
FORM OF GUARANTY
(Subsidiaries of CEC Entertainment, Inc.)
This Guaranty dated as of December 3, 2002 ("Agreement"), is made by the
undersigned subsidiaries of CEC Entertainment, Inc., a Kansas corporation (each
a "Guarantor"), in favor of Bank of America, N.A., in its capacity as
Administrative Agent ("Administrative Agent") for certain financial institutions
which are or may become parties to the Credit Agreement described below.
INTRODUCTION
This Agreement is given in connection with the Credit Agreement dated as of
December 3, 2002 (as modified from time to time, the "Credit Agreement"), among
ShowBiz Merchandising, L.P., a Texas limited partnership ("Borrower"), CEC
Entertainment, Inc., as a Guarantor, certain financial institutions which are or
may become parties thereto, Bank One, NA, as Syndication Agent, U.S. Bank
National Association, as Co-Documentation Agent, Fleet National Bank, as
Co-Documentation Agent, and the Administrative Agent, the defined terms of which
are used herein unless otherwise defined herein. It is a condition precedent to
the obligation of the Lenders to make any extension of credit under the Credit
Agreement that the Guarantors execute and deliver this Agreement to the
Administrative Agent. Each Guarantor is a Subsidiary of CEC Entertainment, and
the Borrower is a Subsidiary of CEC Entertainment. Because each Guarantor
receives and, as a result of its ownership by CEC Entertainment, expects to
continue to receive financial support from CEC Entertainment, each Guarantor
will obtain substantial benefit from the extensions of credit expected to be
made to the Borrower under the Credit Agreement.
Therefore, to induce the Administrative Agent and such financial
institutions to enter into the Credit Agreement, the Guarantors jointly and
severally agree as follows:
Section 1. Guaranty. The Guarantors irrevocably and jointly and severally
guarantee to the Administrative Agent (a) the full payment when due of all
principal, interest, fees, reimbursements, indemnifications, Attorney Costs, and
other reasonable amounts now or hereafter owed by the Borrower to the
Administrative Agent and the Lenders (and with respect to the Swap Contracts,
the Affiliates of the Administrative Agent and the Lenders) under the terms of
the Credit Agreement and the other Loan Documents, including amounts owed under
the terms of the Credit Agreement and the other Loan Documents for which the
Borrower obtains relief under bankruptcy or other laws providing for relief from
creditors, (b) the full payment when due of any increases, extensions, and
rearrangements of the foregoing obligations under any amendments, supplements,
and other modifications of the documents and agreements creating the foregoing
obligations, and (c) any and all covenants and agreements of the Borrower under
the Credit Agreement or other Loan Documents, whether presently existing or
hereinafter entered into, will be duly and promptly observed and performed
(collectively, the "Guaranteed Obligations"). This is a guaranty of payment and
not merely a guaranty of collection, and each Guarantor is liable as a primary
obligor. If any of the Guaranteed Obligations are not punctually paid or
performed when due, whether by maturity, acceleration, or otherwise, and the
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Administrative Agent shall notify any Guarantor of such default and make demand
for payment and/or performance hereunder, such Guarantor shall immediately pay
to the Administrative Agent the full amount of the Guaranteed Obligations which
are due and payable. Each Guarantor shall make each payment to the
Administrative Agent in U.S. Dollars in immediately available funds as directed
by the Administrative Agent. The Administrative Agent is hereby authorized at
any time following any demand for payment hereunder to set off and apply any
indebtedness owed by the Administrative Agent to any Guarantor against any and
all of the obligations of such Guarantor under this Agreement. The
Administrative Agent agrees to promptly notify such Guarantor after any such
setoff and application, but the failure to give such notice shall not affect the
validity of such setoff and application.
Section 2. Guaranty Absolute.
2.1 This Agreement shall be deemed accepted by the Administrative Agent
upon receipt, and the obligations of the Guarantors under this Agreement are
effective immediately and are continuing and cover all Guaranteed Obligations
arising prior to and after the date hereof. This Agreement may not be revoked by
any Guarantor and shall continue to be effective with respect to Guaranteed
Obligations arising or created after any attempted revocation by any Guarantor.
2.2 Each Guarantor guarantees that the Guaranteed Obligations will be paid
strictly in accordance with the terms of the Credit Agreement and the other Loan
Documents, regardless of any law, regulation, or order now or hereafter in
effect in any jurisdiction affecting any of such terms or the rights of the
Administrative Agent or the Lenders with respect thereto. Each Guarantor agrees
that such Guarantor's obligations under this Agreement shall not be released,
diminished, or impaired by, and waives any rights which such Guarantor might
otherwise have which relate to:
(a) Any lack of validity or enforceability of the Guaranteed Obligations,
any Loan Document, or any other agreement or instrument relating thereto; any
increase, reduction, extension, or rearrangement of the Guaranteed Obligations;
any amendment, supplement, or other modification of the Loan Documents; any
waiver or consent granted under the Loan Documents, including waivers of the
payment and performance of the Guaranteed Obligations; or any sale, assignment,
delegation, or other transfer of the Guaranteed Obligations or the Loan
Documents;
(b) Any grant of any security or support for the Guaranteed Obligations or
any impairment of any security or support for the Guaranteed Obligations,
including any full or partial release, exchange, subordination, or waste of any
collateral for the Guaranteed Obligations or any full or partial release of the
Borrower, any Guarantor, or any other Person liable for the payment or
performance of the Guaranteed Obligations; any change in the organization or
structure of the Borrower, any Guarantor, or any other Person liable for the
payment or performance of the Guaranteed Obligations; or the insolvency,
bankruptcy, liquidation, or dissolution of the Borrower, any Guarantor, or any
other Person liable for the payment or performance of the Guaranteed
Obligations;
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(c) The manner of applying payments on the Guaranteed Obligations or the
proceeds of any security or support for the Guaranteed Obligations against the
Guaranteed Obligations;
(d) The failure to give notice of the occurrence of any of the events or
actions referred to in this Section 2.2, notice of any Default or Event of
Default, however denominated, under the Loan Documents, notice of intent to
demand, notice of demand, notice of presentment for payment, notice of
nonpayment, notice of intent to protest, notice of protest, notice of grace,
notice of dishonor, notice of intent to accelerate, notice of acceleration,
notice of bringing of action to enforce the payment or performance of the
Guaranteed Obligations, notice of any sale or foreclosure of any collateral for
the Guaranteed Obligations, notice of any transfer of the Guaranteed
Obligations, notice of the financial condition of or other circumstances
regarding the Borrower, any Guarantor, or any other Person liable for the
Guaranteed Obligations, or any other notice of any kind relating to the
Guaranteed Obligations (and the parties intend that no Guarantor shall be
considered a "Debtor" as defined in Section 9.102 of the Texas Business and
Commerce Code for the purpose of notices required to be given to a Debtor under
such code); or
(e) Any other action taken or omitted which affects the Guaranteed
Obligations, whether or not such action or omission prejudices any Guarantor or
increases the likelihood that any Guarantor will be required to pay the
Guaranteed Obligations pursuant to the terms hereof--it is the unambiguous and
unequivocal intention of each Guarantor that such Guarantor shall be obligated
to pay the Guaranteed Obligations when due, notwithstanding any occurrence,
circumstance, event, action, or omission whatsoever, whether contemplated or
uncontemplated, and whether or not particularly described herein.
2.3 This Agreement shall continue to be effective or be reinstated, as the
case may be, if any payment on the Guaranteed Obligations must be refunded for
any reason including any bankruptcy proceeding. In the event that the
Administrative Agent or any Lender must refund any payment received against the
Guaranteed Obligations, any prior release from the terms of this Agreement given
to any Guarantor by the Administrative Agent shall be without effect, and this
Agreement shall be reinstated in full force and effect. It is the intention of
each Guarantor that such Guarantor's obligations hereunder shall not be
discharged except by final payment of the Guaranteed Obligations.
2.4 (a) Each Guarantor is a Subsidiary of CEC Entertainment and receives
and, because of its ownership by CEC Entertainment, expects to continue to
receive business opportunities and financial support from CEC Entertainment. The
Borrower is a Subsidiary of CEC Entertainment and CEC Entertainment receives
and, because of its ownership of the Borrower, expects to continue to receive
business opportunities and financial benefits from the Borrower. Each Guarantor
has agreed to enter into this Agreement so that the Borrower can receive the
benefits of the Guaranteed Obligations and continue to provide these services to
CEC Entertainment, who provides these services to such Guarantor.
(b) If it is judicially determined with respect to any Guarantor that
entering into this Agreement would violate Section 548 of the United States
Bankruptcy Code or any comparable provisions of any state law, then such
Guarantor shall be liable under this Guaranty only for amounts aggregating up to
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the largest amount that would not render such Guarantor's obligations hereunder
subject to avoidance under Section 548 of the United States Bankruptcy Code or
any comparable provisions of any state law.
(c) Each Guarantor agrees that each Guarantor shall have rights of
contribution and subrogation against each other Guarantor with respect to any
payments made in connection with the Guaranteed Obligations.
Section 3. Unimpaired Collection.
3.1 There are no conditions precedent to the enforcement of this Agreement,
except as expressly contained herein. It shall not be necessary for the
Administrative Agent, in order to enforce payment by any Guarantor under this
Agreement, to show any proof of the Borrower's default, to exhaust the
Administrative Agent's remedies against the Borrower, any Guarantor, or any
other Person liable for the payment or performance of the Guaranteed
Obligations, to enforce any security or support for the payment or performance
of the Guaranteed Obligations, or to enforce any other means of obtaining
payment or performance of the Guaranteed Obligations. Each Guarantor waives any
rights under Chapter 34 of the Texas Business and Commerce Code, Section 17.001
of the Texas Civil Practice and Remedies Code, and Rule 31 of the Texas Rules of
Civil Procedure related to the foregoing. Neither the Administrative Agent nor
the Lenders shall be required to mitigate damages or take any other action to
reduce, collect, or enforce the Guaranteed Obligations.
3.2 With respect to each Guarantor, all Subordinated Obligations of such
Guarantor (as defined below) shall be subordinate and junior in right of payment
and collection to the payment and collection in full of all Guaranteed
Obligations as described below:
(a) As used herein, the term "Subordinated Obligations" for such Guarantor
means: (i) all present and future indebtedness, liabilities, and obligations of
any kind owed by the Borrower, any Guarantor, or any other Person liable for the
payment or performance of the Guaranteed Obligations to such Guarantor,
including debt obligations, equity obligations, and other contractual
obligations requiring payments of any kind to be made to such Guarantor and
including any right of subrogation (including any statutory rights of
subrogation under Section 509 of the Bankruptcy Code, 11 U.S.C. ' 509, or under
Chapter 34 of the Texas Business and Commerce Code), contribution,
indemnification, reimbursement, exoneration, or any right to participate in any
claim or remedy of the Administrative Agent against the Borrower, any Guarantor,
or any Person liable for the payment or performance of the Guaranteed
Obligations, or any collateral which the Administrative Agent now has or may
acquire, and (ii) any increases, extensions, and rearrangements of the foregoing
obligations under any amendments, supplements, and other modifications of the
documents and agreements creating the foregoing obligations.
(b) Until all Guaranteed Obligations have been irrevocably paid in full
(and therefore the payment thereof is no longer subject to being set aside or
returned under the law), such Guarantor agrees not to take any action to enforce
payment of the Subordinated Obligations of such Guarantor, but this standstill
is not intended as a permanent waiver of the subrogation, contribution,
indemnification, reimbursement, exoneration, participation, or other rights of
such Guarantor.
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(c) Upon any receivership, insolvency proceeding, bankruptcy proceeding,
assignment for the benefit of creditors, reorganization, arrangement with
creditors, sale of assets for creditors, dissolution, liquidation, or marshaling
of the assets of the Borrower, any Guarantor, or any other Person liable for the
payment or performance of the Guaranteed Obligations, all amounts due with
respect to the Guaranteed Obligations shall be paid in full before such
Guarantor shall be entitled to collect or receive any payment with respect to
the Subordinated Obligations of such Guarantor, and all payments to which such
Guarantor would be entitled to collect or receive on the Subordinated
Obligations of such Guarantor shall be paid over to the Administrative Agent for
application to the Guaranteed Obligations.
(d) Following written notice from the Administrative Agent to the Borrower
that a Default or an Event of Default has occurred and is continuing and that no
further payments shall be made on the Subordinated Obligations of such Guarantor
until (i) all amounts due with respect to the Guaranteed Obligations shall be
paid in full or (ii) the Administrative Agent revokes such notice, such
Guarantor shall not be entitled to collect or receive any payment with respect
to the Subordinated Obligations of such Guarantor.
(e) If applicable, any lien, security interest, or assignment securing the
repayment of the Subordinated Obligations of such Guarantor shall be fully
subordinate to any lien, security interest, or assignment, if applicable, in
favor of the Administrative Agent which secures the Guaranteed Obligations. At
the request of the Administrative Agent, such Guarantor will take any and all
steps necessary to fully evidence the subordination granted hereunder, including
amending or terminating financing statements and executing and recording
subordinations of liens.
(f) This is an absolute and irrevocable agreement of subordination and the
Administrative Agent may, without notice to such Guarantor, take any action
described in Section 2.2 without impairing or releasing the obligations of such
Guarantor hereunder.
(g) Such Guarantor shall not assign or otherwise transfer to any other
Person any interest in the Subordinated Obligations of such Guarantor unless
such Guarantor causes the assignee or other transferee to execute and deliver to
the Administrative Agent a subordination agreement in substantially the form of
the subordination provisions in this Agreement.
(h) If any amount shall be paid to such Guarantor in violation of this
Section 3.2, such amount shall be held in trust for the benefit of the
Administrative Agent and immediately turned over to the Administrative Agent,
with any necessary endorsement, to be applied to the Guaranteed Obligations.
Section 4. Miscellaneous.
4.1 Each Guarantor hereby affirms and shall comply with the
representations, warranties, and covenants made by the Borrower in the Credit
Agreement to the extent that such representations, warranties, and covenants are
applicable to such Guarantor, including all of the representations and
warranties in Article V of the Credit Agreement and all of the covenants in
Article VI of the Credit Agreement.
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4.2 Each Guarantor shall pay to the Administrative Agent on demand (a) all
reasonable out-of-pocket costs and expenses of the Administrative Agent in
connection with the preparation, execution, delivery, administration,
modification, and amendment of this Agreement and the other Loan Documents to
which such Guarantor is a party, including the reasonable fees and out of pocket
expenses of outside counsel for the Administrative Agent with respect to
advising the Administrative Agent as to its rights and responsibilities under
this Agreement and the Loan Documents to which such Guarantor is a party, and
(b) all costs and expenses of the Administrative Agent in connection with the
enforcement of the Administrative Agent's rights under this Agreement and the
other Loan Documents to which such Guarantor is a party, whether through
negotiations, legal proceedings, or otherwise, including fees and expenses of
counsel for the Administrative Agent. The provisions of this paragraph shall
survive any purported termination of this Agreement and the Loan Documents that
does not expressly reference this paragraph.
4.3 Each Guarantor agrees to protect, defend, indemnify, and hold harmless
the Administrative Agent, each Lender, and each of their respective Related
Parties (collectively, the "Indemnified Parties"), from and against all demands,
claims, actions, suits, damages, judgments, fines, penalties, liabilities, and
costs and expenses, including reasonable costs of attorneys and related costs of
experts such as accountants (collectively, the "Indemnified Liabilities"),
actually incurred by the Indemnified Parties which are related to any litigation
or proceeding relating to this Agreement, the Loan Documents, or the
transactions contemplated thereunder, INCLUDING INDEMNIFIED LIABILITIES CAUSED
BY ANY INDEMNIFIED PARTIES' OWN NEGLIGENCE, but not Indemnified Liabilities
which are a result of any Indemnified Parties' gross negligence or willful
misconduct. The provisions of this paragraph shall survive any purported
termination of this Agreement and the Loan Documents that does not expressly
reference this paragraph.
4.4 If any provision in this Agreement is held to be unenforceable, such
provision shall be severed and the remaining provisions shall remain in full
force and effect. All representations, warranties, and covenants of any
Guarantor in this Agreement shall survive the execution of this Agreement and
any other contract or agreement. The Administrative Agent's remedies under this
Agreement and the Loan Documents to which any Guarantor is a party shall be
cumulative, and no delay in enforcing this Agreement and the Loan Documents to
which such Guarantor is a party shall act as a waiver of the Administrative
Agent's rights thereunder. The provisions of this Agreement may be waived or
amended only in a writing signed by the party against whom enforcement is
sought. This Agreement shall bind and inure to the benefit of each Guarantor and
the Administrative Agent and their respective successors and assigns. Each
Guarantor may not assign its rights or delegate its duties under this Agreement.
The Administrative Agent may assign its rights and delegate its duties under
this Agreement in accordance with the terms of the Credit Agreement. This
Agreement may be executed in multiple counterparts each of which shall
constitute one and the same agreement. All notices shall be given in the manner
required under Section 10.02 of the Credit Agreement to the following addresses:
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If to any Guarantor:
c/o CEC Entertainment, Inc.
0000 X. Xxxxxxx Xxxxxxx
Xxxxxx, Xxxxx 00000
Attn: Chief Financial Officer
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
with a copy to:
c/o CEC Entertainment, Inc.
0000 X. Xxxxxxx Xxxxxxx
Xxxxxx, Xxxxx 00000
Attn: Legal Department
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
If to the Administrative Agent:
Bank of America, N.A.,
as Administrative Agent under the Credit Agreement
dated as of December 3, 2002, among
ShowBiz Merchandising, L.P., the financial
institutions parties thereto, and the Administrative Agent
000 X. Xx Xxxxx Xxxxxx
XX 1-231-08-30
Xxxxxxx, XX 00000
Attn: Xxxxxxx Xxxx, Vice President
Telephone: 000-000-0000
Telecopier: 000-000-0000
4.5 Any present or future Required Guarantor may become a Guarantor under
and a party to this Agreement by executing and delivering to the Administrative
Agent the documents required by Section 6.12 of the Credit Agreement or by
otherwise assuming in writing in favor of the Administrative Agent the
liabilities of a Guarantor under this Agreement. Upon execution and delivery of
such documents or otherwise assuming the liabilities of a Guarantor under this
Agreement such Subsidiary shall be deemed to be a Guarantor under this Agreement
and a party to this Agreement for all purposes hereunder.
4.6 (a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF TEXAS APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED THAT THE ADMINISTRATIVE AGENT AND
EACH LENDER SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
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(b) THIS AGREEMENT IS PERFORMABLE IN DALLAS COUNTY, TEXAS. ANY LEGAL ACTION
OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE
BROUGHT IN THE COURTS OF THE STATE OF TEXAS SITTING IN DALLAS COUNTY OR OF THE
UNITED STATES FOR THE NORTHERN DISTRICT OF SUCH STATE, AND BY EXECUTION AND
DELIVERY OF THIS AGREEMENT, THE GUARANTOR, THE BORROWER, THE ADMINISTRATIVE
AGENT AND EACH LENDER CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO
THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. THE GUARANTOR, THE BORROWER, THE
ADMINISTRATIVE AGENT AND EACH LENDER IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING
ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR
PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT, ANY LOAN DOCUMENT
OR OTHER DOCUMENT RELATED THERETO. THE GUARANTOR, THE BORROWER, THE
ADMINISTRATIVE AGENT AND EACH LENDER WAIVES PERSONAL SERVICE OF ANY SUMMONS,
COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY
THE LAW OF SUCH STATE.
4.7 EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL
BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER ANY LOAN
DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS
OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THIS AGREEMENT, ANY LOAN
DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING
OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND
EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY
PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS
SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES
HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
4.8 Time is of the essence in the performance of this Agreement.
4.9 THIS WRITTEN AGREEMENT AND THE LOAN DOCUMENTS REPRESENT THE FINAL
AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
F-8
EXECUTED as of the date first above written.
By:_____________________________
Name:___________________________
Title:__________________________
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EXHIBIT G
OPINION MATTERS
The matters contained in the following Sections of the Credit Agreement
should be covered by the legal opinion:
Section 5.01(a), (b) and (c)
Section 5.02
Section 5.03
Section 5.04
Section 5.06
Section 5.14(b)
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EXHIBIT H
FORM OF
NEW LENDER AGREEMENT
This New Lender Agreement dated as of _____________, (this "Agreement") is
by and among ShowBiz Merchandising, L.P., a Texas limited partnership
("Borrower"), Bank of America, N.A. ("Administrative Agent"), in its capacity as
administrative agent under the Credit Agreement described below, and
___________________ (the "New Lender"). Reference is made to the Credit
Agreement dated as of December 3, 2002 (as it may be modified from time to time,
the "Credit Agreement") among Borrower, CEC Entertainment, Inc., as a Guarantor,
the Lenders from time to time party thereto, Bank One, NA, as Syndication Agent,
U.S. Bank National Association, as Co-Documentation Agent, Fleet National Bank,
as Co-Documentation Agent, and Bank of America, N.A., as Administrative Agent
and L/C Issuer. Capitalized terms used herein but not defined herein shall have
the meanings specified by the Credit Agreement.
PRELIMINARY STATEMENTS
A. Pursuant to Section 2.15 of the Credit Agreement, the Borrower has the
right, subject to the terms and conditions thereof, to add to the Credit
Agreement one or more New Lenders under the Credit Agreement.
B. The Borrower has given notice to the Administrative Agent pursuant to
Section 2.15 of the Credit Agreement of its intention to add the New Lender
to the Credit Agreement as a Lender with a Commitment of $_______________,
and the Administrative Agent is willing to consent thereto.
Accordingly, the parties hereto agree as follows:
1. Addition of New Lender. Pursuant to Section 2.15 of the Credit
Agreement, the New Lender is hereby added to the Credit Agreement as a Lender
with a Commitment of $______________. The New Lender specifies as its Lending
Office the following:
________________________________
________________________________
________________________________
Attention:______________________
Telephone:______________________
Telecopy:_______________________
2. New Note. If requested by the New Lender, the Borrower agrees to
promptly execute and deliver to the New Lender a Note in the amount of its
Commitment set forth in Section 1 above ("New Note").
3. Consent. The Administrative Agent and the Borrower hereby consent to the
addition of the New Lender effectuated hereby.
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4. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Texas.
5. Execution in Counterparts. This Agreement may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
6. Representations and Warranties of the Borrower. The Borrower represents
and warrants as follows:
(a) The execution, delivery, and performance by the Borrower of this
Agreement and the New Note and the consummation of the transactions contemplated
thereby (i) do not contravene the Organizational Documents of the Borrower, (ii)
have been duly authorized by all necessary action of the Borrower, and (iii) are
within the Borrower's powers.
(b) This Agreement has been duly executed and delivered by the Borrower and
constitutes the legal, valid, and binding obligation of the Borrower,
enforceable against the Borrower in accordance with the Agreement's terms,
except as it is hypothetically affected by (i) the effect of bankruptcy,
insolvency, reorganization, receivership, moratorium, or other similar laws
affecting the rights and remedies of creditors generally and (ii) the effect of
general principles of equity
(c) The execution, delivery, and performance by the Borrower of this
Agreement and the New Note and the consummation of the transactions contemplated
thereby, (i) do not and will not conflict with or result in any breach or
contravention of, or the creation of any Lien under, (x) any material
Contractual Obligation to which the Borrower is a party or (y) any order,
injunction, writ or decree of any Governmental Authority or any arbitral award
to which the Borrower or its property is subject, (ii) do not violate any Law,
and (iii) do not require any authorization, approval, or other action by, or any
notice to or filing with, any Governmental Authority.
(d) After giving effect to this Agreement and any other New Lender
Agreements, the Borrower will be in compliance with the limitation set forth in
the first sentence in clause (a) of Section 2.15 of the Credit Agreement.
(e) The resolutions duly adopted by the respective boards of directors of
the general partner of the Borrower and the Guarantors on [date] are sufficient
to authorize this Agreement, the New Note, and the Guaranty thereof, as
applicable, and such resolutions remain in full force and effect.
7. Representations and Warranties of the New Lender. The New Lender (a)
represents and warrants that (i) it has full power and authority, and has taken
all action necessary, to execute and deliver this New Lender Agreement and to
consummate the transactions contemplated hereby and to become a Lender under the
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Credit Agreement, (ii) from and after the date of the execution of this
Agreement, it shall be bound by the provisions of the Credit Agreement as a
Lender thereunder and, to the extent of its Commitment, shall have the
obligations of a Lender thereunder, (iii) it has received a copy of the Credit
Agreement, together with copies of the most recent financial statements
delivered pursuant to Section 6.01 thereof, as applicable, and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this New Lender Agreement on the basis of
which it has made such analysis and decision independently and without reliance
on the Administrative Agent or any other Lender, and (iv) if it is a Foreign
Lender, attached hereto is any documentation required to be delivered by it
pursuant to the terms of the Credit Agreement, duly completed and executed by
the New Lender; and (b) agrees that (i) it will, independently and without
reliance on the Administrative Agent or any other Lender, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Loan
Documents, and (ii) it will perform in accordance with their terms all of the
obligations which by the terms of the Loan Documents are required to be
performed by it as a Lender.
8. Default. Without limiting any other event that may constitute an Event
of Default, in the event any representation or warranty set forth herein shall
prove to have been incorrect or misleading in any material respect when made,
such event shall constitute an "Event of Default" under the Credit Agreement.
9. Expenses. The Borrower agrees to pay on demand all costs and expenses of
the Administrative Agent in connection with the preparation, negotiation,
execution, and delivery of this Agreement and the New Note, including, without
limitation, the reasonable fees and out-of-pocket expenses of external counsel
for the Administrative Agent with respect thereto.
10. Effectiveness. When, and only when, the Administrative Agent shall have
received counterparts of, or telecopied signature pages of, this Agreement
executed by the Borrower, the Administrative Agent, and the New Lender, this
Agreement shall become effective as of the date first written above.
11. Appointment of Administrative Agent. The New Lender hereby appoints and
authorizes the Administrative Agent to take such action as Administrative Agent
on its behalf and to exercise such powers and discretion under the Credit
Documents as are delegated to the Administrative Agent by the terms thereof,
together with such powers and discretion as are reasonably incidental thereto.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
BORROWER:
ShowBiz Merchandising, L.P.,
a Texas limited partnership
By: CEC Entertainment, Inc.,
a Kansas corporation,
its general partner
By:______________________________
Name:____________________________
Title:___________________________
ADMINISTRATIVE AGENT:
BANK OF AMERICA, N.A.
By:__________________________________
Name:________________________________
Title:_______________________________
NEW LENDER:
[NAME OF NEW LENDER]
By:__________________________________
Name:________________________________
Title:_______________________________
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EXHIBIT I
FORM OF GUARANTY
(CEC Entertainment, Inc.)
This Guaranty dated as of December 3, 2002 ("Agreement"), is made by CEC
Entertainment, Inc., a Kansas corporation ("Guarantor"), in favor of Bank of
America, N.A., in its capacity as Administrative Agent ("Administrative Agent")
for certain financial institutions which are or may become parties to the Credit
Agreement described below.
INTRODUCTION
This Agreement is given in connection with the Credit Agreement dated as of
December 3, 2002 (as modified from time to time, the "Credit Agreement"), among
ShowBiz Merchandising, L.P., a Texas limited partnership ("Borrower"),
Guarantor, certain financial institutions which are or may become parties
thereto, Bank One, NA, as Syndication Agent, U.S. Bank National Association, as
Co-Documentation Agent, Fleet National Bank, as Co-Documentation Agent, and the
Administrative Agent, the defined terms of which are used herein unless
otherwise defined herein. It is a condition precedent to the obligation of the
Lenders to make any extension of credit under the Credit Agreement that the
Guarantor execute and deliver this Agreement to the Administrative Agent. The
Borrower is a Subsidiary of the Guarantor. Because the Guarantor receives and,
as a result of its ownership of the Borrower, expects to continue to receive
financial benefits from the Borrower, the Guarantor will obtain substantial
benefit from the extensions of credit expected to be made to the Borrower under
the Credit Agreement.
Therefore, to induce the Administrative Agent and such financial
institutions to enter into the Credit Agreement, the Guarantor, jointly and
severally with all other Guarantors, agrees as follows:
Section 1. Guaranty.
The Guarantor irrevocably, and jointly and severally with all other
Guarantors, guarantees to the Administrative Agent (a) the full payment when due
of all principal, interest, fees, reimbursements, indemnifications, Attorney
Costs, and other amounts now or hereafter owed by the Borrower to the
Administrative Agent and the Lenders (and with respect to the Swap Contracts,
the Affiliates of the Administrative Agent and the Lenders) under the terms of
the Credit Agreement and the other Loan Documents, including amounts owed under
the terms of the Credit Agreement and the other Loan Documents for which the
Borrower obtains relief under bankruptcy or other laws providing for relief from
creditors, (b) the full payment when due of any increases, extensions, and
rearrangements of the foregoing obligations under any amendments, supplements,
and other modifications of the documents and agreements creating the foregoing
obligations, and (c) any and all covenants and agreements of the Borrower under
the Credit Agreement or other Loan Documents, whether presently existing or
hereinafter entered into, will be duly and promptly observed and performed
(collectively, the "Guaranteed Obligations"). This is a guaranty of payment and
not merely a guaranty of collection, and the Guarantor is liable as a primary
obligor. If any of the Guaranteed Obligations are not punctually paid or
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performed when due, whether by maturity, acceleration, or otherwise, and the
Administrative Agent shall notify the Guarantor of such default and make demand
for payment and/or performance hereunder, the Guarantor shall immediately pay to
the Administrative Agent the full amount of the Guaranteed Obligations which are
due and payable. The Guarantor shall make each payment to the Administrative
Agent in U.S. Dollars in immediately available funds as directed by the
Administrative Agent. The Administrative Agent is hereby authorized at any time
following any demand for payment hereunder to set off and apply any indebtedness
owed by the Administrative Agent to the Guarantor against any and all of the
obligations of the Guarantor under this Agreement. The Administrative Agent
agrees to promptly notify the Guarantor after any such setoff and application,
but the failure to give such notice shall not affect the validity of such setoff
and application.
Section 2. Guaranty Absolute.
2.1 This Agreement shall be deemed accepted by the Administrative Agent
upon receipt, and the obligations of the Guarantor under this Agreement are
effective immediately and are continuing and cover all Guaranteed Obligations
arising prior to and after the date hereof. This Agreement may not be revoked by
the Guarantor and shall continue to be effective with respect to Guaranteed
Obligations arising or created after any attempted revocation by the Guarantor.
2.2 The Guarantor guarantees that the Guaranteed Obligations will be paid
strictly in accordance with the terms of the Credit Agreement and the other Loan
Documents, regardless of any law, regulation, or order now or hereafter in
effect in any jurisdiction affecting any of such terms or the rights of the
Administrative Agent or the Lenders with respect thereto. The Guarantor agrees
that its obligations under this Agreement shall not be released, diminished, or
impaired by, and waives any rights which it might otherwise have which relate
to:
(a) Any lack of validity or enforceability of the Guaranteed Obligations,
any Loan Document, or any other agreement or instrument relating thereto; any
increase, reduction, extension, or rearrangement of the Guaranteed Obligations;
any amendment, supplement, or other modification of the Loan Documents; any
waiver or consent granted under the Loan Documents, including waivers of the
payment and performance of the Guaranteed Obligations; or any sale, assignment,
delegation, or other transfer of the Guaranteed Obligations or the Loan
Documents;
(b) Any grant of any security or support for the Guaranteed Obligations or
any impairment of any security or support for the Guaranteed Obligations,
including any full or partial release, exchange, subordination, or waste of any
collateral for the Guaranteed Obligations or any full or partial release of the
Borrower, any Guarantor, or any other Person liable for the payment or
performance of the Guaranteed Obligations; any change in the organization or
structure of the Borrower, any Guarantor, or any other Person liable for the
payment or performance of the Guaranteed Obligations; or the insolvency,
bankruptcy, liquidation, or dissolution of the Borrower, any Guarantor, or any
other Person liable for the payment or performance of the Guaranteed
Obligations;
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(c) The manner of applying payments on the Guaranteed Obligations or the
proceeds of any security or support for the Guaranteed Obligations against the
Guaranteed Obligations;
(d) The failure to give notice of the occurrence of any of the events or
actions referred to in this Section 2.2, notice of any Default or Event of
Default, however denominated, under the Loan Documents, notice of intent to
demand, notice of demand, notice of presentment for payment, notice of
nonpayment, notice of intent to protest, notice of protest, notice of grace,
notice of dishonor, notice of intent to accelerate, notice of acceleration,
notice of bringing of action to enforce the payment or performance of the
Guaranteed Obligations, notice of any sale or foreclosure of any collateral for
the Guaranteed Obligations, notice of any transfer of the Guaranteed
Obligations, notice of the financial condition of or other circumstances
regarding the Borrower, any Guarantor, or any other Person liable for the
Guaranteed Obligations, or any other notice of any kind relating to the
Guaranteed Obligations (and the parties intend that no Guarantor shall be
considered a "Debtor" as defined in Section 9.102 of the Texas Business and
Commerce Code for the purpose of notices required to be given to a Debtor under
such code); or
(e) Any other action taken or omitted which affects the Guaranteed
Obligations, whether or not such action or omission prejudices the Guarantor or
increases the likelihood that the Guarantor will be required to pay the
Guaranteed Obligations pursuant to the terms hereof--it is the unambiguous and
unequivocal intention of the Guarantor that it shall be obligated to pay the
Guaranteed Obligations when due, notwithstanding any occurrence, circumstance,
event, action, or omission whatsoever, whether contemplated or uncontemplated,
and whether or not particularly described herein.
2.3 This Agreement shall continue to be effective or be reinstated, as the
case may be, if any payment on the Guaranteed Obligations must be refunded for
any reason including any bankruptcy proceeding. In the event that the
Administrative Agent or any Lender must refund any payment received against the
Guaranteed Obligations, any prior release from the terms of this Agreement given
to the Guarantor by the Administrative Agent shall be without effect, and this
Agreement shall be reinstated in full force and effect. It is the intention of
the Guarantor that its obligations hereunder shall not be discharged except by
final payment of the Guaranteed Obligations.
2.4 (a) The Borrower is a Subsidiary of the Guarantor and the Guarantor
receives and, because of its ownership of the Borrower, expects to continue to
receive business opportunities and financial benefits from the Borrower. The
Guarantor has agreed to enter into this Agreement so that the Borrower can
receive the benefits of the Guaranteed Obligations and continue to provide these
services to the Guarantor.
(b) If it is judicially determined with respect to the Guarantor that
entering into this Agreement would violate Section 548 of the United States
Bankruptcy Code or any comparable provisions of any state law, then the
Guarantor shall be liable under this Guaranty only for amounts aggregating up to
the largest amount that would not render the Guarantor=s obligations hereunder
subject to avoidance under Section 548 of the United States Bankruptcy Code or
any comparable provisions of any state law.
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(c) The Guarantor agrees that each Guarantor shall have rights of
contribution and subrogation against each other Guarantor with respect to any
payments made in connection with the Guaranteed Obligations.
Section 3. Unimpaired Collection.
3.1 There are no conditions precedent to the enforcement of this Agreement,
except as expressly contained herein. It shall not be necessary for the
Administrative Agent, in order to enforce payment by the Guarantor under this
Agreement, to show any proof of the Borrower's default, to exhaust the
Administrative Agent's remedies against the Borrower, any Guarantor, or any
other Person liable for the payment or performance of the Guaranteed
Obligations, to enforce any security or support for the payment or performance
of the Guaranteed Obligations, or to enforce any other means of obtaining
payment or performance of the Guaranteed Obligations. The Guarantor waives any
rights under Chapter 34 of the Texas Business and Commerce Code, Section 17.001
of the Texas Civil Practice and Remedies Code, and Rule 31 of the Texas Rules of
Civil Procedure related to the foregoing. Neither the Administrative Agent nor
the Lenders shall be required to mitigate damages or take any other action to
reduce, collect, or enforce the Guaranteed Obligations.
3.2 All Subordinated Obligations of the Guarantor (as defined below) shall
be subordinate and junior in right of payment and collection to the payment and
collection in full of all Guaranteed Obligations as described below:
(a) As used herein, the term "Subordinated Obligations" for the Guarantor
means: (i) all present and future indebtedness, liabilities, and obligations of
any kind owed by the Borrower, any Guarantor, or any other Person liable for the
payment or performance of the Guaranteed Obligations to the Guarantor, including
debt obligations, equity obligations, and other contractual obligations
requiring payments of any kind to be made to the Guarantor and including any
right of subrogation (including any statutory rights of subrogation under
Section 509 of the Bankruptcy Code, 11 U.S.C. ' 509, or under Chapter 34 of the
Texas Business and Commerce Code), contribution, indemnification, reimbursement,
exoneration, or any right to participate in any claim or remedy of the
Administrative Agent against the Borrower, any Guarantor, or any Person liable
for the payment or performance of the Guaranteed Obligations, or any collateral
which the Administrative Agent now has or may acquire, and (ii) any increases,
extensions, and rearrangements of the foregoing obligations under any
amendments, supplements, and other modifications of the documents and agreements
creating the foregoing obligations.
(b) Until all Guaranteed Obligations have been irrevocably paid in full
(and therefore the payment thereof is no longer subject to being set aside or
returned under the law), the Guarantor agrees not to take any action to enforce
payment of the Subordinated Obligations of the Guarantor, but this standstill is
not intended as a permanent waiver of the subrogation, contribution,
indemnification, reimbursement, exoneration, participation, or other rights of
the Guarantor.
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(c) Upon any receivership, insolvency proceeding, bankruptcy proceeding,
assignment for the benefit of creditors, reorganization, arrangement with
creditors, sale of assets for creditors, dissolution, liquidation, or marshaling
of the assets of the Borrower, any Guarantor, or any other Person liable for the
payment or performance of the Guaranteed Obligations, all amounts due with
respect to the Guaranteed Obligations shall be paid in full before the Guarantor
shall be entitled to collect or receive any payment with respect to the
Subordinated Obligations of the Guarantor, and all payments to which the
Guarantor would be entitled to collect or receive on the Subordinated
Obligations of the Guarantor shall be paid over to the Administrative Agent for
application to the Guaranteed Obligations.
(d) Following written notice from the Administrative Agent to the Borrower
that a Default or an Event of Default has occurred and is continuing and that no
further payments shall be made on the Subordinated Obligations of the Guarantor
until (i) all amounts due with respect to the Guaranteed Obligations shall be
paid in full or (ii) the Administrative Agent revokes such notice, the Guarantor
shall not be entitled to collect or receive any payment with respect to the
Subordinated Obligations of the Guarantor.
(e) If applicable, any lien, security interest, or assignment securing the
repayment of the Subordinated Obligations of the Guarantor shall be fully
subordinate to any lien, security interest, or assignment, if applicable, in
favor of the Administrative Agent which secures the Guaranteed Obligations. At
the request of the Administrative Agent, the Guarantor will take any and all
steps necessary to fully evidence the subordination granted hereunder, including
amending or terminating financing statements and executing and recording
subordinations of liens.
(f) This is an absolute and irrevocable agreement of subordination and the
Administrative Agent may, without notice to the Guarantor, take any action
described in Section 2.2 without impairing or releasing the obligations of the
Guarantor hereunder.
(g) The Guarantor shall not assign or otherwise transfer to any other
Person any interest in the Subordinated Obligations of the Guarantor unless the
Guarantor causes the assignee or other transferee to execute and deliver to the
Administrative Agent a subordination agreement in substantially the form of the
subordination provisions in this Agreement.
(h) If any amount shall be paid to the Guarantor in violation of this
Section 3.2, such amount shall be held in trust for the benefit of the
Administrative Agent and immediately turned over to the Administrative Agent,
with any necessary endorsement, to be applied to the Guaranteed Obligations.
Section 4. Miscellaneous.
4.1 The Guarantor hereby affirms and shall comply with the representations,
warranties, and covenants made by the Borrower in the Credit Agreement to the
extent that such representations, warranties, and covenants are applicable to
the Guarantor, including all of the representations and warranties in Article V
of the Credit Agreement and all of the covenants in Article VI and Article VII
of the Credit Agreement.
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4.2 The Guarantor shall pay to the Administrative Agent on demand (a) all
reasonable out-of-pocket costs and expenses of the Administrative Agent in
connection with the preparation, execution, delivery, administration,
modification, and amendment of this Agreement and the other Loan Documents to
which any Guarantor is a party, including the reasonable fees and out of pocket
expenses of outside counsel for the Administrative Agent with respect to
advising the Administrative Agent as to its rights and responsibilities under
this Agreement and the Loan Documents to which any Guarantor is a party, and (b)
all costs and expenses of the Administrative Agent in connection with the
enforcement of the Administrative Agent's rights under this Agreement and the
other Loan Documents to which any Guarantor is a party, whether through
negotiations, legal proceedings, or otherwise, including fees and expenses of
counsel for the Administrative Agent. The provisions of this paragraph shall
survive any purported termination of this Agreement and the Loan Documents that
does not expressly reference this paragraph.
4.3 The Guarantor agrees to protect, defend, indemnify, and hold harmless
the Administrative Agent, each Lender, and each of their respective Related
Parties (collectively, the "Indemnified Parties"), from and against all demands,
claims, actions, suits, damages, judgments, fines, penalties, liabilities, and
costs and expenses, including reasonable costs of attorneys and related costs of
experts such as accountants (collectively, the "Indemnified Liabilities"),
actually incurred by the Indemnified Parties which are related to any litigation
or proceeding relating to this Agreement, the Loan Documents, or the
transactions contemplated thereunder, INCLUDING INDEMNIFIED LIABILITIES CAUSED
BY ANY INDEMNIFIED PARTIES' OWN NEGLIGENCE, but not Indemnified Liabilities
which are a result of any Indemnified Parties' gross negligence or willful
misconduct. The provisions of this paragraph shall survive any purported
termination of this Agreement and the Loan Documents that does not expressly
reference this paragraph.
4.4 If any provision in this Agreement is held to be unenforceable, such
provision shall be severed and the remaining provisions shall remain in full
force and effect. All representations, warranties, and covenants of the
Guarantor in this Agreement shall survive the execution of this Agreement and
any other contract or agreement. The Administrative Agent's remedies under this
Agreement and the Loan Documents to which the Guarantor is a party shall be
cumulative, and no delay in enforcing this Agreement and the Loan Documents to
which the Guarantor is a party shall act as a waiver of the Administrative
Agent's rights thereunder. The provisions of this Agreement may be waived or
amended only in a writing signed by the party against whom enforcement is
sought. This Agreement shall bind and inure to the benefit of the Guarantor and
the Administrative Agent and their respective successors and assigns. The
Guarantor may not assign its rights or delegate its duties under this Agreement.
The Administrative Agent may assign its rights and delegate its duties under
this Agreement in accordance with the terms of the Credit Agreement. This
Agreement may be executed in multiple counterparts each of which shall
constitute one and the same agreement. All notices shall be given in the manner
required under Section 10.02 of the Credit Agreement to the following addresses:
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If to the Guarantor:
CEC Entertainment, Inc.
0000 X. Xxxxxxx Xxxxxxx
Xxxxxx, Xxxxx 00000
Attn: Chief Financial Officer
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
with a copy to:
CEC Entertainment, Inc.
0000 X. Xxxxxxx Xxxxxxx
Xxxxxx, Xxxxx 00000
Attn: Legal Department
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
If to the Administrative Agent:
Bank of America, N.A.,
as Administrative Agent under the Credit Agreement
dated as of December 3, 2002, among ShowBiz Merchandising, L.P.,
CEC Entertainment, Inc., the financial
institutions parties thereto, and the Administrative Agent
000 X. Xx Xxxxx Xxxxxx
XX 1-231-08-30
Xxxxxxx, XX 00000
Attn: Xxxxxxx Xxxx, Vice President
Telephone: 000-000-0000
Telecopier: 000-000-0000
4.5 (a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF TEXAS APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED THAT THE ADMINISTRATIVE AGENT AND
EACH LENDER SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
(b) THIS AGREEMENT IS PERFORMABLE IN DALLAS COUNTY, TEXAS. ANY LEGAL ACTION
OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE
BROUGHT IN THE COURTS OF THE STATE OF TEXAS SITTING IN DALLAS COUNTY OR OF THE
UNITED STATES FOR THE NORTHERN DISTRICT OF SUCH STATE, AND BY EXECUTION AND
DELIVERY OF THIS AGREEMENT, THE GUARANTOR, THE BORROWER, THE ADMINISTRATIVE
AGENT AND EACH LENDER CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO
THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. THE GUARANTOR, THE BORROWER, THE
ADMINISTRATIVE AGENT AND EACH LENDER IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING
ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR
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PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT, ANY LOAN DOCUMENT
OR OTHER DOCUMENT RELATED THERETO. THE GUARANTOR, THE BORROWER, THE
ADMINISTRATIVE AGENT AND EACH LENDER WAIVES PERSONAL SERVICE OF ANY SUMMONS,
COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY
THE LAW OF SUCH STATE.
4.6 EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL
BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER ANY LOAN
DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS
OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THIS AGREEMENT, ANY LOAN
DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING
OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND
EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY
PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS
SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES
HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
4.7 Time is of the essence in the performance of this Agreement.
4.8 THIS WRITTEN AGREEMENT AND THE LOAN DOCUMENTS REPRESENT THE FINAL
AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
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EXECUTED as of the date first above written.
CEC Entertainment, Inc.,
a Kansas corporation
By:__________________________________
Xxxxxx Xxxxxx,
Executive Vice President &
Chief Financial Officer
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