EXECUTION COPY
$40,000,000
AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of September 6, 2000
Among
SHONEY'S, INC.
as Borrower,
-- ---------
THE INITIAL LENDERS AND INITIAL
ISSUING BANK NAMED HEREIN
as Initial Lenders and Initial Issuing Bank,
-- ------- ------- --- ------- ------- -----
BANK OF AMERICA, N.A.
as Administrative Agent
-- -------------- -----
and
BANC OF AMERICA SECURITIES, L.L.C.
as Syndication Agent
-- ----------- -----
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T A B L E O F C O N T E N T S
SECTION PAGE
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms......................................1
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
AND THE LETTERS OF CREDIT
SECTION 2.01. The Advances..............................................23
SECTION 2.02. Making the Advances.......................................24
SECTION 2.03. Issuance of and Drawings and Reimbursement Under
Letters of Credit.........................................26
SECTION 2.04. Repayment of Advances.....................................28
SECTION 2.05. Termination or Reduction of the Commitments...............29
SECTION 2.06. Prepayments...............................................30
SECTION 2.07. Interest..................................................31
SECTION 2.08. Fees......................................................32
SECTION 2.09. Conversion of Advances....................................33
SECTION 2.10. Increased Costs, Etc......................................34
SECTION 2.11. Payments and Computations.................................35
SECTION 2.12. Taxes.....................................................37
SECTION 2.13. Sharing of Payments, Etc..................................39
SECTION 2.14. Use of Proceeds and Issuance of Letters of Credit.........40
SECTION 2.15. Defaulting Lenders........................................40
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. Conditions Precedent to Effective Date....................43
SECTION 3.02. Conditions Precedent to Each Borrowing and Issuance.......47
SECTION 3.03. Determinations Under Section 3.01.........................48
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower............48
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants.....................................55
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SECTION 5.02. Negative Covenants........................................65
SECTION 5.03. Reporting Requirements....................................72
SECTION 5.04. Financial Covenants.......................................76
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default.........................................77
SECTION 6.02. Actions in Respect of the Letters of Credit upon Default..80
ARTICLE VII
THE ADMINISTRATIVE AGENT
SECTION 7.01. Authorization and Action..................................80
SECTION 7.02. Agent's Reliance, Etc.....................................81
SECTION 7.03. Bank of America and Affiliates............................81
SECTION 7.04. Lender Party Credit Decision..............................82
SECTION 7.05. Indemnification...........................................82
SECTION 7.06. Successor Agents..........................................84
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc...........................................84
SECTION 8.02. Notices, Etc..............................................86
SECTION 8.03. No Waiver; Remedies.......................................86
SECTION 8.04. Costs, Expenses...........................................86
SECTION 8.05. Right of Set-off..........................................88
SECTION 8.06. Binding Effect............................................88
SECTION 8.07. Assignments and Participations............................88
SECTION 8.08. Execution in Counterparts.................................91
SECTION 8.09. No Liability of the Issuing Bank..........................92
SECTION 8.10. Confidentiality...........................................92
SECTION 8.11. Jurisdiction, Etc.........................................92
SECTION 8.12. Governing Law.............................................93
SECTION 8.13. Designation as Senior Indebtedness........................93
SECTION 8.14. Waiver of Jury Trial......................................93
SECTION 8.15. Real Estate Financing.....................................93
SCHEDULES
Schedule I - Commitments and Applicable Lending Offices
Schedule 2.06 - Real Properties Securing Working Capital
Advances made by Columbus Bank and Trust
Company
Schedule 3.01(d) - Disclosed Litigation
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Schedule 4.01(b) - Subsidiaries
Schedule 4.01(m) - Plans, Multiemployer Plans and Welfare Plans
Schedule 4.01(v) - Environmental Lists
Schedule 4.01(aa) - Open Years
Schedule 4.01(gg) - Existing Debt
Schedule 4.01(hh) - Surviving Debt
Schedule 4.01(ii) - Owned Real Property
Schedule 4.01(jj) - Leased Real Property
Schedule 4.01(kk) - Investments
Schedule 5.01(n) - Real Properties to be Mortgaged
Schedule 5.02(a) - Existing Liens
Schedule 5.02(n) - Partnerships
EXHIBITS
Exhibit A - Form of Working Capital Note
Exhibit B - Form of Notice of Borrowing
Exhibit C - Form of Assignment and Acceptance
Exhibit D - Form of Security Agreement
Exhibit E - Form of Intellectual Property Security Agreement
Exhibit F-1 - Form of Subsidiary Guaranty
Exhibit F-2 - Form of Shareholder's Guaranty
Exhibit G - Form of Deeds of Trust, Trust Deeds and Mortgages
Exhibit H-1 - Form of Opinion of Borrower's Counsel
Exhibit H-2 - Form of Opinion of Borrower's Special New York
Counsel
Exhibit I - Form of Solvency Certificate
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Exhibit J - Form of Consolidated Income Statement for Fiscal
Month
Exhibit K - Subordination Terms
Exhibit L - Master Lease
AMENDED AND RESTATED CREDIT AGREEMENT
AMENDED AND RESTATED CREDIT AGREEMENT dated as of September 6, 2000
among SHONEY'S, INC., a Tennessee corporation (the "Borrower"), the banks,
financial institutions and other institutional lenders listed on the
signature pages hereof as the Initial Lenders (the "Initial Lenders"), BANK
OF AMERICA, N.A. ("Bank of America"), as the initial issuing bank (in such
capacity, the "Initial Issuing Bank"), BANK OF AMERICA, N.A., as
administrative agent (together with any successor appointed pursuant to
Article VII, the "Administrative Agent") for the Lender Parties (as
hereinafter defined), and BANC OF AMERICA SECURITIES, L.L.C. ("BAS"), as lead
arranger and sole book manager (in such capacity, the "Arranger") and as
syndication agent (in such capacity, the "Syndication Agent") for the Lender
Parties.
PRELIMINARY STATEMENTS:
(1) The Borrower entered into a Credit Agreement dated as of November
28, 1997, as heretofore amended (said agreement, as so amended, being the
"Existing Credit Agreement") with the banks, financial institutions and other
institutional lenders party thereto (the "Existing Lenders") and Bank of
America, as administrative agent.
(2) The Borrower is currently engaged in a Restructuring (as
hereinafter defined) that will require it to obtain the Commissary Financing
(as hereinafter defined), the Captain D's Financing (as hereinafter defined)
and the Real Estate Financing (as hereinafter defined).
(3) In order to consummate the Restructuring and the related
financings, the Borrower has requested that the Initial Lenders hereunder
enter into this Agreement to amend and restate the Existing Credit Agreement
and lend to the borrower an aggregate principal amount of up to $40,000,000.
The Initial Lenders hereunder have indicated their willingness to amend and
restate the Existing Credit Agreement and to agree to lend such amounts on
the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, the parties hereto hereby agree
that, subject to the satisfaction of the conditions set forth in Section
3.01, the Existing Credit Agreement is amended and restated in its entirety
to read as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be
equally applicable to both the singular and plural forms of the terms
defined):
"Adjusted EBITDA" means, for any period, the sum, determined on a
Consolidated basis, of (a) net income (or net loss), plus (b) interest
expense, plus (c)
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income tax expense, plus (d) depreciation expense, plus (e) amortization
expense, plus (f) all non-cash losses and charges deducted in arriving at
such net income, less (g) all non-cash gains included in arriving at such net
income, plus (h) all amounts received or to be received in cash by the
Borrower for such period pursuant to the Tax Sharing Agreement (so long as
such amounts were received on or prior to the date on which the financial
statements for such period are required to be delivered pursuant to Section
5.03), less (i) income tax benefits, in each case of the Borrower and its
Subsidiaries (other than Captain D's, COI and their respective Subsidiaries),
determined in accordance with GAAP for such period.
"Administrative Agent" has the meaning specified in the recital of
parties to this Agreement.
"Administrative Agent's Account" means the account of the Administrative
Agent maintained by the Administrative Agent with Bank of America at its
office at 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxxxx Center, 15th Floor, Xxxxxxxxx,
XX 00000, ABA No. 000000000, Account No. 136621-0000000, Attention: Corporate
Credit Services, Ref: Shoney's.
"Administrative Service Agreements" means, collectively, the
administrative services agreements entered into from time to time regarding
services to be provided by the Borrower to Captain D's and its Affiliates,
including, without limitation, accounting, real estate, human resources and
general and administrative services; provided that the total payments made in
the first full Fiscal Year following the Closing Date (and a pro rated
portion prior thereto) may not exceed $9,500,000 and after such first full
Fiscal Year, increasing by $500,000 (or a pro rated portion for a partial
year) each year thereafter.
"Advance" means a Working Capital Advance or a Letter of Credit Advance.
"Affiliate" means, as to any Person, any other Person that, directly or
indirectly, controls, is controlled by or is under common control with such
Person or is a director or officer of such Person. For purposes of this
definition, the term "control" (including the terms "controlling,"
"controlled by" and "under common control with") of a Person means the
possession, direct or indirect, of the power to vote 10% or more of the
Voting Interests of such Person or to direct or cause the direction of the
management and policies of such Person, whether through the ownership of
Voting Interests, by contract or otherwise.
"Applicable Lending Office" means, with respect to each Lender Party,
such Lender Party's Domestic Lending Office in the case of a Prime Rate
Advance and such Lender Party's Eurodollar Lending Office in the case of a
Eurodollar Rate Advance.
"Applicable Margin" means 4.25% per annum in the case of Eurodollar
Advances and 3.25% per annum in the case of Prime Rate Advances; provided,
however, that the Applicable Margin shall be 0.25% per annum in the case of
Eurodollar Advances and 0.00% per annum in the case of Prime Rate Advances to
the extent such Advances are
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secured by cash collateral on deposit in the Cash Collateral Account or by
unconditional and irrevocable standby letters of credit issued by a financial
institution acceptable to the Administrative Agent for the benefit of the
Administrative Agent.
"Appropriate Lender" means, at any time, with respect to (a) the Working
Capital Facility, a Lender that has a commitment with respect to such
Facility at such time, and (b) the Letter of Credit Facility, (i) the Issuing
Bank and (ii) if the other Working Capital Lenders have made Letter of Credit
Advances pursuant to Section 2.03(c) that are outstanding at such time, each
such other Working Capital Lender.
"Approved Fund" means, with respect to any Lender that is a fund that
invests in bank loans, any other fund that invests in bank loans and is
advised or managed by the same investment advisor as such Lender or by an
Affiliate of such investment advisor.
"Arranger" has the meaning specified in the recital of parties to this
Agreement.
"Assignment and Acceptance" means an assignment and acceptance entered
into by a Lender Party and an Eligible Assignee, and accepted by the
Administrative Agent, in accordance with Section 8.07 and in substantially
the form of Exhibit C hereto.
"Available Amount" of any Letter of Credit means, at any time, the
maximum amount available to be drawn under such Letter of Credit at such time
(assuming compliance at such time with all conditions to drawing).
"BAS" has the meaning specified in the recital of parties to this
Agreement.
"Bank of America" has the meaning specified in the recital of parties to
this Agreement.
"Borrower" has the meaning specified in the recital of parties to this
Agreement.
"Borrower's Account" means the account of the Borrower maintained by the
Borrower with Bank of America at its office at 000 Xxxxx Xxxxx Xxxxxx,
Xxxxxxxxxxxx Center, 00xx Xxxxx, Xxxxxxxxx, XX 00000, Account No. 375-001-
4916.
"Borrowing" means a Working Capital Borrowing.
"Business Day" means a day of the year on which banks are not required
or authorized by law to close in Charlotte, North Carolina or New York, New
York and, if the applicable Business Day relates to any Eurodollar Rate
Advances, on which dealings are carried on in the London interbank market.
"Capital Expenditures" means, for any Person for any period, the sum of
(a) all expenditures made, directly or indirectly, by such Person or any of
its Subsidiaries during such period for equipment, fixed assets, real
property or improvements, or for replacements or substitutions therefor or
additions thereto, that have been or should be, in accordance with GAAP,
reflected as additions to property, plant or equipment on a
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Consolidated balance sheet of such Person, excluding any such expenditures
made by the Borrower or any of its Subsidiaries with respect to intercompany
transfers of assets or property in connection with the Restructuring plus
(without duplication) (b) the aggregate principal amount of all Debt
(including Obligations under Capitalized Leases) assumed or incurred in
connection with any such expenditures. For purposes of this definition,
expenditures made for assets of the type described in clause (a) of the
immediately preceding sentence that are purchased simultaneously with the
trade-in of existing assets or with insurance proceeds shall be included in
Capital Expenditures only to the extent of the gross amount of such purchase
price less the credit granted by the seller of such assets for the assets
being traded in at such time or the amount of such insurance proceeds, as the
case may be.
"Capitalized Leases" means all leases that have been or should be, in
accordance with GAAP, recorded as capitalized leases.
"Captain D's" means Captain D's, Inc., a Delaware corporation.
"Captain D's Financing" means the $135 million credit facilities made
available to Captain D's pursuant to a Credit Agreement dated the date hereof
among Captain D's, Bank of America as administrative agent and the other
financial institutions party thereto, as amended from time to time.
"Cash Collateral Account" has the meaning specified in the Security
Agreement.
"Cash Equivalents" means any of the following, to the extent owned by
the Borrower or any of its Subsidiaries free and clear of all Liens other
than Liens created under the Collateral Documents and having a maturity of
not greater than one year from the date of acquisition thereof: (a) readily
marketable direct obligations of the Government of the United States or any
agency or instrumentality thereof or obligations unconditionally guaranteed
by the full faith and credit of the Government of the United States, (b)
insured certificates of deposit of or time deposits with any commercial bank
that (i) is a Lender Party or a member of the Federal Reserve System, (ii)
issues (or the parent of which issues) commercial paper rated as described in
clause (c), (iii) is organized under the laws of the United States or any
State thereof and (iv) has combined capital and surplus of at least $1
billion, (c) commercial paper in an aggregate amount of no more than
$1,000,000 per issuer outstanding at any time, issued by any corporation
organized under the laws of any State of the United States and rated at least
"Prime-1" (or the then equivalent grade) by Xxxxx'x Investors Service, Inc.
or "A-1" (or the then equivalent grade) by Standard & Poor's Ratings
Services, a division of The XxXxxx-Xxxx Companies, Inc. or (d) any repurchase
agreement entered into with either any Lender Party or any other commercial
banking institution of the nature referred to in clause (b), secured by a
fully perfected Lien in any obligation of the type described in any of
clauses (a) through (c), having a market value at the time such repurchase
agreement is entered into of not less than 100% of the repurchase obligation
thereunder of such Lender Party or other commercial banking institution.
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"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended from time to time.
"CERCLIS" means the Comprehensive Environmental Response, Compensation
and Liability Information System maintained by the U.S. Environmental
Protection Agency.
"COI" means Commissary Operations, Inc., a Tennessee corporation.
"Collateral" means all "Collateral" referred to in the Collateral
Documents and all other property that is or is intended to be subject to any
Lien in favor of the Administrative Agent for the benefit of the Secured
Parties.
"Collateral Documents" means the Security Agreement, the Intellectual
Property Security Agreement, the Mortgages and any other agreement that
creates or purports to create a Lien in favor of the Administrative Agent for
the benefit of the Secured Parties.
"Collateral Grantor" means the Borrower and each Subsidiary Guarantor.
"Commissary Financing" means the $30 million revolving credit facility
made available to COI.
"Commitment" means a Working Capital Commitment or a Letter of Credit
Commitment.
"Confidential Information" means information that the Borrower furnishes
to the Administrative Agent or any Lender Party on a confidential basis, but
does not include any such information that is or becomes generally available
to the public other than as a result of a breach by the Administrative Agent
or any Lender Party of its obligations hereunder or that is or becomes
available to the Administrative Agent or such Lender Party from a source
other than the Borrower that is not, to the best of the Administrative
Agent's or such Lender Party's knowledge, acting in violation of a
confidentiality agreement with the Borrower.
"Consolidated" refers to the consolidation of accounts in accordance
with GAAP.
"Contingent Obligation" means, with respect to any Person, any
Obligation or arrangement of such Person to guarantee or intended to
guarantee any Debt, leases, dividends or other payment Obligations ("primary
obligations") of any other Person (the "primary obligor") in any manner,
whether directly or indirectly, including, without limitation, (a) the direct
or indirect guarantee, endorsement (other than for collection or deposit in
the ordinary course of business), co-making, discounting with recourse or
sale with recourse by such Person of the Obligation of a primary obligor, (b)
the Obligation to make take-or-pay or similar payments, if required,
regardless of nonperformance by any other party or parties to an agreement or
(c) any Obligation of such Person, whether or not contingent, (i) to purchase
any such primary obligation or any property constituting direct or indirect
security therefor, (ii) to advance or supply funds (A) for the purchase or
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payment of any such primary obligation or (B) to maintain revolving credit or
equity capital of the primary obligor or otherwise to maintain the net worth
or solvency of the primary obligor, (iii) to purchase property, assets,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment
of such primary obligation or (iv) otherwise to assure or hold harmless the
holder of such primary obligation against loss in respect thereof. The
amount of any Contingent Obligation shall be deemed to be an amount equal to
the stated or determinable amount of the primary obligation in respect of
which such Contingent Obligation is made (or, if less, the maximum amount of
such primary obligation for which such Person may be liable pursuant to the
terms of the instrument evidencing such Contingent Obligation) or, if not
stated or determinable, the maximum reasonably anticipated liability in
respect thereof (assuming such Person is required to perform thereunder), as
determined by such Person in good faith.
"Conversion", "Convert" and "Converted" each refer to a conversion of
Advances of one Type into Advances of the other Type pursuant to Section 2.09
or 2.10.
"Current Assets" of any Person means all assets of such Person that
would, in accordance with GAAP, be classified as current assets of a company
conducting a business the same as or similar to that of such Person, after
deducting adequate reserves in each case in which a reserve is proper in
accordance with GAAP.
"Current Liabilities" of any Person means (a) all Debt of such Person
that by its terms is payable on demand or matures within one year after the
date of creation (excluding any Debt renewable or extendible, at the option
of such Person, to a date more than one year from such date or arising under
a revolving credit or similar agreement that obligates the lender or lenders
thereunder to extend credit during a period of more than one year from such
date) and (b) all other items (including taxes accrued as estimated) that in
accordance with GAAP would be classified as current liabilities of such
Person.
"Debentures" means those certain subordinated and unsecured debentures
originally issued by TPI Enterprises, Inc. and subsequently assumed by the
Borrower pursuant to the Indenture in the original principal amount of Fifty-
One Million Five Hundred Sixty-Three Thousand Dollars ($51,563,000), which
are designated 8.25% Convertible Subordinated Debentures due 2002.
"Debt" of any Person means, without duplication, (a) all indebtedness of
such Person for borrowed money, (b) all Obligations of such Person for the
deferred purchase price of property or services (other than trade payables
not overdue by more than 60 days incurred in the ordinary course of such
Person's business), (c) all Obligations of such Person evidenced by notes,
bonds, debentures or other similar instruments, (d) all Obligations of such
Person created or arising under any conditional sale or other title retention
agreement with respect to property acquired by such Person (even though the
rights and remedies of the seller or lender under such agreement in the event
of default are limited to repossession or sale of such property), (e) all
Obligations of such Person as lessee under Capitalized Leases, (f) all
Obligations, contingent or otherwise, of such
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Person under acceptance, letter of credit or similar facilities, (g) all
Obligations of such Person to purchase, redeem, retire, defease or otherwise
make any payment in respect of any Equity Interests in such Person or any
other Person or any warrants, rights or options to acquire such capital
stock, valued, in the case of Redeemable Preferred Stock, at the greater of
its voluntary or involuntary liquidation preference plus accrued and unpaid
dividends, (h) all Obligations of such Person in respect of Hedge Agreements,
(i) all Contingent Obligations of such Person, and (j) all Debt referred to
in clauses (a) through (i) above of another Person secured by (or for which
the holder of such Debt has an existing right, contingent or otherwise, to be
secured by) any Lien on property (including, without limitation, accounts and
contract rights) owned by such Person, even though such Person has not
assumed or become liable for the payment of such Debt.
"Debt for Borrowed Money" of any Person means all items that in
accordance with GAAP would be classified as debt on the Consolidated balance
sheet of such Person.
"Default" means any Event of Default or any event that would constitute
an Event of Default but for the requirement that notice be given or time
elapse or both.
"Defaulted Advance" means, with respect to any Lender Party at any time,
the portion of any Advance required to be made by such Lender Party to the
Borrower pursuant to Section 2.01 or 2.02 at or prior to such time which has
not been made by such Lender Party or by the Administrative Agent for the
account of such Lender Party pursuant to Section 2.02(d) as of such time. In
the event that a portion of a Defaulted Advance shall be deemed made pursuant
to Section 2.15(a), the remaining portion of such Defaulted Advance shall be
considered a Defaulted Advance originally required to be made pursuant to
Section 2.01 or 2.02 on the same date as the Defaulted Advance so deemed made
in part.
"Defaulted Amount" means, with respect to any Lender Party at any time,
any amount required to be paid by such Lender Party to the Administrative
Agent or any other Lender Party hereunder or under any other Loan Document at
or prior to such time which has not been so paid as of such time, including,
without limitation, any amount required to be paid by such Lender Party to
(a) the Issuing Bank pursuant to Section 2.03(c) to purchase a portion of a
Letter of Credit Advance made by the Issuing Bank, (b) the Administrative
Agent pursuant to Section 2.02(d) to reimburse the Administrative Agent for
the amount of any Advance made by the Administrative Agent for the account of
such Lender Party, (c) any other Lender Party pursuant to Section 2.13 to
purchase any participation in Advances owing to such other Lender Party and
(d) the Administrative Agent or the Issuing Bank pursuant to Section 7.05 to
reimburse the Administrative Agent or the Issuing Bank for such Lender
Party's ratable share of any amount required to be paid by the Lender Parties
to the Administrative Agent or the Issuing Bank as provided therein. In the
event that a portion of a Defaulted Amount shall be deemed paid pursuant to
Section 2.15(b), the remaining portion of such Defaulted Amount shall be
considered a Defaulted Amount originally required to be paid hereunder
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or under any other Loan Document on the same date as the Defaulted Amount so
deemed paid in part.
"Defaulting Lender" means, at any time, any Lender Party that, at such
time, (a) owes a Defaulted Advance or a Defaulted Amount or (b) shall take
any action or be the subject of any action or proceeding of a type described
in Section 6.01(f).
"Disclosed Litigation" has the meaning specified in Section 3.01(d).
"Domestic Lending Office" means, with respect to any Lender Party, the
office of such Lender Party specified as its "Domestic Lending Office"
opposite its name on Schedule I hereto or in the Assignment and Acceptance
pursuant to which it became a Lender Party, as the case may be, or such other
office of such Lender Party as such Lender Party may from time to time
specify as its "Domestic Lending Office" to the Borrower and the
Administrative Agent.
"Domestic Subsidiary" means any Subsidiary other than a Foreign
Subsidiary.
"EBITDA" means, for any period, the sum, determined on a consolidated
basis, of (a) net income (or net loss), plus (b) interest expense, plus (c)
income tax expense, plus (d) depreciation expense, plus (e) amortization
expense, plus (f) all non-cash losses and charges deducted in arriving at
such net income, less (g) all non-cash gains included in arriving at such net
income, less (h) income tax benefits, in each case of the Borrower and its
Subsidiaries (other than Captain D's, COI and their respective Subsidiaries),
determined in accordance with GAAP for such period.
"Effective Date" has the meaning set forth in Section 3.01.
"Eligible Assignee" means (a) with respect to the Revolving Credit
Facility, (i) a Lender; (ii) an Affiliate of a Lender; (iii) a commercial
bank organized under the laws of the United States, or any State thereof, and
having total assets in excess of $500,000,000; (iv) a savings and loan
association or savings bank organized under the laws of the United States, or
any State thereof, and having total assets in excess of $500,000,000; (v) a
commercial bank organized under the laws of any other country that is a
member of the OECD or has concluded special lending arrangements with the
International Monetary Fund associated with its General Arrangements to
Borrow, or a political subdivision of any such country, and having total
assets in excess of $500,000,000, so long as such bank is acting through a
branch or agency located in the United States; (vi) the central bank of any
country that is a member of the OECD; (vii) a finance company, insurance
company or other financial institution or fund (whether a corporation,
partnership, trust or other entity) that is engaged in making, purchasing or
otherwise investing in commercial loans in the ordinary course of its
business and having total assets in excess of $250,000,000; and (viii) any
other Person approved by the Administrative Agent and, unless a Default has
occurred and is continuing at the time any assignment is effected in
accordance with Section 8.07, the Borrower, such approval not to be
unreasonably withheld or delayed, and (b) with respect to the Letter of
Credit Facility, a Person that is an Eligible Assignee under subclause (iii)
or (v) of clause (a) of
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this definition and is approved by the Administrative Agent and, unless a
Default has occurred and is continuing at the time any assignment is effected
in accordance with Section 8.07, the Borrower, such approval not to be
unreasonably withheld or delayed; provided, however, that neither any Loan
Party nor any Affiliate of a Loan Party shall qualify as an Eligible Assignee
under this definition.
"Environmental Action" means any action, suit, demand, demand letter,
claim, notice of non-compliance or violation, notice of liability or
potential liability, investigation, proceeding, consent order or consent
agreement relating in any way to any Environmental Law, any Environmental
Permit or Hazardous Material or arising from alleged injury or threat to
health, safety or the environment, including, without limitation, (a) by any
governmental or regulatory authority for enforcement, cleanup, removal,
response, remedial or other actions or damages and (b) by any governmental or
regulatory authority or third party for damages, contribution,
indemnification, cost recovery, compensation or injunctive relief.
"Environmental Law" means any federal, state, local or foreign statute,
law, ordinance, rule, regulation, code, order, writ, judgment, injunction,
decree or judicial or agency interpretation, policy or guidance relating to
pollution or protection of the environment, health, safety or natural
resources, including, without limitation, those relating to the use,
handling, transportation, treatment, storage, disposal, release or discharge
of Hazardous Materials.
"Environmental Permit" means any permit, approval, identification
number, license or other authorization required under any Environmental Law.
"Equity Interests" means, with respect to any Person, shares of capital
stock of (or other ownership or profit interests in) such Person, warrants,
options or other rights for the purchase or other acquisition from such
Person of shares of capital stock of (or other ownership or profit interests
in) such Person, securities convertible into or exchangeable for shares of
capital stock of (or other ownership or profit interests in) such Person or
warrants, rights or options for the purchase or other acquisition from such
Person of such shares (or such other interests), and other ownership or
profit interests in such Person (including, without limitation, partnership,
member or trust interests therein), whether voting or nonvoting, and whether
or not such shares, warrants, options, rights or other interests are
authorized or otherwise existing on any date of determination.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder.
"ERISA Affiliate" means any Person that for purposes of Title IV of
ERISA is a member of the controlled group of any Loan Party, or under common
control with any Loan Party, within the meaning of Section 414 of the
Internal Revenue Code.
"ERISA Event" means (a) (i) the occurrence of a reportable event, within
the meaning of Section 4043 of ERISA, with respect to any Plan unless the 30-
day notice
10
requirement with respect to such event has been waived by the PBGC, or (ii)
the requirements of subsection (1) of Section 4043(b) of ERISA (without
regard to subsection (2) of such Section) are met with respect to a
contributing sponsor, as defined in Section 4001(a)(13) of ERISA, of a Plan,
and an event described in paragraph (9), (10), (11), (12) or (13) of Section
4043(c) of ERISA is reasonably expected to occur with respect to such Plan
within the following 30 days; (b) the application for a minimum funding
waiver with respect to a Plan; (c) the provision by the administrator of any
Plan of a notice of intent to terminate such Plan, pursuant to Section
4041(a)(2) of ERISA (including any such notice with respect to a plan
amendment referred to in Section 4041(e) of ERISA); (d) the cessation of
operations at a facility of any Loan Party or any ERISA Affiliate in the
circumstances described in Section 4062(e) of ERISA; (e) the withdrawal by
any Loan Party or any ERISA Affiliate from a Multiple Employer Plan during a
plan year for which it was a substantial employer, as defined in Section
4001(a)(2) of ERISA; (f) the conditions for imposition of a lien under
Section 302(f) of ERISA shall have been met with respect to any Plan; (g) the
adoption of an amendment to a Plan requiring the provision of security to
such Plan pursuant to Section 307 of ERISA; or (h) the institution by the
PBGC of proceedings to terminate a Plan pursuant to Section 4042 of ERISA, or
the occurrence of any event or condition described in Section 4042 of ERISA
that constitutes grounds for the termination of, or the appointment of a
trustee to administer, such Plan.
"Eurocurrency Liabilities" has the meaning specified in Regulation D of
the Board of Governors of the Federal Reserve System, as in effect from time
to time.
"Eurodollar Lending Office" means, with respect to any Lender Party, the
office of such Lender Party specified as its "Eurodollar Lending Office"
opposite its name on Schedule I hereto or in the Assignment and Acceptance
pursuant to which it became a Lender Party (or, if no such office is
specified, its Domestic Lending Office), or such other office of such Lender
Party as such Lender Party may from time to time specify as its "Eurodollar
Lending Office" to the Borrower and the Administrative Agent.
"Eurodollar Rate" means, for any Interest Period for all Eurodollar Rate
Advances comprising part of the same Borrowing, an interest rate per annum
equal to the rate per annum obtained by dividing (a) the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on
Telerate Page 3750 (or any successor page) as the London interbank offered
rate for deposits in U.S. dollars at 11:00 A.M. (London time) two Business
Days before the first day of such Interest Period for a period equal to such
Interest Period (provided that, if for any reason such rate is not available,
the term "Eurodollar Rate" shall mean, for any Interest Period for all
Eurodollar Rate Advances comprising part of the same Borrowing, the rate per
annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing
on Reuters Screen LIBO Page as the London interbank offered rate for deposits
in Dollars at approximately 11:00 A.M. (London time) two Business Days prior
to the first day of such Interest Period for a term comparable to such
Interest Period; provided, however, if more than one rate is specified on
Reuters Screen LIBO Page, the applicable rate shall be the arithmetic mean of
all such
11
rates) by (b) a percentage equal to 100% minus the Eurodollar Rate Reserve
Percentage for such Interest Period.
"Eurodollar Rate Advance" means an Advance that bears interest as
provided in Section 2.07(a)(ii).
"Eurodollar Rate Reserve Percentage" means, for any Interest Period for
all Eurodollar Rate Advances comprising part of the same Borrowing, the
reserve percentage applicable two Business Days before the first day of such
Interest Period under regulations issued from time to time by the Board of
Governors of the Federal Reserve System (or any successor) for determining
the maximum reserve requirement (including, without limitation, any
emergency, supplemental or other marginal reserve requirement) for a member
bank of the Federal Reserve System in New York City with respect to
liabilities or assets consisting of or including Eurocurrency Liabilities (or
with respect to any other category of liabilities that includes deposits by
reference to which the interest rate on Eurodollar Rate Advances is
determined) having a term equal to such Interest Period.
"Events of Default" has the meaning specified in Section 6.01.
"Existing Credit Agreement" has the meaning specified in the Preliminary
Statements.
"Existing Debt" has the meaning specified in Section 4.01(gg) hereof.
"Existing Lenders" has the meaning specified in the Preliminary
Statements.
"Existing Subsidiary" shall have the meaning set forth in the Indenture.
"Extraordinary Receipt" means any cash received by or paid to or for the
account of any Person not in the ordinary course of business, including,
without limitation, tax refunds, pension plan reversions, proceeds of
insurance (other than proceeds of business interruption insurance to the
extent such proceeds constitute compensation for lost earnings), condemnation
awards (and payments in lieu thereof), indemnity payments; provided, however,
that an Extraordinary Receipt shall not include Net Cash Proceeds nor shall
it include cash receipts received from proceeds of insurance, condemnation
awards (or payments in lieu thereof) or indemnity payments to the extent that
such proceeds, awards or payments (A) in respect of loss or damage to
equipment, fixed assets or real property are applied (or in respect of which
expenditures were previously incurred) to replace or repair the equipment,
fixed assets or real property in respect of which such proceeds were received
in accordance with the terms of the Loan Documents, so long as such
application is made within 12 months after the occurrence of such damage of
loss or (B) are received by any Person in respect of any third party claim
against such Person and applied to pay (or to reimburse such Person for its
prior payment of) such claim and the costs and expenses of such Person with
respect thereto.
"Facility" means the Working Capital Facility or the Letter of Credit
Facility.
12
"FFCA" means Franchise Finance Corporation of America, a Delaware
corporation, and its Affiliates.
"Federal Funds Rate" means, for any period, a fluctuating interest rate
per annum equal for each day during such period to the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day
(or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published
for any day that is a Business Day, the average of the quotations for such
day for such transactions received by the Administrative Agent from three
Federal funds brokers of recognized standing selected by it.
"Fiscal Year" means a fiscal year of the Borrower and its Subsidiaries
ending on the last Sunday in October in any calendar year.
"Foreign Subsidiary" means a Subsidiary organized under the laws of a
jurisdiction other than the United States or any State thereof or the
District of Columbia.
"Funded Debt" of any Person means Debt of such Person other than (i)
Debt in respect of Contingent Obligations and (ii) Debt under letters of
credit.
"GAAP" has the meaning specified in Section 1.03.
"Hazardous Materials" means (a) petroleum or petroleum products, by-
products or breakdown products, radioactive materials, asbestos-containing
materials, polychlorinated biphenyls and radon gas and (b) any other
chemicals, materials or substances designated, classified or regulated as
hazardous or toxic or as a pollutant or contaminant under any Environmental
Law.
"Hedge Agreements" means interest rate swap, cap or collar agreements,
interest rate future or option contracts, currency swap agreements, currency
future or option contracts and other similar agreements.
"Indemnified Party" has the meaning specified in Section 8.04(b).
"Indenture" shall mean that certain Indenture dated as of July 15, 1992,
as amended by that First Supplemental Indenture dated as of September 9,
1996, between and among the Borrower (as successor to TPI Enterprises, Inc.
pursuant to the First Supplemental Indenture), TPI and The Bank of New York
as trustee, pursuant to which the Debentures were issued.
"Initial Extension of Credit" means the earlier to occur of the initial
Borrowing and the initial issuance of a Letter of Credit hereunder.
"Initial Issuing Bank" has the meaning specified in the recital of
parties to this Agreement.
13
"Initial Lenders" has the meaning specified in the recital of parties to
this Agreement.
"Insufficiency" means, with respect to any Plan, the amount, if any, of
its unfunded benefit liabilities, as defined in Section 4001(a)(18) of ERISA.
"Intellectual Property Security Agreement" has the meaning specified in
Section 3.01(l)(ix).
"Interest Expense" means, as of the last day of any Measurement Period,
cash interest expense of the Borrower and its Subsidiaries (other than
Captain D's, COI and their respective Subsidiaries) for the applicable
Measurement Period.
"Interest Period" means, for each Eurodollar Rate Advance comprising
part of the same Borrowing, the period commencing on the date of such
Eurodollar Rate Advance or the date of the Conversion of any Prime Rate
Advance into such Eurodollar Rate Advance, and ending on the last day of the
period selected by the Borrower pursuant to the provisions below and,
thereafter, each subsequent period commencing on the last day of the
immediately preceding Interest Period and ending on the last day of the
period selected by the Borrower pursuant to the provisions below. The
duration of each such Interest Period shall be one, two, three or six months,
as the Borrower may, upon notice received by the Administrative Agent not
later than 11:00 A.M. (Charlotte, North Carolina time) on the third Business
Day prior to the first day of such Interest Period, select; provided,
however, that:
(a) the Borrower may not select any Interest Period with
respect to any Eurodollar Rate Advance under a Facility that ends
after any principal repayment installment date for such Facility
unless, after giving effect to such selection, the aggregate
principal amount of Prime Rate Advances and of Eurodollar Rate
Advances having Interest Periods that end on or prior to such
principal repayment installment date for such Facility shall be at
least equal to the aggregate principal amount of Advances under such
Facility due and payable on or prior to such date;
(b) whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last day of
such Interest Period shall be extended to occur on the next
succeeding Business Day, provided, however, that, if such extension
would cause the last day of such Interest Period to occur in the next
following calendar month, the last day of such Interest Period shall
occur on the next preceding Business Day; and
(c) whenever the first day of any Interest Period occurs on a
day of an initial calendar month for which there is no numerically
corresponding day in the calendar month that succeeds such initial
calendar month by the number of months equal to the number of months
in such Interest Period, such Interest Period shall end on the last
Business Day of such succeeding calendar month.
14
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder.
"Investment" in any Person means any loan or advance to such Person, any
purchase or other acquisition of any Equity Interests or the assets
comprising a division or business unit or a substantial part of all of the
business of such Person, any capital contribution to such Person or any other
direct or indirect investment in such Person, including, without limitation,
any acquisition by way of merger or consolidation and any arrangement
pursuant to which the investor incurs Debt of the types referred to in clause
(i) or (j) of the definition of "Debt" in respect of such Person. The amount
of any Investment shall be the original principal or capital amount thereof
less the sum of (i) all cash returns of principal or equity thereon and (ii)
in the case of any guaranty, any reduction in the aggregate amount of
liability under such guaranty to the extent that such reduction is made
strictly in accordance with the terms of such guaranty (and, in each case,
without adjustment by reason of the financial condition of such other
Person).
"Issuing Bank" means the Initial Issuing Bank and each Eligible Assignee
to which the Letter of Credit Commitment hereunder has been assigned pursuant
to Section 8.07.
"L/C Cash Collateral Account" has the meaning specified in the Security
Agreement.
"L/C Related Documents" has the meaning specified in Section
2.04(b)(ii)(A).
"Lender Party" means any Lender or the Issuing Bank.
"Lenders" means the Initial Lenders and each Person that shall become a
Lender hereunder pursuant to Section 8.07.
"Letter of Credit" has the meaning specified in Section 2.01(b).
"Letter of Credit Advance" means an advance made by the Issuing Bank or
any Working Capital Lender pursuant to Section 2.03(c).
"Letter of Credit Agreement" has the meaning specified in Section
2.03(a).
"Letter of Credit Commitment" means, with respect to the Issuing Bank at
any time, an amount equal to the sum of (i) the maximum amount available to
be drawn (assuming compliance at such time with all conditions to drawing)
under all letters of credit issued for the benefit of the Administrative
Agent under the Captain D's Financing and the Commissary Financing, plus (ii)
the amount set forth opposite the Issuing Bank's name on Schedule I hereto
under the caption "Letter of Credit Commitment" or, if the Issuing Bank has
entered into one or more Assignments and Acceptances, set forth for the
Issuing Bank in the Register maintained by the Administrative Agent pursuant
to Section 8.07(d) as the Issuing Bank's "Letter of Credit Commitment", as
such amount may be reduced at or prior to such time pursuant to Section 2.05.
15
"Letter of Credit Facility" means, at any time, an amount equal to the
amount of the Issuing Bank's Letter of Credit Commitment at such time, as
such amount may be reduced at or prior to such time pursuant to Section 2.05.
"Lien" means any lien, security interest or other charge or encumbrance
of any kind, or any other type of preferential arrangement, including,
without limitation, the lien or retained security title of a conditional
vendor and any easement, right of way or other encumbrance on title to real
property.
"Loan Documents" means (a) for purposes of this Agreement and the Notes
and any amendment or modification hereof or thereof and for all other
purposes other than for purposes of the Subsidiary Guaranty and the
Collateral Documents, (i) this Agreement, (ii) the Notes, (iii) the
Subsidiary Guaranty, (iv) the Shareholder's Guaranty, (v) the Collateral
Documents and (vi) each Letter of Credit Agreement and (b) for purposes of
the Subsidiary Guaranty and the Collateral Documents, (i) this Agreement,
(ii) the Notes, (iii) the Subsidiary Guaranty, (iv) the Shareholder's
Guaranty, (v) the Collateral Documents and (vi) each Letter of Credit
Agreement, in each case as amended or otherwise modified from time to time.
"Loan Parties" means the Borrower and the Subsidiary Guarantors.
"XXXXX" means the $177,358,000 at maturity of zero coupon liquid yield
option notes due 2004 issued by Shoney's.
"Management and Operating Agreements" means (i) the Management and
Operating Agreement dated the Effective Date between TPI and Captain D's and
(ii) the Management and Operating Agreement dated the Effective Date between
the Borrower and Captain D's.
"Margin Stock" has the meaning specified in Regulation U.
"Master Lease" means each Master Lease between the Borrower and a SPV.
"Material Adverse Change" means any material adverse change in the
business, condition (financial or otherwise), operations, performance,
properties or prospects of any Loan Party or any of its Subsidiaries.
"Material Adverse Effect" means a material adverse effect on (a) the
business, condition (financial or otherwise), operations, performance,
properties or prospects of any Loan Party or any of its Subsidiaries, (b) the
rights and remedies of the Administrative Agent or any Lender Party under any
Loan Document or (c) the ability of any Loan Party to perform its Obligations
under any Loan Document to which it is or is to be a party.
"Measurement Period" means for (i) the fiscal quarter ended May 13,
2001, such fiscal quarter, (ii) for the fiscal quarter ended August 5, 2001,
the two fiscal quarters ended at the end of such fiscal quarter, (iii) for
the fiscal quarter ended October 28, 2001,
16
the three fiscal quarters ended at the end of such fiscal quarter and (iv)
for each fiscal quarter ended thereafter, the four fiscal quarters ended at
the end of such fiscal quarter.
"Mortgage" means the "Mortgages" in respect of the Existing Credit
Agreement and the Mortgages entered into pursuant to Section 5.01(n).
"Mortgage Policy" has the meaning specified in the Existing Credit
Agreement and in Section 5.01(n).
"Multiemployer Plan" means a multiemployer plan, as defined in Section
4001(a)(3) of ERISA, to which any Loan Party or any ERISA Affiliate is making
or accruing an obligation to make contributions, or has within any of the
preceding five plan years made or accrued an obligation to make
contributions.
"Multiple Employer Plan" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of any
Loan Party or any ERISA Affiliate and at least one Person other than the Loan
Parties and the ERISA Affiliates or (b) was so maintained and in respect of
which any Loan Party or any ERISA Affiliate could have liability under
Section 4064 or 4069 of ERISA in the event such plan has been or were to be
terminated.
"Net Cash Proceeds" means, with respect to any sale, transfer or other
disposition (other than by lease but including by way of the occurrence of an
event that gives rise to insurance proceeds as contemplated by Section
5.01(d)(i)) of any asset or the sale or issuance of any Debt or Equity
Interests (excluding proceeds received through payroll deductions pursuant to
employee stock purchase plans, director or employee option plans or other
employee benefit plans, provided that the aggregate amount of all such
proceeds excluded from the calculation of "Net Cash Proceeds" from and after
the date hereof shall not exceed $2,500,000), the aggregate amount of cash
received from time to time (whether as initial consideration or through
payment or disposition of deferred consideration) by or on behalf of such
Person in connection with such transaction after deducting therefrom only
(without duplication) (a) reasonable and customary brokerage fees and
commissions for similar transactions, underwriting fees and discounts, legal
fees, finder's fees and other similar fees and commissions estimated to be
paid in connection with or as a result of such transaction and (b) the amount
of taxes estimated to be paid in connection with or as a result of such
transaction and (c) the amount of any Debt secured by a Lien on such asset
that, by the terms of such transaction, is required to be repaid upon such
disposition, in each case to the extent, but only to the extent, that the
amounts so deducted are, at the time of receipt of such cash, actually paid
to a Person that is not an Affiliate of such Person or any Loan Party or any
Affiliate of any Loan Party and are properly attributable to such transaction
or to the asset that is the subject thereof and (d) the amount of
consideration paid in connection with the purchase, repurchase or buy-out of
leases or the exercise of any option to purchase real estate, improvements,
fixtures or equipment used in its operations by the Borrower or its
Subsidiaries; provided such purchase, re-purchase, buy-out or exercise of
such option is made within six months of the receipt of such cash proceeds
with respect thereto and (e) the amount of proceeds
17
from the sale of shares of preferred stock or subordinated debt to finance
research and development expenditures of the Borrower; provided no Default or
Event of Default exists immediately before and after giving effect to such
transaction; provided, however, that if any amounts described in clauses (a)
and (b) estimated to be paid in connection with or as a result of any such
transaction are not paid within one year following the date of such
transaction, the excess of such estimated amounts over the amount of such
fees, discounts, commissions and taxes paid within such one-year period in
connection with or as a result of such transaction shall be "Net Cash
Proceeds" at the end of such one-year period; provided further that Net Cash
Proceeds that are comprised of insurance proceeds shall not include any such
insurance proceeds to the extent such insurance proceeds are applied to the
replacement of the asset or property in respect of which such insurance
proceeds were received, so long as such application is made within 12 months
after the occurrence of the event giving rise to such insurance proceeds.
"Note" means a Working Capital Note.
"Notice of Borrowing" has the meaning specified in Section 2.02(a).
"Notice of Issuance" has the meaning specified in Section 2.03(a).
"Notice of Renewal" has the meaning specified in Section 2.01(b).
"Notice of Termination" has the meaning specified in Section 2.01(b).
"NPL" means the National Priorities List under CERCLA.
"Obligation" means, with respect to any Person, any payment, performance
or other obligation of such Person of any kind, including, without
limitation, any liability of such Person on any claim, whether or not the
right of any creditor to payment in respect of such claim is reduced to
judgment, liquidated, unliquidated, fixed, contingent, matured, disputed,
undisputed, legal, equitable, secured or unsecured, and whether or not such
claim is discharged, stayed or otherwise affected by any proceeding referred
to in Section 6.01(f). Without limiting the generality of the foregoing, the
Obligations of the Loan Parties under the Loan Documents include (a) the
obligation to pay principal, interest, Letter of Credit commissions, charges,
expenses, fees, attorneys' fees and disbursements, indemnities and other
amounts payable by any Loan Party under any Loan Document and (b) the
obligation of any Loan Party to reimburse any amount in respect of any of the
foregoing that any Lender Party, in its sole discretion, may elect to pay or
advance on behalf of such Loan Party.
"OECD" means the Organization for Economic Cooperation and Development.
"Office Lease" means the Office Lease to be entered into by the
Borrower, as landlord, and Captain D's, as tenant.
"Open Year" has the meaning specified in Section 4.01(aa).
18
"Other Taxes" has the meaning specified in Section 2.12(b).
"PBGC" means the Pension Benefit Guaranty Corporation (or any
successor).
"Permitted Encumbrances" has the meaning specified in the Mortgages.
"Permitted Liens" means (i) such of the following as to which no
enforcement, collection, execution, levy or foreclosure proceeding shall have
been commenced: (a) Liens for taxes, assessments and governmental charges or
levies not yet due and payable or that are being contested in good faith and
by proper proceedings and as to which appropriate reserves are being
maintained; (b) Liens (other than materialmen's, mechanics', carriers',
workmen's and repairmen's Liens) arising in the ordinary course of business
securing obligations that are not overdue for a period of more than 180 days
or being contested in good faith and by proper proceedings and as to which
appropriate reserves are being maintained; and (c) pledges or deposits to
secure obligations under workers' compensation laws or similar legislation or
to secure public or statutory obligations; and (ii) easements, rights of way
and other encumbrances on title to real property that do not render title to
the property encumbered thereby unmarketable or materially adversely affect
the use of such property for its present purposes.
"Person" means an individual, partnership, corporation (including a
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity, or a government or
any political subdivision or agency thereof.
"Plan" means a Single Employer Plan or a Multiple Employer Plan.
"Preferred Stock" means, with respect to any corporation, capital stock
issued by such corporation that is entitled to a preference or priority over
any other capital stock issued by such corporation upon any distribution of
such corporation's assets, whether by dividend or upon liquidation.
"Prime Rate" means a fluctuating interest rate per annum in effect from
time to time, which rate per annum shall at all times be equal to the higher
of:
(a) the rate of interest announced publicly by Bank of America
in Charlotte, North Carolina from time to time, as Bank of America's
prime rate base rate; or
(b) 1/2 of one percent per annum above the Federal Funds Rate.
"Prime Rate Advance" means an Advance that bears interest as provided in
Section 2.07(a)(i).
"Pro Rata Share" of any amount means, with respect to any Working
Capital Lender at any time, the product of such amount times a fraction the
numerator of which is
19
the amount of such Lender's Working Capital Commitment at such time and the
denominator of which is the Working Capital Facility at such time.
"Real Estate Financing" means the aggregate $99 million financing made
by FFCA Funding Corporation and FFCA Acquisition Corporation, as applicable,
to the SPVs and the Borrower pursuant to seven separate loan agreements
between FFCA Funding Corporation or FFCA Acquisition Corporation, as
applicable, and the applicable SPV or the Borrower.
"Redeemable" means, with respect to any Equity Interests, any Debt or
any other right or Obligation, any such right or Obligation that (a) the
issuer has undertaken to redeem at a fixed or determinable date or dates,
whether by operation of a sinking fund or otherwise, or upon the occurrence
of a condition not solely within the control of the issuer or (b) is
redeemable at the option of the holder.
"Redemption Price" shall have the meaning set forth in the Indenture.
"Register" has the meaning specified in Section 8.07(d).
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Related Documents" means the Master Leases, the Administrative Service
Agreements, the Management and Operating Agreement, the Tax Sharing Agreement
and the Office Lease.
"Repurchase Price" shall have the meaning set forth in the Indenture.
"Required Lenders" means at any time Lenders owed or holding at least a
majority in interest of the sum of (a) the aggregate principal amount of the
Advances outstanding at such time, (b) the aggregate Available Amount of all
Letters of Credit outstanding at such time and (c) the aggregate unused
Working Capital Commitments at such time; provided, however, that if any
Lender shall be a Defaulting Lender at such time, there shall be excluded
from the determination of Required Lenders at such time (A) the aggregate
principal amount of the Advances owing to such Lender (in its capacity as a
Lender) and outstanding at such time, (B) such Lender's Pro Rata Share of the
aggregate Available Amount of all Letters of Credit issued by such Lender and
outstanding at such time and (C) the Unused Working Capital Commitment of
such Lender at such time. For purposes of this definition, the aggregate
principal amount of Letter of Credit Advances owing to the Issuing Bank and
the Available Amount of each Letter of Credit shall be considered to be owed
to the Working Capital Lenders ratably in accordance with their respective
Working Capital Commitments.
"Responsible Officer" means, with respect to any Loan Party or any of
its Subsidiaries, at the time any determination thereof is to be made, each
of those Persons who are the Chairman of the Board (if at the time, an
officer), President, Chief Financial
20
Officer (regardless of title), Treasurer, Corporate Controller (regardless of
title), Secretary or Assistant Treasurer of such Loan Party or Subsidiary.
"Restructuring" means the restructuring of the business of the Borrower
and its Subsidiaries pursuant to which generally the "Captain D's" business,
the "Shoney's" business and the commissary and distribution businesses will
be operated, respectively, by Shoney's, Captain D's, COI and their respective
Subsidiaries.
"Restructuring Charges" means all non-cash charges taken by the Borrower
and its Subsidiaries on or after October 26, 1997 in accordance with GAAP in
respect of the closure of the Operate-to-Improve Stores.
"Secured Parties" means the Administrative Agent and the Lender Parties.
"Security Agreement" has the meaning specified in Section 3.01(g)(viii).
"Shareholder's Guaranty" shall have the meaning specified in Section
3.01(l)(x)(B).
"Single Employer Plan" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of any
Loan Party or any ERISA Affiliate and no Person other than the Loan Parties
and the ERISA Affiliates or (b) was so maintained and in respect of which any
Loan Party or any ERISA Affiliate could have liability under Section 4069 of
ERISA in the event such plan has been or were to be terminated.
"Solvent" and "Solvency" mean, with respect to any Person on a
particular date, that on such date (a) on a pro forma basis, the fair value
of the property of such Person is greater than the total amount of
liabilities, including, without limitation, contingent liabilities, of such
Person, (b) on a pro forma basis, the present fair salable value of the
assets of such Person is not less than the amount that will be required to
pay the probable liability of such Person on its debts as they become
absolute and matured, (c) such Person does not intend to, and does not
believe that it will, incur debts or liabilities beyond such Person's ability
to pay or refinance such debts and liabilities as they mature and (d) such
Person is not engaged in business or a transaction, and is not about to
engage in business or a transaction, for which such Person's property would
constitute an unreasonably small capital. The amount of contingent
liabilities at any time shall be computed as the amount that, in the light of
all the facts and circumstances existing at such time, represents the amount
that can reasonably be expected to become an actual or matured liability.
"SPVs" means Shoney's Properties Group 1, LLC, Shoney's Properties Group
2, LLC, Shoney's Properties Group 3, LLC, Shoney's Properties Group 4 LLC,
Shoney's Properties Group 5, LLC and Shoney's Properties Group 6, LLC.
"Standby Letter of Credit" means any Letter of Credit issued under the
Letter of Credit Facility, other than a Trade Letter of Credit.
21
"Subsidiary" of any Person means any corporation, partnership, joint
venture, limited liability company, trust or estate of which (or in which)
more than 50% of (a) the issued and outstanding capital stock having ordinary
voting power to elect a majority of the board of directors of such
corporation (irrespective of whether at the time capital stock of any other
class or classes of such corporation shall or might have voting power upon
the occurrence of any contingency), (b) the interest in the capital or
profits of such partnership, joint venture or limited liability company or
(c) the beneficial interest in such trust or estate is at the time directly
or indirectly owned or controlled by such Person, by such Person and one or
more of its other Subsidiaries or by one or more of such Person's other
Subsidiaries; provided, however, that for purposes of Sections 5.01, 5.02
and 5.04, the term "Subsidiary" shall not include Captain D's, COI and their
respective Subsidiaries.
"Subsidiary Guarantor" means the wholly-owned Domestic Subsidiaries of
the Borrower (other than the SPVs, Properties Member Co., Inc., TPI Insurance
Corporation, Captain D's, COI and their respective Subsidiaries).
"Subsidiary Guaranty" has the meaning specified in Section 3.01(g)(xi).
"Surviving Debt" has the meaning specified in Section 4.01(hh).
"Syndication Agent" has the meaning specified in the recitals of the
parties hereto.
"Taxes" has the meaning specified in Section 2.12(a).
"Tax Sharing Agreement" means the Tax Sharing Agreement dated the
Effective Date among the Borrower, Captain D's, COI and their respective
Subsidiaries.
"Termination Date" means the earlier of September 6, 2002 and the date
of termination in whole of the Letter of Credit Commitments and the Working
Capital Commitments pursuant to Section 2.05 or 6.01.
"TPI" means TPI Restaurants, Inc., a Tennessee corporation.
"Trade Letter of Credit" means any Letter of Credit that is issued under
the Letter of Credit Facility for the benefit of a supplier of inventory to
the Borrower or any of its Subsidiaries to effect payment for such inventory,
the conditions to drawing under which include the presentation to the Issuing
Bank of negotiable bills of lading, invoices and related documents
sufficient, in the judgment of the Issuing Bank, to create a valid and
perfected lien on or security interest in such inventory, bills of lading,
invoices and related documents in favor of the Issuing Bank.
"Transaction" means the Restructuring, the Real Estate Financing, the
Captain D's Financing, the Commissary Financing, the financing contemplated
hereunder and all related transactions.
22
"Transaction Documents" means the Loan Documents and the Related
Documents.
"Treasury Management Services" means any and all treasury and cash
management services provided by any Lender or any of its Affiliates to the
Borrower and its Subsidiaries (other than Captain D's, COI and their
Subsidiaries).
"Type" refers to the distinction between Prime Rate Advances and
Eurodollar Rate Advances.
"Unused Working Capital Commitment" means, with respect to any Working
Capital Lender at any time, (a) such Lender's Working Capital Commitment at
such time minus (b) the sum of (i) the aggregate principal amount of all
Working Capital Advances and Letter of Credit Advances made by such Lender
(in its capacity as a Lender) and outstanding at such time, plus (ii) such
Lender's Pro Rata Share of (A) the aggregate Available Amount of all Letters
of Credit outstanding at such time, and (B) the aggregate principal amount of
all Letter of Credit Advances made by the Issuing Bank pursuant to Section
2.03(c) and outstanding at such time, less such Lender's Pro Rata Share of
the maximum amount available to be drawn (assuming compliance at such time
with all conditions to drawing) under all letters of credit issued for the
benefit of the Administrative Agent under the Captain D's Financing and the
Commissary Financing.
"Voting Interests" means shares of capital stock issued by a
corporation, or equivalent Equity Interests in any other Person, the holders
of which are ordinarily, in the absence of contingencies, entitled to vote
for the election of directors (or persons performing similar functions) of
such Person, even if the right so to vote has been suspended by the happening
of such a contingency.
"Welfare Plan" means a welfare plan, as defined in Section 3(1) of
ERISA, that is maintained for employees of any Loan Party or in respect of
which any Loan Party could have liability.
"Withdrawal Liability" has the meaning specified in Part I of Subtitle
E of Title IV of ERISA.
"Working Capital Advance" has the meaning specified in Section 2.01(a).
"Working Capital Borrowing" means a borrowing consisting of simultaneous
Working Capital Advances of the same Type made by the Working Capital
Lenders.
"Working Capital Commitment" means, with respect to any Working Capital
Lender at any time, the amount set forth opposite such Lender's name on
Schedule I hereto under the caption "Working Capital Commitment" or, if such
Lender has entered into one or more Assignments and Acceptances, set forth
for such Lender in the Register maintained by the Administrative Agent
pursuant to Section 8.07(d) as such Lender's "Working Capital Commitment", as
such amount may be reduced at or prior to such time pursuant to Section 2.05.
23
"Working Capital Facility" means, at any time, the aggregate amount of
the Working Capital Lenders' Working Capital Commitments at such time.
"Working Capital Lender" means any Lender that has a Working Capital
Commitment.
"Working Capital Note" means a promissory note of the Borrower payable
to the order of any Working Capital Lender, in substantially the form of
Exhibit A hereto, evidencing the aggregate indebtedness of the Borrower to
such Lender resulting from the Working Capital Advances made by such Lender.
SECTION 1.02. Computation of Time Periods. In this Agreement in the
computation of periods of time from a specified date to a later specified
date, the word "from" means "from and including" and the words "to" and
"until" each mean "to but excluding".
SECTION 1.03. Accounting Terms. All accounting terms not specifically
defined herein shall be construed in accordance with generally accepted
accounting principles consistent with those applied in the preparation of the
financial statements referred to in Section 4.01(f) ("GAAP").
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
AND THE LETTERS OF CREDIT
SECTION 2.01. The Advances. The Working Capital Advances. Each
Working Capital Lender severally agrees, on the terms and conditions
hereinafter set forth, to make advances (each a "Working Capital Advance") to
the Borrower from time to time on any Business Day during the period from the
date hereof until the Termination Date in an amount for each such Advance not
to exceed such Lender's Unused Working Capital Commitment at such time. Each
Working Capital Borrowing shall be in an aggregate amount of $500,000 or an
integral multiple of $100,000 in excess thereof (other than a Borrowing the
proceeds of which shall be used solely to repay or prepay in full outstanding
Letter of Credit Advances) and shall consist of Working Capital Advances made
simultaneously by the Working Capital Lenders ratably according to their
Working Capital Commitments. Within the limits of each Working Capital
Lender's Unused Working Capital Commitment in effect from time to time, the
Borrower may borrow under this Section 2.01(a), prepay pursuant to Section
2.06(a) and reborrow under this Section 2.01(a).
(b) Letters of Credit. The Issuing Bank agrees, on the terms and
conditions hereinafter set forth, to issue letters of credit (the "Letters of
Credit") for the account of the Borrower from time to time on any Business
Day during the period from the date hereof until 60 days before September 6,
2002 (i) in an aggregate Available Amount for all Letters of Credit not to
exceed at any time the Issuing Bank's Letter of Credit Commitment at such
time and (ii) in an Available Amount for each such Letter of Credit not to
exceed the lesser of (x) the Letter of Credit Facility at such time and (y)
the Unused Working Capital Commitments of the Working Capital Lenders at such
time. No Letter of Credit shall have an expiration date (including all
24
rights of the Borrower or the beneficiary to require renewal) later than the
earlier of 60 days before September 6, 2002 and (A) in the case of a Standby
Letter of Credit, one year after the date of issuance thereof, but may by its
terms be renewable annually upon notice (a "Notice of Renewal") from the
Borrower given to the Issuing Bank and the Administrative Agent on or prior
to any date for notice of renewal set forth in such Letter of Credit but in
any event at least three Business Days prior to the date of the proposed
renewal of such Standby Letter of Credit and upon fulfillment of the
applicable conditions set forth in Article III unless the Issuing Bank has
notified the Borrower (with a copy to the Administrative Agent) on or prior
to the date for notice of termination set forth in such Letter of Credit but
in any event at least 30 Business Days prior to the date of automatic renewal
of its election not to renew such Standby Letter of Credit (a "Notice of
Termination") and (B) in the case of a Trade Letter of Credit, 60 days after
the date of issuance thereof; provided that the terms of each Standby Letter
of Credit that is automatically renewable annually shall (x) require the
Issuing Bank that issued such Standby Letter of Credit to give the
beneficiary named in such Standby Letter of Credit notice of any Notice of
Termination, (y) permit such beneficiary, upon receipt of such notice, to
draw under such Standby Letter of Credit prior to the date such Standby
Letter of Credit otherwise would have been automatically renewed and (z) not
permit the expiration date (after giving effect to any renewal) of such
Standby Letter of Credit in any event to be extended to a date later than 60
days before September 6, 2002. If either a Notice of Renewal is not given by
the Borrower or a Notice of Termination is given by the Issuing Bank pursuant
to the immediately preceding sentence, such Standby Letter of Credit shall
expire on the date on which it otherwise would have been automatically
renewed; provided, however, that even in the absence of receipt of a Notice
of Renewal the Issuing Bank may in its discretion, unless instructed to the
contrary by the Administrative Agent or the Borrower, deem that a Notice of
Renewal had been timely delivered and in such case, a Notice of Renewal shall
be deemed to have been so delivered for all purposes under this Agreement.
Within the limits of the Letter of Credit Facility, and subject to the limits
referred to above, the Borrower may request the issuance of Letters of Credit
under this Section 2.01(b), repay any Letter of Credit Advances resulting
from drawings thereunder pursuant to Section 2.03(c) and request the issuance
of additional Letters of Credit under this Section 2.01(b).
SECTION 2.02. Making the Advances. (a) Except as otherwise provided in
Section 2.03 and except in respect of Advances made on the date of the
Initial Extension of Credit, in which case notice will be given on the date
of such Initial Extension of Credit, each Borrowing shall be made on notice,
given not later than 11:00 A.M. (Charlotte, North Carolina time) on the third
Business Day prior to the date of the proposed Borrowing in the case of a
Borrowing consisting of Eurodollar Rate Advances, or the date of the proposed
Borrowing in the case of a Borrowing consisting of Base Rate Advances, by the
Borrower to the Administrative Agent, which shall give to each Appropriate
Lender prompt notice thereof by telex or telecopier. Each such notice of a
Borrowing (a "Notice of Borrowing") shall be by telephone, confirmed promptly
in writing, or by telex or telecopier, in substantially the form of Exhibit
B hereto, specifying therein the requested (i) date of such Borrowing, (ii)
Type of Advances comprising such Borrowing, (iii) aggregate amount of such
Borrowing and (iv) in the case of a Borrowing consisting of Eurodollar Rate
Advances, initial Interest Period for each such Advance. Each Appropriate
Lender shall, before 11:00 A.M. (Charlotte, North Carolina time) on the date
of such Borrowing, make available for the account of its Applicable Lending
Office to the
25
Administrative Agent at the Administrative Agent's Account, in same day
funds, such Lender's ratable portion of such Borrowing in accordance with the
respective Commitments under the applicable Facility of such Lender and the
other Appropriate Lenders. After the Administrative Agent's receipt of such
funds and upon fulfillment of the applicable conditions set forth in Article
III, the Administrative Agent will make such funds available to the Borrower
by crediting the Borrower's Account; provided, however, that, in the case of
any Working Capital Borrowing, the Administrative Agent shall first make a
portion of such funds equal to the aggregate principal amount of any Letter
of Credit Advances made by the Issuing Bank and, in the case of Letter of
Credit Advances, by any other Working Capital Lender and outstanding on the
date of such Working Capital Borrowing, plus interest accrued and unpaid
thereon to and as of such date, available to the Issuing Bank and such other
Working Capital Lenders for repayment of such Letter of Credit Advances.
(b) Anything in subsection (a) above to the contrary notwithstanding,
(i) the Borrower may not select Eurodollar Rate Advances for the initial
Borrowing hereunder or for any Borrowing if the aggregate amount of such
Borrowing is less than $2,000,000 or if the obligation of the Appropriate
Lenders to make Eurodollar Rate Advances shall then be suspended pursuant to
Section 2.09 or Section 2.10 and (ii) the Working Capital Advances made on
any date may not be outstanding as part of more than 3 separate Borrowings.
(c) Each Notice of Borrowing shall be irrevocable and binding on the
Borrower. In the case of any Borrowing that the related Notice of Borrowing
specifies is to be comprised of Eurodollar Rate Advances, the Borrower shall
indemnify each Appropriate Lender against any loss, cost or expense incurred
by such Lender as a result of any failure by the Loan Parties to fulfill on
or before the date specified in such Notice of Borrowing for such Borrowing
the applicable conditions set forth in Article III, including, without
limitation, any loss (including loss of anticipated profits), cost or expense
incurred by reason of the liquidation or reemployment of deposits or other
funds acquired by such Lender to fund the Advance to be made by such Lender
as part of such Borrowing when such Advance, as a result of such failure, is
not made on such date.
(d) Unless the Administrative Agent shall have received notice from an
Appropriate Lender prior to the date of any Borrowing under which such Lender
has a Commitment that such Lender will not make available to the
Administrative Agent such Lender's ratable portion of such Borrowing, the
Administrative Agent may assume that such Lender has made such portion
available to the Administrative Agent on the date of such Borrowing in
accordance with subsection (a) of this Section 2.02 and the Administrative
Agent may, in reliance upon such assumption, make available to the Borrower
on such date a corresponding amount. If and to the extent that such Lender
shall not have so made such ratable portion available to the Administrative
Agent, such Lender and the Borrower severally agree to repay or pay to the
Administrative Agent forthwith on demand such corresponding amount and to pay
interest thereon, for each day from the date such amount is made available to
the Borrower until the date such amount is repaid or paid to the
Administrative Agent, at (i) in the case of the Borrower, the interest rate
applicable at such time under Section 2.07 to Advances comprising such
Borrowing and (ii) in the case of such Lender, the Federal Funds Rate. If
such
26
Lender shall pay to the Administrative Agent such corresponding amount, such
amount so paid shall constitute such Lender's Advance as part of such
Borrowing for all purposes.
(e) The failure of any Lender to make the Advance to be made by it as
part of any Borrowing shall not relieve any other Lender of its obligation,
if any, hereunder to make its Advance on the date of such Borrowing, but no
Lender shall be responsible for the failure of any other Lender to make the
Advance to be made by such other Lender on the date of any Borrowing.
(f) If an Appropriate Lender notifies the Administrative Agent prior to
the date of any Borrowing under which such Lender has a Commitment that such
Lender will not make available to the Administrative Agent such Lender's
ratable portion of such Borrowing, the Administrative Agent may elect to make
such portion available to the Borrower on the date of such Borrowing a
corresponding amount. If and to the extent that the Administrative Agent
shall have made such portion available to the Borrower, such Lender and the
Borrower severally agree to repay or pay to the Administrative Agent on
demand such corresponding amount and to pay interest thereon, for each day
from the date such amount is made available to the Borrower until the date
such amount is repaid or paid to the Administrative Agent, at (i) in the case
of the Borrower, the interest rate applicable at such time under Section 2.07
to Advances comprising such Borrowing and (ii) in the case of such Lender,
the Federal Funds Rate. If such Lender shall pay to the Administrative Agent
such corresponding amount, such amount so paid shall constitute such Lender's
Advance as part of such Borrowing for all purposes.
SECTION 2.03. Issuance of and Drawings and Reimbursement Under Letters
of Credit. (a) Request for Issuance. Each Letter of Credit shall be issued
upon notice, given not later than 11:00 A.M. (Charlotte, North Carolina time)
on the tenth day prior to the date of the proposed issuance of such Letter of
Credit (or such later day as the Issuing Bank shall agree), by the Borrower
to the Issuing Bank, which shall give to the Administrative Agent and each
Working Capital Lender prompt notice thereof by telex or telecopier. Each
such notice of issuance of a Letter of Credit (a "Notice of Issuance") shall
be by telephone, confirmed promptly in writing, or by telex or telecopier,
specifying therein the requested (A) date of such issuance (which shall be a
Business Day), (B) Available Amount of such Letter of Credit, (C) expiration
date of such Letter of Credit, (D) name and address of the beneficiary of
such Letter of Credit and (E) form of such Letter of Credit, and shall be
accompanied by such application and agreement for letter of credit as the
Issuing Bank may specify to the Borrower for use in connection with such
requested Letter of Credit (a "Letter of Credit Agreement"). If the
requested form of such Letter of Credit is acceptable to the Issuing Bank in
its sole discretion, the Issuing Bank will, upon fulfillment of the
applicable conditions set forth in Article III, make such Letter of Credit
available to the Borrower at the Issuing Bank's office referred to in Section
8.02 or as otherwise agreed with the Borrower in connection with such
issuance. In the event and to the extent that the provisions of any Letter
of Credit Agreement shall conflict with this Agreement, the provisions of
this Agreement shall govern.
(b) Letter of Credit Reports. The Issuing Bank shall furnish (A) to the
Administrative Agent on the first Business Day of each week a written report
summarizing issuance and expiration dates of Letters of Credit issued during
the previous week and drawings
27
during such week under all Letters of Credit, (B) to each Working Capital
Lender on the first Business Day of each month a written report summarizing
issuance and expiration dates of Letters of Credit issued during the
preceding month and drawings during such month under all Letters of Credit
and (C) to the Administrative Agent, the Borrower and each Working Capital
Lender on the first Business Day of each calendar quarter a written report
setting forth the average daily aggregate Available Amount during the
preceding calendar quarter of all Letters of Credit.
(c) Drawing and Reimbursement. The payment by the Issuing Bank of a
draft drawn under any Letter of Credit shall constitute for all purposes of
this Agreement the making by the Issuing Bank of a Letter of Credit Advance,
which shall be a Prime Rate Advance, in the amount of such draft. Upon
written demand by the Issuing Bank, with a copy of such demand to the
Administrative Agent, each Working Capital Lender shall purchase from the
Issuing Bank, and the Issuing Bank shall sell and assign to each such Working
Capital Lender, such Lender's Pro Rata Share of such outstanding Letter of
Credit Advance as of the date of such purchase, by making available for the
account of its Applicable Lending Office to the Administrative Agent for the
account of the Issuing Bank, by deposit to the Administrative Agent's
Account, in same day funds, an amount equal to the portion of the outstanding
principal amount of such Letter of Credit Advance to be purchased by such
Lender. Promptly after receipt thereof, the Administrative Agent shall
transfer such funds to the Issuing Bank. The Borrower hereby agrees to each
such sale and assignment. Each Working Capital Lender agrees to purchase its
Pro Rata Share of an outstanding Letter of Credit Advance on (i) the Business
Day on which demand therefor is made by the Issuing Bank, provided notice of
such demand is given not later than 11:00 A.M. (Charlotte, North Carolina
time) on such Business Day or (ii) the first Business Day next succeeding
such demand if notice of such demand is given after such time. Upon any such
assignment by the Issuing Bank to any other Lender of a portion of a Letter
of Credit Advance, the Issuing Bank represents and warrants to such other
Lender that the Issuing Bank is the legal and beneficial owner of such
interest being assigned by it, free and clear of any liens, but makes no
other representation or warranty and assumes no responsibility with respect
to such Letter of Credit Advance, the Loan Documents or any Loan Party. If
and to the extent that any Working Capital Lender shall not have so made the
amount of such Letter of Credit Advance available to the Administrative
Agent, such Lender agrees to pay to the Administrative Agent forthwith on
demand such amount together with interest thereon, for each day from the date
of demand by the Issuing Bank until the date such amount is paid to the
Administrative Agent, at the Federal Funds Rate for its account or the
account of the Issuing Bank, as applicable. If such Lender shall pay to the
Administrative Agent such amount for the account of the Issuing Bank on any
Business Day, such amount so paid in respect of principal shall constitute a
Letter of Credit Advance made by such Lender on such Business Day for
purposes of this Agreement, and the outstanding principal amount of the
Letter of Credit Advance made by the Issuing Bank shall be reduced by such
amount on such Business Day (it being understood that any such payment by any
Lender is without prejudice to, and does not constitute a waiver of, any
right any Lender might have or might acquire as a result of the payment by
the Issuing Bank of any draft or the reimbursement by any Lender thereof).
(d) Failure to Make Letter of Credit Advances. The failure of any
Lender to make the Letter of Credit Advance to be made by it on the date
specified in Section 2.03(c) shall
28
not relieve any other Lender of its obligation hereunder to make its Letter
of Credit Advance on such date, but no Lender shall be responsible for the
failure of any other Lender to make the Letter of Credit Advance to be made
by such other Lender on such date.
SECTION 2.04. Repayment of Advances. (a) Working Capital Advances.
The Borrower shall repay to the Administrative Agent for the ratable account
of the Working Capital Lenders on the Termination Date the aggregate
principal amount of the Working Capital Advances then outstanding.
(b) Letter of Credit Advances. (i) The Borrower shall repay to the
Administrative Agent for the ratable account of the Issuing Bank and each
other Working Capital Lender that has made a Letter of Credit Advance on the
earlier of demand and the Termination Date the outstanding principal amount
of each Letter of Credit Advance made by each of them.
(ii) The payment Obligations of the Borrower under this Agreement, any
Letter of Credit Agreement and any other agreement or instrument relating to
any Letter of Credit shall be unconditional and irrevocable, and shall be
paid strictly in accordance with the terms of this Agreement, such Letter of
Credit Agreement and such other agreement or instrument under all
circumstances, including, without limitation, the following circumstances (it
being understood that any such payment by the Borrower is without prejudice
to, and does not constitute a waiver of, any rights the Borrower might have
or might acquire as a result of the payment by the Issuing Bank of any draft
or the reimbursement by the Borrower thereof):
(A) any lack of validity or enforceability of any Loan
Document, any Letter of Credit Agreement, any Letter of Credit or any
other agreement or instrument relating thereto (all of the foregoing
being, collectively, the "L/C Related Documents");
(B) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Obligations of the Borrower
in respect of any L/C Related Document or any other amendment or
waiver of or any consent to departure from all or any of the L/C
Related Documents;
(C) the existence of any claim, set-off, defense or other right
that the Borrower may have at any time against any beneficiary or any
transferee of a Letter of Credit (or any Persons for whom any such
beneficiary or any such transferee may be acting), the Issuing Bank
or any other Person, whether in connection with the transactions
contemplated by the L/C Related Documents or any unrelated
transaction;
(D) any statement or any other document presented under a
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;
(E) payment by the Issuing Bank under a Letter of Credit
against presentation of a draft or certificate that does not strictly
comply with the terms of such Letter of Credit;
29
(F) any exchange, release or non-perfection of any Collateral
or other collateral, or any release or amendment or waiver of or
consent to departure from the Guaranty or any other guarantee, for
all or any of the Obligations of the Borrower in respect of the L/C
Related Documents; or
(G) any other circumstance or happening whatsoever, whether or
not similar to any of the foregoing, including, without limitation,
any other circumstance that might otherwise constitute a defense
available to, or a discharge of, the Borrower or a guarantor.
SECTION 2.05. Termination or Reduction of the Commitments. (a)
Optional. The Borrower may, upon at least five Business Days' notice to the
Administrative Agent, terminate in whole or reduce in part the Unused Working
Capital Commitments; provided, however, that each partial reduction (i) shall
be in an aggregate amount of $2,000,000 or an integral multiple of $500,000
in excess thereof and (ii) shall be made ratably among the Appropriate
Lenders in accordance with their Commitments with respect to such Facility.
(b) Mandatory. (i) The Letter of Credit Facility shall be permanently
reduced from time to time on the date of each reduction in the Working
Capital Facility by the amount, if any, by which the amount of (A) the Letter
of Credit Facility less (B) the maximum amount available to be drawn
(assuming compliance at such time with all conditions to drawing) under all
letters of credit issued for the benefit of the Administrative Agent under
the Captain D's Financing and the Commissary Financing exceeds the Working
Capital Facility after giving effect to such reduction of the Working Capital
Facility.
(ii) The Working Capital Facility shall be automatically and
permanently reduced on each date on which a prepayment is to be made pursuant
to Section 2.06(b)(i) in an amount equal to the amount of such prepayment,
provided, however, that each such reduction of the Working Capital Facility
shall be made:
(A) where such prepayment occurs as the result of a sale,
lease, transfer or other disposition of any assets other than those
set forth on Schedule 2.06, first, ratably among the Working Capital
Lenders (other than Columbus Bank and Trust Company) in accordance
with their Working Capital Commitments and second, to the Working
Capital Commitment of the Columbus Bank and Trust Company; and
(B) where such prepayment occurs as the result of a sale,
lease, transfer or other disposition of any assets set forth on
Schedule 2.06, first to the Working Capital Commitment of the
Columbus Bank and Trust Company and second, ratably among the Working
Capital Lenders (other than Columbus Bank and Trust Company) in
accordance with their Working Capital Commitments.
SECTION 2.06. Prepayments. (a) Optional. The Borrower may, upon at
least one Business Day's notice in the case of Prime Rate Advances and three
Business Day's notice in the case of Eurodollar Rate Advances, in each case
to the Administrative Agent stating the proposed date and aggregate principal
amount of the prepayment, and if such notice is given the Borrower shall,
prepay the outstanding aggregate principal amount of the Advances comprising
30
part of the same Borrowing in whole or ratably in part, together with accrued
interest to the date of such prepayment on the aggregate principal amount
prepaid; provided, however, that (x) each partial prepayment shall be in an
aggregate principal amount of $2,000,000 or an integral multiple of $500,000
in excess thereof and (y) if any prepayment of a Eurodollar Rate Advance is
made on a date other than the last day of an Interest Period for such Advance
the Borrower shall also pay any amounts owing pursuant to Section 8.04(c).
(b) Mandatory. (i) The Borrower shall, within five (5) Business Days
following the date of receipt of the Net Cash Proceeds by any Loan Party
(unless the Borrower elects to deposit such Net Cash Proceeds in the Cash
Collateral Account on terms and conditions reasonably satisfactory to the
Administrative Agent) from:
(A) the sale, lease, transfer or other disposition of any
assets of any Loan Party (other than any sale, lease, transfer or
other disposition of assets pursuant to section 5.02(e)(i), (ii),
(iii), (v), (vi) or (vii)), or
(B) the incurrence or issuance by any Loan Party of any Debt
(other than Debt incurred or issued as permitted by Section 5.02(b)),
or
(C) the sale or issuance by any Loan Party of any Equity
Interests (other than as permitted by subsection (d), (e), (f) or (g)
of Section 5.02), or
(D) any Extraordinary Receipt received by or paid to or for the
account of any Loan Party and not otherwise included in clause (A),
(B) or (C) above,
first, prepay an aggregate principal amount of the Working Capital Advances
comprising part of the same Borrowings and second, deposit the remainder
thereof in the L/C Cash Collateral Account in an amount equal to the amount
of such Net Cash Proceeds; provided, however, that the first $15.0 million of
Net Cash Proceeds included in clause (A) above that result from the sale,
lease, transfer or other disposition of any assets of any Loan Party shall
not be subject to the provisions of this Section 2.06(b)(i) to the extent
such Net Cash Proceeds are reinvested in the business of the Borrower and its
Subsidiaries (other than Captain D's, COI and their respective Subsidiaries),
provided further, however, that Net Cash Proceeds from the assets set forth
on Schedule 2.06 shall not be subject to this proviso as long as Columbus
Bank and Trust Company has a Working Capital Commitment. Any prepayment made
pursuant to this Section 2.06(b)(i) shall be applied among the Working
Capital Lenders so as to make the Working Capital Advances outstanding after
giving effect to such prepayment ratable with the Commitments of the Working
Capital Lenders after giving effect to the related reductions in the Working
Capital Commitments pursuant to Section 2.05(b)(ii).
(ii) The Borrower shall, on each Business Day, prepay an aggregate
principal amount of the Working Capital Advances comprising part of the same
Borrowings and the Letter of Credit Advances equal to the amount by which (A)
the sum of the aggregate principal amount of (x) the Working Capital Advances
and (y) the Letter of Credit Advances then outstanding less the aggregate
Available Amount of all Letters of Credit then outstanding plus the maximum
amount available to be drawn (assuming compliance at such time with all
conditions to drawing) under all letters of credit issued for the benefit of
the Administrative Agent under the Captain D's
31
Financing and the Commissary Financing exceeds (B) the Working Capital
Facility on such Business Day. Prepayments of the Working Capital Facility
made pursuant to this clause (ii) shall be first, applied to prepay Letter of
Credit Advances then outstanding until such Advances are paid in full, then
outstanding until such Advances are paid in full, and second, applied to
prepay Working Capital Advances then outstanding comprising part of the same
Borrowings until such Advances are paid in full.
(iii) The Borrower shall, on each Business Day, pay to the
Administrative Agent for deposit in the L/C Cash Collateral Account an amount
sufficient to cause the aggregate amount on deposit in such Account to equal
the amount by which the aggregate Available Amount of all Letters of Credit
then outstanding exceeds the Letter of Credit Facility on such Business Day.
(iv) All prepayments under this subsection (b) shall be made together
with accrued interest to the date of such prepayment on the principal amount
prepaid.
SECTION 2.07. Interest. (a) Scheduled Interest. The Borrower shall pay
interest on the unpaid principal amount of each Advance owing to each Lender
from the date of such Advance until such principal amount shall be paid in
full, at the following rates per annum:
(i) Prime Rate Advances. During such periods as such Advance
is a Prime Rate Advance, a rate per annum equal at all times to the
sum of (A) the Prime Rate in effect from time to time plus (B) the
Applicable Margin in effect from time to time, payable in arrears
(subject to the provisions of Section 2.11) on the last Business Day
of each March, June, September and December during such periods and
on the date such Prime Rate Advance shall be Converted or paid in
full.
(ii) Eurodollar Rate Advances. During such periods as such
Advance is a Eurodollar Rate Advance, a rate per annum equal at all
times during each Interest Period for such Advance to the sum of (A)
the Eurodollar Rate for such Interest Period for such Advance plus
(B) the Applicable Margin in effect on the first day of such Interest
Period for such Advance, payable in arrears on the last day of such
Interest Period and, if such Interest Period has a duration of more
than three months, on each day that occurs during such Interest
Period every three months from the first day of such Interest Period
and on the date such Eurodollar Rate Advance shall be Converted or
paid in full.
(b) Default Interest. Upon the occurrence and during the continuance of
an Event of Default, the Borrower shall pay interest on (i) the unpaid
principal amount of each Advance owing to each Lender, payable in arrears on
the dates referred to in clause (a)(i) or (a)(ii) above and on demand, at a
rate per annum equal at all times to 2% per annum above the rate per annum
required to be paid on such Advance pursuant to clause (a)(i) or (a)(ii)
above and (ii) to the fullest extent permitted by law, the amount of any
interest, fee or other amount payable hereunder that is not paid when due,
from the date such amount shall be due until such amount shall be paid in
full, payable in arrears on the date such amount shall be paid in full and on
demand, at a rate per annum equal at all times to 2% per annum above the rate
per annum required to be paid, in the case of interest, on the Type of
Advance on which such interest has
32
accrued pursuant to clause (a)(i) or (a)(ii) above, and, in all other cases,
on Prime Rate Advances pursuant to clause (a)(i) above.
(c) Notice of Interest Rate. Promptly after receipt of a Notice of
Borrowing pursuant to Section 2.02(a), the Administrative Agent shall give
notice to the Borrower and each Appropriate Lender of the applicable interest
rate determined by the Administrative Agent for purposes of clause (a)(i) or
(ii).
SECTION 2.08. Fees. (a) Commitment Fee. The Borrower shall pay to the
Administrative Agent for the account of the Lenders a commitment fee, from
the date hereof in the case of each Initial Lender and from the effective
date specified in the Assignment and Acceptance pursuant to which it became
a Lender in the case of each other Lender until the Termination Date, payable
in arrears on the date of the initial Borrowing hereunder, on the last
Business Day of each March, June, September and December, commencing
September 30, 2000, and on the Termination Date, equal to (i) the average
daily Unused Working Capital Commitment of such Lender for the prior three
month period (or such shorter period for which such commitment fee is
calculated) times (ii) 0.50%; provided, however, that any commitment fee
accrued with respect to any of the Commitments of a Defaulting Lender during
the period prior to the time such Lender became a Defaulting Lender and
unpaid at such time shall not be payable by the Borrower so long as such
Lender shall be a Defaulting Lender except to the extent that such commitment
fee shall otherwise have been due and payable by the Borrower prior to such
time; and provided further that no commitment fee shall accrue on any of the
Commitments of a Defaulting Lender so long as such Lender shall be a
Defaulting Lender.
(b) Letter of Credit Fees, Etc. (i) The Borrower shall pay to the
Administrative Agent for the account of each Lender a commission, payable in
arrears on the last Business Day of each March, June, September and December,
commencing September 30, 2000, and on the earliest to occur of the full
drawing expiration, termination or cancellation of any such Letter of Credit
and on the Termination Date, equal to (A) such Lender's Pro Rata Share of the
average daily aggregate Available Amount for the prior three month period (or
such shorter period for which such commission is calculated) of all Letters
of Credit outstanding from time to time times (B) the Applicable Margin per
annum then in effect for Eurodollar Rate Advances under the Working Capital
Facility, determined on the basis that the proviso in the definition of
"Applicable Margin" shall apply to the extent of the amount available to be
drawn (assuming compliance at such time with all conditions to drawing) under
all letters of credit issued for the benefit of the Administrative Agent
under the Captain D's Financing and the Commissary Financing.
(ii) The Borrower shall pay to the Issuing Bank, for its own account,
(A) a fronting fee, payable in arrears, on the last Business Day of each
March, June, September and December, commencing September 30, 2000, and on
the Termination Date, equal to (A) the average daily aggregate Available
Amount for the prior three month period (or such shorter period for which
such fronting fee is calculated), from the date hereof until the Termination
Date, times (B) 0.125% per annum, and (B) such other reasonable and customary
commissions, fronting fees, transfer fees and other fees and charges in
connection with the issuance or administration of each Letter of Credit as
the Borrower and the Issuing Bank shall agree.
33
(c) Administrative Agent's Fees. The Borrower shall pay to the
Administrative Agent for its own account fees set forth in the Administrative
Agent's fee letter.
SECTION 2.09. Conversion of Advances. (a) Optional. The Borrower may
on any Business Day, upon notice given to the Administrative Agent not later
than 11:00 A.M. (Charlotte, North Carolina) on the third Business Day prior
to the date of the proposed Conversion and subject to the provisions of
Sections 2.07 and 2.10, Convert all or any portion of the Advances of one
Type comprising the same Borrowing into Advances of the other Type; provided,
however, that, except as provided in Section 2.10(a), any Conversion of
Eurodollar Rate Advances into Prime Rate Advances shall be made only on the
last day of an Interest Period for such Eurodollar Rate Advances, any
Conversion of Prime Rate Advances into Eurodollar Rate Advances shall be in
an amount not less than the minimum amount specified in Section 2.02(c), no
Conversion of any Advances shall result in more separate Borrowings than
permitted under Section 2.02(c) and each Conversion of Advances comprising
part of the same Borrowing under any Facility shall be made ratably among the
Appropriate Lenders in accordance with their Commitments under such Facility.
Each such notice of Conversion shall, within the restrictions specified
above, specify (i) the date of such Conversion, (ii) the Advances to be
Converted and (iii) if such Conversion is into Eurodollar Rate Advances, the
duration of the initial Interest Period for such Advances. Each notice of
Conversion shall be irrevocable and binding on the Borrower.
(b) Mandatory. (i) On the date on which the aggregate unpaid principal
amount of Eurodollar Rate Advances comprising any Borrowing shall be reduced,
by payment or prepayment or otherwise, to less than $2,000,000, such Advances
shall automatically Convert into Prime Rate Advances.
(ii) If the Borrower shall fail to select the duration of any Interest
Period for any Eurodollar Rate Advances in accordance with the provisions
contained in the definition of "Interest Period" in Section 1.01, the
Administrative Agent will forthwith so notify the Borrower and the
Appropriate Lenders, whereupon each such Eurodollar Rate Advance will
automatically, on the last day of the then existing Interest Period therefor,
Convert into a Prime Rate Advance.
(iii) Upon the occurrence and during the continuance of any Event of
Default, (x) each Eurodollar Rate Advance will automatically, on the last day
of the then existing Interest Period therefor, Convert into a Prime Rate
Advance and (y) the obligation of the Lenders to make, or to Convert Advances
into, Eurodollar Rate Advances shall be suspended.
SECTION 2.10. Increased Costs, Etc. (a) If, due to either (i) the
introduction of or any change in or in the interpretation of any law or
regulation or (ii) the compliance with any guideline or request from any
central bank or other governmental authority (whether or not having the force
of law), there shall be any increase in the cost to any Lender Party of
agreeing to make or of making, funding or maintaining Eurodollar Rate
Advances or of agreeing to issue or of issuing or maintaining Letters of
Credit or of agreeing to make or of making or maintaining Letter of Credit
Advances (excluding for purposes of this Section 2.10 any such increased
costs resulting from (i) Taxes or Other Taxes (as to which Section 2.12 shall
govern) and (ii) changes in the basis of taxation of overall net income or
overall gross income by the United States or by
34
the foreign jurisdiction or state under the laws of which such Lender Party
is organized or has its Applicable Lending Office or any political
subdivision thereof), then the Borrower shall from time to time, upon demand
by such Lender Party (with a copy of such demand to the Administrative
Agent), pay to the Administrative Agent for the account of such Lender Party
additional amounts sufficient to compensate such Lender Party for such
increased cost; provided, however, that a Lender Party claiming additional
amounts under this Section 2.10(a) agrees to use reasonable efforts
(consistent with its internal policy and legal and regulatory restrictions)
to designate a different Applicable Lending Office if the making of such a
designation would avoid the need for, or reduce the amount of, such increased
cost that may thereafter accrue and would not, in the reasonable judgment of
such Lender Party, be otherwise disadvantageous to such Lender Party. A
certificate as to the amount of such increased cost, submitted to the
Borrower by such Lender Party, shall be conclusive and binding for all
purposes, absent manifest error. Upon receipt of notice from a Lender Party
claiming compensation pursuant to this Section 2.10(a) and so long as no
Event of Default shall have occurred and be continuing, the Borrower shall
have the right, on or before the 30th day after receipt of such notice, to
Convert each Eurodollar Rate Advance under which such Lender has a Commitment
into a Prime Rate Advance, subject to payment in full of (i) all amounts
necessary to compensate such Lender for such increased costs and (ii) any
amounts owing pursuant to Section 8.04(c) as a result of such conversion.
(b) If, due to either (i) the introduction of or any change in or in the
interpretation of any law or regulation or (ii) the compliance with any
guideline or request from any central bank or other governmental authority
(whether or not having the force of law), there shall be any increase in the
amount of capital required or expected to be maintained by any Lender Party
or any corporation controlling such Lender Party as a result of or based upon
the existence of such Lender Party's commitment to lend or to issue Letters
of Credit hereunder and other commitments of such type or the issuance or
maintenance of the Letters of Credit (or similar contingent obligations),
then, upon demand by such Lender Party (with a copy of such demand to the
Administrative Agent), the Borrower shall pay to the Administrative Agent for
the account of such Lender Party, from time to time as specified by such
Lender Party, additional amounts sufficient to compensate such Lender Party
in the light of such circumstances, to the extent that such Lender Party
reasonably determines such increase in capital to be allocable to the
existence of such Lender Party's commitment to lend or to issue Letters of
Credit hereunder or to the issuance or maintenance of any Letters of Credit.
A certificate as to such amounts submitted to the Borrower by such Lender
Party shall be conclusive and binding for all purposes, absent manifest
error.
(c) If, with respect to any Eurodollar Rate Advances under any Facility,
Lenders owed more than 50% of the then aggregate unpaid principal amount
thereof notify the Administrative Agent that the Eurodollar Rate for any
Interest Period for such Advances will not adequately reflect the cost to
such Lenders of making, funding or maintaining their Eurodollar Rate Advances
for such Interest Period, the Administrative Agent shall forthwith so notify
the Borrower and the Lenders, whereupon (i) each such Eurodollar Rate Advance
under any Facility will automatically, on the last day of the then existing
Interest Period therefor, Convert into a Prime Rate Advance and (ii) the
obligation of the Appropriate Lenders to make, or to Convert Advances into,
Eurodollar Rate Advances shall be suspended until the Administrative Agent
35
shall notify the Borrower that such Lenders have determined that the
circumstances causing such suspension no longer exist.
(d) Notwithstanding any other provision of this Agreement, if the
introduction of or any change in or in the interpretation of any law or
regulation shall make it unlawful, or any central bank or other governmental
authority shall assert that it is unlawful, for any Lender or its Eurodollar
Lending Office to perform its obligations hereunder to make Eurodollar Rate
Advances or to continue to fund or maintain Eurodollar Rate Advances
hereunder, then, on notice thereof and demand therefor by such Lender to the
Borrower through the Administrative Agent, (i) each Eurodollar Rate Advance
made by such Lender will automatically, upon such demand, Convert into a
Prime Rate Advance, and (ii) the obligation of such Lender to make, or to
Convert Advances into, Eurodollar Rate Advances shall be suspended until the
Administrative Agent shall notify the Borrower that such Lender has
determined that the circumstances causing such suspension no longer exist;
provided, however, that, before making any such demand, such Lender agrees to
use reasonable efforts (consistent with its internal policy and legal and
regulatory restrictions) to designate a different Eurodollar Lending Office
if the making of such a designation would allow such Lender or its Eurodollar
Lending Office to continue to perform its obligations to make Eurodollar Rate
Advances or to continue to fund or maintain Eurodollar Rate Advances and
would not, in the judgment of such Lender, be otherwise disadvantageous to
such Lender.
SECTION 2.11. Payments and Computations. (a) The Borrower shall make
each payment hereunder and under the Notes, irrespective of any right of
counterclaim or set-off (except as otherwise provided in Section 2.15), not
later than 11:00 A.M. (Charlotte, North Carolina time) on the day when due in
U.S. dollars to the Administrative Agent at the Administrative Agent's
Account in same day funds. The Administrative Agent will promptly thereafter
cause like funds to be distributed (i) if such payment by the Borrower is in
respect of principal, interest, commitment fees or any other Obligation then
payable hereunder and under the Notes to more than one Lender Party, to such
Lender Parties for the account of their respective Applicable Lending Offices
ratably in accordance with the amounts of such respective Obligations then
payable to such Lender Parties and (ii) if such payment by the Borrower is in
respect of any Obligation then payable hereunder to one Lender Party, to such
Lender Party for the account of its Applicable Lending Office, in each case
to be applied in accordance with the terms of this Agreement. Upon its
acceptance of an Assignment and Acceptance and recording of the information
contained therein in the Register pursuant to Section 8.07(d), from and after
the effective date of such Assignment and Acceptance, the Administrative
Agent shall make all payments hereunder and under the Notes in respect of the
interest assigned thereby to the Lender Party assignee thereunder, and the
parties to such Assignment and Acceptance shall make all appropriate
adjustments in such payments for periods prior to such effective date
directly between themselves.
(b) If the Administrative Agent receives funds for application to the
Obligations under the Loan Documents under circumstances for which the Loan
Documents do not specify the Advances or the Facility to which, or the manner
in which, such funds are to be applied, the Administrative Agent may, but
shall not be obligated to, elect to distribute such funds to each Lender
Party ratably in accordance with such Lender Party's proportionate share of
36
the principal amount of all outstanding Advances and the Available Amount of
all Letters of Credit then outstanding, in repayment or prepayment of such of
the outstanding Advances or other Obligations owed to such Lender Party, and
for application to such principal installments, as the Administrative Agent
shall direct.
(c) The Borrower hereby authorizes each Lender Party, if and to the
extent payment owed to such Lender Party is not made when due hereunder or,
in the case of a Lender, under the Note held by such Lender, to charge from
time to time against any or all of the Borrower's accounts with such Lender
Party any amount so due.
(d) All computations of interest, fees and Letter of Credit commissions
shall be made by the Administrative Agent on the basis of a year of 360 days,
in each case for the actual number of days (including the first day but
excluding the last day) occurring in the period for which such interest, fees
or commissions are payable. Each determination by the Administrative Agent
of an interest rate, fee or commission hereunder shall be conclusive and
binding for all purposes, absent manifest error.
(e) Whenever any payment hereunder or under the Notes shall be stated to
be due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day, and such extension of time shall in such case
be included in the computation of payment of interest or commitment fee, as
the case may be; provided, however, that, if such extension would cause
payment of interest on or principal of Eurodollar Rate Advances to be made in
the next following calendar month, such payment shall be made on the next
preceding Business Day.
(f) Unless the Administrative Agent shall have received notice from the
Borrower prior to the date on which any payment is due to any Lender Party
hereunder that the Borrower will not make such payment in full, the
Administrative Agent may assume that the Borrower has made such payment in
full to the Administrative Agent on such date and the Administrative Agent
may, in reliance upon such assumption, cause to be distributed to each such
Lender Party on such due date an amount equal to the amount then due such
Lender Party. If and to the extent the Borrower shall not have so made such
payment in full to the Administrative Agent, each such Lender Party shall
repay to the Administrative Agent forthwith on demand such amount distributed
to such Lender Party together with interest thereon, for each day from the
date such amount is distributed to such Lender Party until the date such
Lender Party repays such amount to the Administrative Agent, at the Federal
Funds Rate.
SECTION 2.12. Taxes (a) Any and all payments by the Borrower and each
other Loan Party to or for the account of any Lender Party or the
Administrative Agent hereunder or under any other Loan Document shall be
made, in accordance with Section 2.11 or the applicable provisions of such
other Loan Document, free and clear of and without deduction for any and all
present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding, in the
case of each Lender Party and the Administrative Agent, taxes that are
imposed on its overall net income by the United States and taxes that are
imposed on or measured by its overall net income (and franchise taxes or
excise taxes pursuant to Sections 67-4-2001 through 67-4-2018 and Sections
67-4-2101 through 67-4-
37
2120 of the Tennessee Code Annotated imposed in lieu thereof) by the state or
foreign jurisdiction under the laws of which such Lender Party or the
Administrative Agent (as the case may be) is organized or any political
subdivision thereof and, in the case of each Lender Party, taxes that are
imposed on or measured by its overall net income (and franchise taxes imposed
or excise taxes pursuant to Sections 67-4-2001 through 67-4-2018 and Sections
67-4-2101 through 67-4-2120 of the Tennessee Code Annotated in lieu thereof)
by the state or foreign jurisdiction of such Lender Party's Applicable
Lending Office or any political subdivision thereof (all such non-excluded
taxes, levies, imposts, deductions, charges, withholdings and liabilities in
respect of payments hereunder or under any other Loan Document being
hereinafter referred to as "Taxes"). If any Loan Party shall be required by
law to deduct any Taxes from or in respect of any sum payable hereunder or
under any other Loan Document to any Lender Party or the Administrative
Agent, (i) the sum payable shall be increased as may be necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section 2.12) such Lender Party or the
Administrative Agent (as the case may be) receives an amount equal to the
sum it would have received had no such deductions been made, (ii) the Loan
Party shall make such deductions and (iii) the Borrower shall pay the full
amount deducted to the relevant taxation authority or other governmental
authority in accordance with applicable law and (iv) within 30 days after
the date of any payment of Taxes, the Borrower shall furnish to the
Administrative Agent, at its address referred to in Section 8.02, the
original or a certified copy of a receipt evidencing such payment.
(b) In addition, the Borrower and each other Loan Party shall pay any
present or future stamp, documentary, excise, property or similar taxes,
charges or levies that arise from any payment made hereunder or under any
other Loan Document or from the execution, delivery or registration of,
performance under, or otherwise with respect to, this Agreement or any other
Loan Document (hereinafter referred to as "Other Taxes").
(c) The Borrower and each other Loan Party shall indemnify each Lender
Party and the Administrative Agent for and hold it harmless against the full
amount of Taxes and Other Taxes (including, without limitation, the full
amount of taxes of any kind imposed or asserted by any jurisdiction on
amounts payable under this Section 2.12), imposed on or paid by such Lender
Party or the Administrative Agent (as the case may be) and any liability
(including penalties, additions to tax, interest and expenses) arising
therefrom or with respect thereto. This indemnification shall be made within
30 days from the date such Lender Party or the Administrative Agent (as the
case may be) makes written demand therefor.
(d) In the case of any payment hereunder or under any other Loan
Document by or on behalf of the Borrower through an account or branch outside
the United States or by or on behalf of the Borrower by a payor that is not
a United States person, if the Borrower determines that no Taxes are payable
in respect thereof, the Borrower shall furnish, or shall cause such payor to
furnish, to the Administrative Agent, at such address, an opinion of counsel
acceptable to the Administrative Agent stating that such payment is exempt
from Taxes. For purposes of this subsection (d) and subsection (e) of this
Section 2.12, the terms "United States" and "United States person" shall have
the meanings specified in Section 7701 of the Internal Revenue Code.
38
(e) Each Lender Party organized under the laws of a jurisdiction outside
the United States shall, on or prior to the date of its execution and
delivery of this Agreement in the case of each Initial Lender or Initial
Issuing Bank, as the case may be, and on or prior to the date of the
Assignment and Acceptance pursuant to which it becomes a Lender Party in the
case of each other Lender Party, and from time to time thereafter as
reasonably requested in writing by the Borrower (but only so long thereafter
as such Lender Party remains lawfully able to do so), provide each of the
Administrative Agent and the Borrower either with two original Internal
Revenue Service Forms W-8BEN, W-8IMY or W-8ECI, as appropriate, or any
successor or other form prescribed by the Internal Revenue Service or in the
case of a Lender Party that has certified in writing to the Administrative
Agent that it is not (i) a "bank" as defined in Section 881(c)(3)(A) of the
Internal Revenue Code), (ii) a 10-percent shareholder (within the meaning of
Section 871(h)(3)(B) of the Internal Revenue Code) of the Borrower or (iii)
a controlled foreign corporation related to the Borrower (within the meaning
of Section 864(d)(4) of the Internal Revenue Code), an Internal Revenue
Service Form W-8BEN or Form W-8IMY as appropriate, or any successor or other
form prescribed by the Internal Revenue Service, certifying that such Lender
Party is exempt from or entitled to a reduced rate of United States
withholding tax on payments pursuant to this Agreement or any other Loan
Document or, in the case of a Lender Party that is not a "bank" as described
above, certifying that such Lender Party is a foreign corporation,
partnership, estate or trust. If the forms provided by a Lender Party at the
time such Lender Party first becomes a party to this Agreement indicate a
United States interest withholding tax rate in excess of zero, withholding
tax at such rate shall be considered excluded from Taxes unless and until
such Lender Party provides the appropriate forms certifying that a lesser
rate applies, whereupon withholding tax at such lesser rate only shall be
considered excluded from Taxes for periods governed by such form; provided,
however, that, if at the date of the Assignment and Acceptance pursuant to
which a Lender Party becomes a party to this Agreement, the Lender Party
assignor was entitled to payments under subsection (a) of this Section 2.12
in respect of United States withholding tax with respect to interest paid at
such date, then, to such extent, the term Taxes shall include (in addition to
withholding taxes that may be imposed in the future or other amounts
otherwise includable in Taxes) United States withholding tax, if any,
applicable with respect to the Lender Party assignee on such date. If any
form or document referred to in this subsection (e) requires the disclosure
of information, other than information necessary to compute the tax payable
and information required on the date hereof by Internal Revenue Service Forms
X-0XXX, X-0XXX or W-8IMY or the related certificate described above, that the
Lender Party reasonably considers to be confidential, the Lender Party shall
give notice thereof to the Borrower and shall not be obligated to include in
such form or document such confidential information.
(f) For any period with respect to which a Lender Party has failed to
provide the Borrower or the Administrative Agent with the appropriate form,
certificate or other document described in subsection (e) above (other than
if such failure is due to a change in law, or in the interpretation or
application thereof, occurring after the date on which a form, certificate or
other document originally was required to be provided or if such form,
certificate or other document otherwise is not required under subsection (e)
above), such Lender Party shall not be entitled to indemnification under
subsection (a) or (c) of this Section 2.12 with respect to Taxes imposed by
the United States by reason of such failure; provided, however, that should
a Lender Party become subject to Taxes because of its failure to deliver a
form, certificate or other
39
document required hereunder, the Borrower shall take such steps as such
Lender Party shall reasonably request to assist such Lender Party to recover
such Taxes. For purposes of this Section 2.12, the entry into force of the
final U.S. Department of Treasury regulations promulgated under Sections 1441
and 1442 of the Internal Revenue Code, published but not yet effective as of
the date of this Agreement, will not be considered a change in the applicable
law or in the interpretation or application thereof.
(g) Nothing herein contained shall be construed to require that the
Borrower pay any mortgage tax under the laws of the State of Oklahoma.
(h) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained
in this Section 2.12 shall survive the repayment of the Advances and the
other obligations under the Loan Documents and the termination of the
Commitments hereunder.
SECTION 2.13. Sharing of Payments, Etc. If any Lender Party shall
obtain at any time any payment (whether voluntary, involuntary, through the
exercise of any right of set-off, or otherwise) (other than pursuant to
Section 2.10, 2.12, 8.04 or 8.07 hereof) (a) on account of Obligations due
and payable to such Lender Party hereunder and under the Notes at such time
in excess of its ratable share (according to the proportion of (i) the amount
of such Obligations due and payable to such Lender Party at such time to (ii)
the aggregate amount of the Obligations due and payable to all Lender Parties
hereunder and under the Notes at such time) of payments on account of the
Obligations due and payable to all Lender Parties hereunder and under the
Notes at such time obtained by all the Lender Parties at such time or (b) on
account of Obligations owing (but not due and payable) to such Lender Party
hereunder and under the Notes at such time in excess of its ratable share
(according to the proportion of (i) the amount of such Obligations owing to
such Lender Party at such time to (ii) the aggregate amount of the
Obligations owing (but not due and payable) to all Lender Parties hereunder
and under the Notes at such time) of payments on account of the Obligations
owing (but not due and payable) to all Lender Parties hereunder and under the
Notes at such time obtained by all of the Lender Parties at such time, such
Lender Party shall forthwith purchase from the other Lender Parties such
participations in the Obligations due and payable or owing to them, as the
case may be, as shall be necessary to cause such purchasing Lender Party to
share the excess payment ratably with each of them; provided, however, that
if all or any portion of such excess payment is thereafter recovered from
such purchasing Lender Party, such purchase from each other Lender Party
shall be rescinded and such other Lender Party shall repay to the purchasing
Lender Party the purchase price to the extent of such Lender Party's ratable
share (according to the proportion of (i) the purchase price paid to such
Lender Party to (ii) the aggregate purchase price paid to all Lender Parties)
of such recovery together with an amount equal to such Lender Party's ratable
share (according to the proportion of (i) the amount of such other Lender
Party's required repayment to (ii) the total amount so recovered from the
purchasing Lender Party) of any interest or other amount paid or payable by
the purchasing Lender Party in respect of the total amount so recovered. The
Borrower agrees that any Lender Party so purchasing a participation from
another Lender Party pursuant to this Section 2.13 may, to the fullest extent
permitted by law, exercise all its rights of payment (including the right of
set-off) with respect to such participation
40
as fully as if such Lender Party were the direct creditor of the Borrower in
the amount of such participation.
SECTION 2.14. Use of Proceeds and Issuance of Letters of Credit. The
proceeds of the Advances and issuances of Letters of Credit shall be
available (and the Borrower agrees that it shall use such proceeds and
Letters of Credit) solely to provide funds for general corporate purposes and
provide working capital for the Borrower and its Subsidiaries.
SECTION 2.15. Defaulting Lenders. (a) In the event that, at any one
time, (i) any Lender Party shall be a Defaulting Lender, (ii) such Defaulting
Lender shall owe a Defaulted Advance to the Borrower and (iii) the Borrower
shall be required to make any payment hereunder or under any other Loan
Document to or for the account of such Defaulting Lender, then the Borrower
may, so long as no Default shall occur or be continuing at such time and to
the fullest extent permitted by applicable law, set off and otherwise apply
the Obligation of the Borrower to make such payment to or for the account of
such Defaulting Lender against the obligation of such Defaulting Lender to
make such Defaulted Advance. In the event that, on any date, the Borrower
shall so set off and otherwise apply its obligation to make any such payment
against the obligation of such Defaulting Lender to make any such Defaulted
Advance on or prior to such date, the amount so set off and otherwise applied
by the Borrower shall constitute for all purposes of this Agreement and the
other Loan Documents an Advance by such Defaulting Lender made on the date of
set-off or application by the Borrower under the Facility pursuant to which
such Defaulted Advance was originally required to have been made pursuant to
Section 2.01. Such Advance shall be a Prime Rate Advance and shall be
considered, for all purposes of this Agreement, to comprise part of the
Borrowing in connection with which such Defaulted Advance was originally
required to have been made pursuant to Section 2.01, even if the other
Advances comprising such Borrowing shall be Eurodollar Rate Advances on the
date such Advance is deemed to be made pursuant to this subsection (a). The
Borrower shall notify the Administrative Agent at any time the Borrower
exercises its right of set-off pursuant to this subsection (a) and shall set
forth in such notice (A) the name of the Defaulting Lender and the Defaulted
Advance required to be made by such Defaulting Lender and (B) the amount set
off and otherwise applied in respect of such Defaulted Advance pursuant to
this subsection (a). Any portion of such payment otherwise required to be
made by the Borrower to or for the account of such Defaulting Lender which is
paid by the Borrower, after giving effect to the amount set off and otherwise
applied by the Borrower pursuant to this subsection (a), shall be applied by
the Administrative Agent as specified in subsection (b) or (c) of this
Section 2.15.
(b) In the event that, at any one time, (i) any Lender Party shall be a
Defaulting Lender, (ii) such Defaulting Lender shall owe a Defaulted Amount
to the Administrative Agent or any of the other Lender Parties and (iii) the
Borrower shall make any payment hereunder or under any other Loan Document to
the Administrative Agent for the account of such Defaulting Lender, then the
Administrative Agent may, on its behalf or on behalf of such other Lender
Parties and to the fullest extent permitted by applicable law, apply at such
time the amount so paid by the Borrower to or for the account of such
Defaulting Lender to the payment of each such Defaulted Amount to the extent
required to pay such Defaulted Amount. In the event that the Administrative
Agent shall so apply any such amount to the payment of any such Defaulted
Amount on any date, the amount so applied by the
41
Administrative Agent shall constitute for all purposes of this Agreement and
the other Loan Documents payment, to such extent, of such Defaulted Amount on
such date. Any such amount so applied by the Administrative Agent shall be
retained by the Administrative Agent or distributed by the Administrative
Agent to such other Lender Parties, ratably in accordance with the respective
portions of such Defaulted Amounts payable at such time to the Administrative
Agent and such other Lender Parties and, if the amount of such payment made
by the Borrower shall at such time be insufficient to pay all Defaulted
Amounts owing at such time to the Administrative Agent and the other Lender
Parties, in the following order of priority:
(i) first, to the Administrative Agent for any Defaulted Amount
then owing to the Administrative Agent; and
(ii) second, to any other Lender Parties for any Defaulted
Amounts then owing to such other Lender Parties, ratably in
accordance with such respective Defaulted Amounts then owing to such
other Lender Parties.
Any portion of such amount paid by the Borrower for the account of such
Defaulting Lender remaining, after giving effect to the amount applied by the
Administrative Agent pursuant to this subsection (b), shall be applied by the
Administrative Agent as specified in subsection (c) of this Section 2.15.
(c) In the event that, at any one time, (i) any Lender Party shall be a
Defaulting Lender, (ii) such Defaulting Lender shall not owe a Defaulted
Advance or a Defaulted Amount and (iii) the Borrower, the Administrative
Agent or any other Lender Party shall be required to pay or distribute any
amount hereunder or under any other Loan Document to or for the account of
such Defaulting Lender, then the Borrower or such other Lender Party shall
pay such amount to the Administrative Agent to be held by the Administrative
Agent, to the fullest extent permitted by applicable law, in escrow or the
Administrative Agent shall, to the fullest extent permitted by applicable
law, hold in escrow such amount otherwise held by it. Any funds held by the
Administrative Agent in escrow under this subsection (c) shall be deposited
by the Administrative Agent in an account with Bank of America, in the name
and under the control of the Administrative Agent, but subject to the
provisions of this subsection (c). The terms applicable to such account,
including the rate of interest payable with respect to the credit balance of
such account from time to time, shall be Bank of America's standard terms
applicable to escrow accounts maintained with it. Any interest credited to
such account from time to time shall be held by the Administrative Agent in
escrow under, and applied by the Administrative Agent from time to time in
accordance with the provisions of, this subsection (c). The Administrative
Agent shall, to the fullest extent permitted by applicable law, apply all
funds so held in escrow from time to time to the extent necessary to make any
Advances required to be made by such Defaulting Lender and to pay any amount
payable by such Defaulting Lender hereunder and under the other Loan
Documents to the Administrative Agent or any other Lender Party, as and when
such Advances or amounts are required to be made or paid and, if the amount
so held in escrow shall at any time be insufficient to make and pay all such
Advances and amounts required to be made or paid at such time, in the
following order of priority:
42
(i) first, to the Administrative Agent for any amount then due
and payable by such Defaulting Lender to the Administrative Agent
hereunder;
(ii) second, to any other Lender Parties for any amount then
due and payable by such Defaulting Lender to such other Lender
Parties hereunder, ratably in accordance with such respective amounts
then due and payable to such other Lender Parties; and
(iii) third, to the Borrower for any Advance then required to
be made by such Defaulting Lender pursuant to a Commitment of such
Defaulting Lender.
In the event that any Lender Party that is a Defaulting Lender shall, at any
time, cease to be a Defaulting Lender, any funds held by the Administrative
Agent in escrow at such time with respect to such Lender Party shall be
distributed by the Administrative Agent to such Lender Party and applied by
such Lender Party to the Obligations owing to such Lender Party at such time
under this Agreement and the other Loan Documents ratably in accordance with
the respective amounts of such Obligations outstanding at such time.
(d) The rights and remedies against a Defaulting Lender under this
Section 2.15 are in addition to other rights and remedies that the Borrower
may have against such Defaulting Lender with respect to any Defaulted Advance
and that the Administrative Agent or any Lender Party may have against such
Defaulting Lender with respect to any Defaulted Amount.
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. Conditions Precedent to Effective Date. Article II
hereof shall be effective on and as of the date (the "Effective Date") on
which each of the following conditions precedent shall have been satisfied or
duly waived:
(a) The elements of the Transaction to be effected on or before
the Closing Date as set forth on Schedule 3.01(a) hereto shall have
been consummated on terms and conditions reasonably satisfactory to
the Lenders and in compliance with applicable law and regulatory
approvals, and each of the Lenders shall be satisfied in all
reasonable respects with the terms and conditions of all material
agreements and instruments relating to the Transaction and there
shall not have been any material modification, amendment, supplement
or waiver to any material agreement or instrument or instrument
relating to the Transaction that could adversely affect the Lenders
in any material respect including, without limitation, any
modification, amendment, supplement or waiver relating to (A) the
amount or type of consideration to be paid in connection with the
Transaction and all related tax, legal and accounting matters and (B)
the capitalization, structure and equity ownership of the Borrower
and its Subsidiaries after giving effect to the Transaction.
(b) The Lender Parties shall be satisfied with the corporate
or partnership (as applicable) and legal structure and capitalization
of each Loan Party and each of its Subsidiaries, including the terms
and conditions of the charter, bylaws and each class of
43
capital stock of each Loan Party and each such Subsidiary and of each
agreement or instrument relating to such structure or capitalization.
(c) The Lender Parties shall be satisfied that all Existing
Debt (including, without limitation, Debt in respect of the "Term
Facilities" under the Existing Credit Agreement, the Indenture and
the XXXXX), other than the Surviving Debt, has been (or, with the
proceeds of the Captain D's Financing, the COI Financing or the Real
Estate Financing, will be) prepaid, redeemed or defeased in full or
otherwise satisfied and extinguished and that all such Surviving Debt
shall be on terms and conditions satisfactory to the Lender Parties.
(d) Before giving effect to the transactions contemplated by
this Agreement, there shall have occurred no Material Adverse Change
since October 31, 1999.
(e) There shall exist no action, suit, investigation,
litigation or proceeding affecting any Loan Party or any of its
Subsidiaries pending or threatened before any court, governmental
agency or arbitrator that (i) would be reasonably likely to have a
Material Adverse Effect other than the matters described on Schedule
3.01(d) (the "Disclosed Litigation") or (ii) purports to affect the
legality, validity or enforceability of this Agreement, any Note or
any other Loan Document or the consummation of the transactions
contemplated hereby or thereby, and there shall have been no adverse
change in the status, or financial effect on, any Loan Party or any
of its Subsidiaries, of the Disclosed Litigation from that described
on Schedule 3.01(e).
(f) The Lender Parties shall have completed a due diligence
investigation of the Borrower and its Subsidiaries in scope, and with
results, satisfactory to the Lender Parties, and nothing shall have
come to the attention of the Lender Parties during the course of such
due diligence investigation to lead them to believe that (i) the
Information Memorandum was or has become misleading, incorrect or
incomplete in any material respect or (ii) any changes or
developments have occurred, or any new or additional information has
come to their attention regarding the Borrower or any of its
Subsidiaries or any aspect of the Transaction that either
individually or in the aggregate could reasonably be expected to have
a Material Adverse Effect or adversely affect the Lender Parties or
the Transaction; without limiting the generality of the foregoing,
the Lender Parties shall have been given such access to the
management, records, books of account, contracts and properties of
the Borrower and its Subsidiaries as they shall have requested.
(g) The Borrower shall have paid all accrued fees of the
Administrative Agent and the Lender Parties and all accrued and
invoiced expenses of the Administrative Agent and the Lender Parties
(including the accrued and invoiced fees and expenses of counsel to
the Administrative Agent and local counsel to the Administrative
Agent).
(h) The Administrative Agent shall be satisfied with (i) all
arrangements between the Borrower and its Subsidiaries (other than
Captain D's and its Subsidiaries), on the one hand, and Captain D's
and its Subsidiaries, on the other hand, and (ii) all Related
Documents.
44
(i) The SPVs shall have obtained the Real Estate Financing on
terms and conditions satisfactory to the Administrative Agent.
(j) Captain D's shall have obtained the Captain D's Financing
on terms and conditions satisfactory to the Administrative Agent.
(k) COI shall have obtained the Commissory Financing on terms
and conditions satisfactory to the Administrative Agent.
(l) The Administrative Agent shall have received on or before
the day of the Initial Extension of Credit the following, each dated
such day (unless otherwise specified), in form and substance
satisfactory to the Administrative Agent (unless otherwise specified)
and (except for the Notes) in sufficient copies for each Lender
Party:
(i) The Notes payable to the order of the Lenders.
(ii) Certified copies of the resolutions of the Board
of Directors of the Borrower and each other Loan Party
approving the Transaction, this Agreement, the Notes and
each other Transaction Document to which it is or is to be
a party, and of all documents evidencing other necessary
corporate action and governmental and other third party
approvals and consents, if any, with respect to this
Agreement, the Notes and each other Transaction Document.
(iii) A copy of the charter of the Borrower and each
other Loan Party and each amendment thereto, certified (as
of a date reasonably near the date of the Initial Extension
of Credit) by the Secretary of State (or other appropriate
officer) of the jurisdiction of its incorporation as being
a true and correct copy thereof.
(iv) A copy of a certificate of the Secretary of State
(or other appropriate officer) of the jurisdiction of its
incorporation, dated reasonably near the date of the Initial
Extension of Credit, certifying that (A) the Borrower and
each other Loan Party have paid all franchise taxes due
prior to the date of such certificate and (B) the Borrower
and each other Loan Party are duly incorporated and in good
standing under the laws of the jurisdiction of its
incorporation.
(v) A copy of a certificate of the Secretary of State
(or other appropriate officer) of each jurisdiction in which
the Borrower and each other Loan Party transacts business,
dated reasonably near the date of the Initial Extension of
Credit, stating that the Borrower and each other Loan Party
are duly qualified and in good standing as foreign
corporations in such State and have filed all annual reports
required to be filed to the date of such certificate.
(vi) A certificate of the Borrower and each other Loan
Party, signed on behalf of the Borrower and such other Loan
Party by its President or a Vice President and its Secretary
or any Assistant Secretary, dated the date of the Initial
Extension of Credit (the statements made in which
certificate shall be true on and as of the date of the
Initial Extension of Credit), certifying as to (A) the
absence
45
of any amendments to the charter of the Borrower or such
other Loan Party since the date of the Secretary of State's
certificate referred to in Section 3.01(g)(iii), (B) a true
and correct copy of the bylaws of the Borrower and such
other Loan Party as in effect on the date of the Initial
Extension of Credit, (C) the due incorporation or formation
and good standing of the Borrower and such other Loan Party
as a corporation organized under the laws of the
jurisdiction of its incorporation or formation, and the
absence of any proceeding for the dissolution or liquidation
of the Borrower or such other Loan Party, (D) the truth of
the representations and warranties contained in the Loan
Documents as though made on and as of the date of the
Initial Extension of Credit and (E) the absence of any event
occurring and continuing, or resulting from the Initial
Extension of Credit, that constitutes a Default.
(vii) A certificate of the Secretary or an Assistant
Secretary of the Borrower and each other Loan Party
certifying the names and true signatures of the officers of
the Borrower and such other Loan Party authorized to sign
this Agreement, the Notes and each other Loan Document to
which they are or are to be parties and the other documents
to be delivered hereunder and thereunder.
(viii) A security agreement in substantially the form
of Exhibit D hereto (together with each other security
agreement delivered pursuant to Section 5.01(l), in each
case as amended, supplemented or otherwise modified from
time to time in accordance with its terms, the "Security
Agreement"), duly executed by the Borrower and each other
Collateral Grantor together with:
(A) certificates representing the Pledged
Shares referred to therein accompanied by undated
stock powers executed in blank and instruments
evidencing the Pledged Debt referred to therein
indorsed in blank,
(B) executed copies of proper financing
statements, to be filed under the Uniform
Commercial Code of all jurisdictions that the
Administrative Agent may deem necessary or
desirable in order to perfect and protect the first
priority liens and security interests created under
the Security Agreement, covering the Collateral
described in the Security Agreement,
(C) completed requests for information, dated
on or before the date of the Initial Extension of
Credit, listing all effective financing statements
filed as of the date of such requests in the
jurisdictions referred to in clause (B) above that
name the Borrower or any other Collateral Grantor
as debtor, together with copies of such other
financing statements,
(D) evidence of the insurance required by the
terms of this Agreement,
46
(E) copies of the Assigned Agreements referred
to in the Security Agreement, and
(F) evidence that all other action that the
Administrative Agent may deem necessary or
desirable in order to perfect and protect the first
priority liens and security interests created under
the Security Agreement has been taken or that the
necessary steps for such action have been taken.
(ix) An intellectual property security agreement in
substantially the form of Exhibit E hereto (together with
each other intellectual property security agreement
delivered pursuant to Section 5.01(l), in each case as
amended, supplemented or otherwise modified from time to
time in accordance with its terms, the "Intellectual
Property Security Agreement"), duly executed by the Borrower
and each other Collateral Grantor together with evidence
that all action that the Administrative Agent may deem
necessary or desirable in order to perfect and protect the
first priority liens and security interests created under
the Intellectual Property Security Agreement has been taken
or that the necessary steps for such action have been taken.
(x) A subsidiary guaranty in substantially the form of
Exhibit F-1 hereto (as amended, supplemented or otherwise
modified from time to time in accordance with its terms, the
"Subsidiary Guaranty"), duly executed by each Subsidiary
Guarantor.
(xi) A Certificate substantially in the form of
Exhibit I hereto, attesting to the Solvency of the Borrower
after giving effect to the transactions contemplated hereby,
from its president, treasurer, controller, chief financial
officer or principal financial officer.
(xii) A letter, in form and substance satisfactory to
the Administrative Agent, from the Borrower to Ernst &
Young, its independent certified public accountants,
advising such accountants that the Administrative Agent and
the Lender Parties have been authorized to exercise (in the
presence of a representative of the Borrower) all rights of
the Borrower to require such accountants to disclose any and
all financial statements and any other information of any
kind that they may have with respect to the Borrower and its
Subsidiaries and directing such accountants to comply with
any reasonable request of the Administrative Agent for such
information.
(xiii) Evidence of insurance naming the Administrative
Agent as an additional insured party with such responsible
and reputable insurance companies or associations, and in
such amounts and covering such risks, as is satisfactory to
the Lender Parties, including, without limitation, business
interruption insurance.
(xiv) A favorable opinion of (A) Xxxxxxxx & Shohl,
counsel for the Borrower, in substantially the form of
Exhibit H-1 hereto and as to such other matters as any
Lender Party through the Administrative Agent may reasonably
47
request, and (B) Xxxxx Xxxxxxxxxx, special New York counsel
for the Borrower, in substantially the form of Exhibit H-2
hereto and as to such other matters as any Lender Party
through the Administrative Agent may reasonably request.
(xv) Certified copies of each of the Related Documents
(other than the Office Lease and the Administrative Services
Agreements), duly executed by the parties thereto and in
form and substance satisfactory to the Lender Parties,
together with all agreements, instruments and other
documents delivered in connection therewith as the
Administrative Agent shall request.
SECTION 3.02. Conditions Precedent to Each Borrowing and Issuance. The
obligation of each Appropriate Lender to make an Advance (other than a Letter
of Credit Advance made by the Issuing Bank or a Working Capital Lender
pursuant to Section 2.03(c) and a Working Capital Advance made by a Working
Capital Lender pursuant to Section 2.02(b)) on the occasion of each Borrowing
(including the Initial Extension of Credit), and the obligation of the
Issuing Bank to issue a Letter of Credit (including the initial issuance) or
renew a Letter of Credit and the right of the Borrower to request the
issuance or a renewal of a Letter of Credit, shall be subject to the further
conditions precedent that on the date of such Borrowing or issuance or
renewal (a) the following statements shall be true (and each of the giving of
the applicable Notice of Borrowing, Notice of Issuance or Notice of Renewal
and the acceptance by the Borrower of the proceeds of such Borrowing or of
such Letter of Credit or the renewal of such Letter of Credit shall
constitute a representation and warranty by the Borrower that both on the
date of such notice and on the date of such Borrowing or issuance or renewal
such statements are true):
(i) the representations and warranties contained in each Loan
Document are correct in all material respects on and as of such date,
before and after giving effect to such Borrowing or issuance or
renewal and to the application of the proceeds therefrom, as though
made on and as of such date, other than any such representations or
warranties that, by their terms, refer to a specific date other than
the date of such Borrowing or issuance or renewal, in which case as
of such specific date; and
(ii) no event has occurred and is continuing, or would result
from such Borrowing or issuance or renewal or from the application
of the proceeds therefrom, that constitutes a Default;
and (b) the Administrative Agent shall have received such other approvals,
opinions or documents as any Appropriate Lender through the Administrative
Agent may reasonably request.
SECTION 3.03. Determinations Under Section 3.01. For purposes of
determining compliance with the conditions specified in Section 3.01, each
Lender Party 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 the Lender
Parties unless an officer of the Administrative Agent responsible for the
transactions contemplated by the Loan Documents shall have received notice
from such Lender Party prior to the Initial Extension of Credit specifying
its objection thereto and if the Initial
48
Extension of Credit consists of a Borrowing, such Lender Party shall not have
made available to the Administrative Agent such Lender Party's ratable
portion of such Borrowing.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower. The
Borrower represents and warrants as follows:
(a) Each Loan Party (i) is a corporation or limited liability
company, as applicable, duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or
formation, as applicable, (ii) is duly qualified and in good standing
as a foreign corporation or limited liability company, as applicable,
in each other jurisdiction in which it owns or leases property or in
which the conduct of its business requires it to so qualify or be
licensed except where the failure to so qualify or be licensed is not
reasonably likely to have a Material Adverse Effect and (iii) has all
requisite corporate power and authority (including, without
limitation, all governmental licenses, permits and other approvals)
to own or lease and operate its properties and to carry on its
business as now conducted and as proposed to be conducted.
(b) Set forth on Schedule 4.01(b) hereto is a complete and
accurate list of all Subsidiaries of each Loan Party, showing as of
the date hereof (as to each such Subsidiary) the jurisdiction of its
incorporation or formation, as applicable, the number of shares of
each class of capital stock authorized, and the number outstanding,
on the date hereof and the percentage of the outstanding shares of
each such class owned (directly or indirectly) by such Loan Party and
the number of shares covered by all outstanding options, warrants,
rights of conversion or purchase and similar rights at the date
hereof. All of the outstanding capital stock of all of such
Subsidiaries has been validly issued, is fully paid and non-
assessable and is owned by such Loan Party or one or more of its
Subsidiaries free and clear of all Liens, except those permitted by
or created under the Loan Documents.
(c) The execution, delivery and performance by each Loan Party
of this Agreement, the Notes, each other Loan Document and each Deed
to which it is or is to be a party, and the consummation of the
transactions contemplated hereby, are within such Loan Party's
corporate powers, have been duly authorized by all necessary
corporate action, and do not (i) contravene such Loan Party's
charter, bylaws, certificate of formation or operating agreement, as
applicable, (ii) violate any law (including, without limitation, the
Securities Exchange Act of 1934 and the Racketeer Influenced and
Corrupt Organizations Chapter of the Organized Crime Control Act of
1970), rule, regulation (including, without limitation, Regulation
X of the Board of Governors of the Federal Reserve System), order,
writ, judgment, injunction, decree, determination or award imposed
upon or applicable to such Loan Party, (iii) conflict with or result
in the breach of, or constitute a default under, any contract, loan
agreement, indenture, mortgage, deed of trust, lease or other
instrument binding on or affecting any Loan Party, any of its
Subsidiaries or any of their properties or (iv) except for the Liens
created under
49
the Loan Documents, result in or require the creation or imposition
of any Lien upon or with respect to any of the properties of any Loan
Party or any of its Subsidiaries. No Loan Party or any of its
Subsidiaries is in violation of any such law, rule, regulation,
order, writ, judgment, injunction, decree, determination or award or
in breach of any such contract, loan agreement, indenture, mortgage,
deed of trust, lease or other instrument, the violation or breach of
which is reasonably likely, either individually or in the aggregate,
to have a Material Adverse Effect.
(d) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory
body or any other third party is required for (i) the due execution,
delivery, recordation, filing or performance by any Loan Party of
this Agreement, the Notes, any other Loan Document or any Deed to
which it is or is to be a party, or for the consummation of the
transactions contemplated hereby, (ii) the grant by any Loan Party
of the Liens granted by it pursuant to the Collateral Documents,
(iii) the perfection or maintenance of the Liens created by the
Collateral Documents (including the first priority nature thereof)
or (iv) the exercise by the Administrative Agent or any Lender Party
of its rights under the Loan Documents or the remedies in respect of
the Collateral pursuant to the Collateral Documents, except for (A)
authorizations, approvals, actions, notices and filings which have
been duly obtained, taken, given or made and are in full force and
effect and (B) the filing and recording of certain of the Collateral
Documents as described herein.
(e) This Agreement has been, and each of the Notes, each other
Loan Document and each Deed when delivered hereunder will have been,
duly executed and delivered by each Loan Party party thereto. This
Agreement is, and each of the Notes, each other Loan Document and
each Deed when delivered hereunder will be, the legal, valid and
binding obligation of each Loan Party party thereto, enforceable
against such Loan Party in accordance with its terms subject, as to
enforcement only, to bankruptcy, insolvency, reorganization,
moratoriums or similar laws at the time in effect affecting the
enforceability of the rights of creditors generally.
(f) The Consolidated balance sheet of the Borrower and its
Subsidiaries as at October 31, 1999, and the related Consolidated
statement of income and Consolidated statement of cash flows of the
Borrower and its Subsidiaries for the fiscal year then ended,
accompanied by an opinion of Ernst & Young, independent public
accountants, and the Consolidated balance sheet of the Borrower and
its Subsidiaries as of May 14, 2000, and the related Consolidated
statement of income and Consolidated statement of cash flows of the
Borrower and its Subsidiaries for the 28 weeks then ended, duly
certified by the chief financial officer or the principal financial
officer of the Borrower, copies of which have been furnished to the
Administrative Agent, fairly present, subject, in the case of said
balance sheet as of May 14, 2000, and said statements of income and
cash flows for the 28 weeks then ended, to year-end audit
adjustments, the Consolidated financial condition of the Borrower and
its Subsidiaries as at such dates and the Consolidated results of
operations of the Borrower and its Subsidiaries for the periods ended
on such dates, all in accordance with generally accepted accounting
principles
50
applied on a consistent basis, and since October 31, 1999, there has
been no Material Adverse Change.
(g) The Consolidated forecasted balance sheets, income
statements and cash flows statements of the Borrower and its
Subsidiaries delivered to the Lender Parties pursuant to Section
3.01(g)(xiii) or 5.03(e) were prepared in good faith on the basis of
the assumptions stated therein, which assumptions were reasonable in
the light of conditions existing at the time of delivery of such
forecasts, and represented, at the time of delivery, the Borrower's
reasonable best estimate of its expected future financial performance
based upon the assumptions set forth in such forecast.
(h) Except as modified or supplemented in this Agreement or
the other Loan Documents, no information, exhibit or report
furnished by any Loan Party to the Administrative Agent or any Lender
Party in connection with the negotiation of the Loan Documents or
pursuant to the terms of the Loan Documents contained any untrue
statement of a material fact or omitted to state a material fact
necessary to make the statements made therein not misleading.
(i) There is no action, suit, investigation, litigation or
proceeding affecting any Loan Party or any of its Subsidiaries,
including any Environmental Action, pending or threatened before any
court, governmental agency or arbitrator that (i) would be reasonably
likely to have a Material Adverse Effect (other than the Disclosed
Litigation) or (ii) purports to affect the legality, validity or
enforceability of this Agreement, any Note, any other Loan Document
or any Deed or the consummation of the transactions contemplated
hereby, and there has been no adverse change in the status, or
financial effect on any Loan Party or any of its Subsidiaries, of the
Disclosed Litigation from that described on Schedule 3.01(d).
(j) No proceeds of any Advance or drawings under any Letter
of Credit will be used to acquire any equity security of a class that
is registered pursuant to Section 12 of the Securities Exchange Act
of 1934.
(k) The Borrower is not engaged in the business of extending
credit for the purpose of purchasing or carrying Margin Stock, and
no proceeds of any Advance or drawings under any Letter of Credit
will be used to purchase or carry any Margin Stock or to extend
credit to others for the purpose of purchasing or carrying any Margin
Stock.
(l) Following application of the proceeds of each Advance or
drawing under each Letter of Credit, not more than 25 percent of the
value of the assets (either of the Borrower only or of the Borrower
and its Subsidiaries on a Consolidated basis) subject to the
provisions of Section 5.02(a) or 5.02(e) or subject to any
restriction contained in any agreement or instrument between the
Borrower and any Lender Party or any Affiliate of any Lender Party
relating to Debt and within the scope of Section 6.01(e) will be
Margin Stock.
(m) Set forth on Schedule 4.01(m) hereto is a complete and
accurate list of all Plans, Multiemployer Plans and Welfare Plans.
51
(n) No ERISA Event has occurred or is reasonably expected to
occur with respect to any Plan that has resulted in or is reasonably
expected to result in a material liability of any Loan Party or any
ERISA Affiliate.
(o) As of the last annual actuarial valuation date, the funded
current liability percentage, as defined in Section 302(d)(8) of
ERISA, of each Plan exceeds 90% and there has been no material
adverse change in the funding status of any such Plan since such
date.
(p) Schedule B (Actuarial Information), if applicable, to the
most recent annual report (Form 5500 Series) for each Plan, copies
of which have been filed with the Internal Revenue Service, is
complete and accurate and fairly presents the funding status of such
Plan, and since the date of such Schedule B there has been no
material adverse change in such funding status.
(q) Neither any Loan Party nor any ERISA Affiliate has
incurred or is reasonably expected to incur any Withdrawal Liability
to any Multiemployer Plan.
(r) Neither any Loan Party nor any ERISA Affiliate has been
notified by the sponsor of a Multiemployer Plan that such
Multiemployer Plan is in reorganization or has been terminated,
within the meaning of Title IV of ERISA, and no such Multiemployer
Plan is reasonably expected to be in reorganization or to be
terminated, within the meaning of Title IV of ERISA.
(s) Except as set forth in the financial statements referred
to in this Section 4.01 and in Section 5.03, the Loan Parties and
their respective Subsidiaries have no material liability with respect
to "expected post retirement benefit obligations" within the meaning
of Statement of Financial Accounting Standards No. 106.
(t) Neither the business nor the properties of any Loan Party
or any of its Subsidiaries are affected by any fire, explosion,
accident, strike, lockout or other labor dispute, drought, storm,
hail, earthquake, embargo, act of God or of the public enemy or other
casualty (whether or not covered by insurance) that would be
reasonably likely to have a Material Adverse Effect.
(u) The operations and properties of each Loan Party and each
of its Subsidiaries comply in all material respects with all
applicable Environmental Laws and Environmental Permits, all past
non-compliance with such Environmental Laws and Environmental Permits
has been resolved without material ongoing obligations or costs, and
no circumstances exist that would be reasonably likely to (i) form
the basis of an Environmental Action against any Loan Party or any
of its Subsidiaries or any of their properties that could have a
Material Adverse Effect or (ii) cause any such property to be subject
to any material restrictions on ownership, occupancy, use or
transferability under any Environmental Law.
(v) None of the properties currently or, to the knowledge of
the Loan Parties and their Subsidiaries, formerly, owned or operated
by any Loan Party or any of its
52
Subsidiaries is listed or proposed for listing on the NPL or on the
CERCLIS or any analogous foreign, state or local list or, to the
knowledge of the Loan Parties and their Subsidiaries, is adjacent to
any such property, except for the properties that are listed on
Schedule 4.01(v); there are no and, to the knowledge of the Loan
Parties and their Subsidiaries, never have been, any underground or
aboveground storage tanks or any surface impoundments, septic tanks,
pits, sumps or lagoons in which Hazardous Materials are being or have
been treated, stored or disposed on any property currently or, to the
knowledge of the Loan Parties and their Subsidiaries, formerly, owned
or operated by any Loan Party or any of its Subsidiaries, in each
case, the presence of which would be reasonably expected to have a
Material Adverse Effect; there is no asbestos or asbestos-containing
material on any property currently owned or operated by any Loan
Party or any of its Subsidiaries in a form or condition which
violates, or gives rise to liability under, Environmental Laws; and
Hazardous Materials have not been released, discharged or disposed
of on any property currently or, to the knowledge of the Loan Parties
and their Subsidiaries, formerly, owned or operated by any Loan Party
or any of its Subsidiaries, in each case, the release, discharge or
disposal of which would be reasonably expected to have a Material
Adverse Effect.
(w) Except for monitoring xxxxx, neither any Loan Party nor
any of its Subsidiaries is undertaking, and has not completed, either
individually or together with other potentially responsible parties,
any investigation or assessment or remedial or response action
relating to any actual or threatened release, discharge or disposal
of Hazardous Materials at any site, location or operation, either
voluntarily or pursuant to the order of any governmental or
regulatory authority or the requirements of any Environmental Law;
and all Hazardous Materials generated, used, treated, handled or
stored at, or transported to or from, any property currently or, to
the knowledge of the Loan Parties and their Subsidiaries, formerly,
owned or operated by any Loan Party or any of its Subsidiaries have
been disposed of in a manner not reasonably expected to have a
Material Adverse Effect.
(x) Neither any Loan Party nor any of its Subsidiaries is a
party to any indenture, loan or credit agreement or any lease or
other agreement or instrument or subject to any charter or corporate
restriction that would be reasonably likely to have a Material
Adverse Effect.
(y) The provisions of the Collateral Documents executed by the
Loan Parties are effective to create, in favor of the Lenders, legal,
valid and enforceable security interests in all right, title and
interest of the Loan Parties in any and all of the collateral
described therein, securing the Notes and all other Obligations from
time to time outstanding under the Loan Documents, and each of such
Collateral Documents, upon the due filing of UCC-1 Financing
Statements and Mortgages, the taking of possession of the Security
Collateral as provided in the Security Agreement and the due filing
of the Intellectual Property Security Agreement with the United
States Patent and Trademark Office and the United States Copyright
Office, shall create a fully perfected security interest in all
right, title and interest of the Loan Parties in such collateral,
superior in right to any liens, existing or future, which the Loan
Parties or any creditors of or
53
purchasers from, or any other Person, may have against such
collateral or interests therein, except to the extent, if any,
otherwise provided herein. Upon the due filing of UCC-1 financing
statements and the due filing of the Intellectual Property Security
Agreement with the United States Patent and Trademark Office and the
United States Copyright Office, all filings and other actions
necessary or desirable to perfect and protect such security interests
will have been duly taken. The Loan Parties are the legal and
beneficial owners of the Collateral free and clear of any Lien,
except for the liens and security interests created or permitted
under the Loan Documents.
(z) Each Loan Party and each of its Subsidiaries and
Affiliates (other than Shoney's of Canada, Inc.) has filed, has
caused to be filed or has been included in all tax returns (Federal,
state, local and foreign) required to be filed and has paid all taxes
shown thereon to be due, together with applicable interest and
penalties except any such taxes or charges which are being contested
in good faith by appropriate proceedings and for which adequate
reserves are being maintained and certain de minimis amounts due by
Shoney's of Canada, Inc.
(aa) Set forth on Schedule 4.01(aa) hereto is a complete and
accurate list, as of the date hereof, of each taxable year of each
Loan Party and each of its Subsidiaries and Affiliates for which
Federal income tax returns have been filed and for which the
expiration of the applicable statute of limitations for assessment
or collection has not occurred by reason of extension or otherwise
(an "Open Year").
(bb) There are no adjustments to the Federal income tax
liability of each Loan Party and each of its Subsidiaries and
Affiliates proposed by the Internal Revenue Service with respect to
Open Years. No issues have been raised by the Internal Revenue
Service in respect of Open Years that, in the aggregate, would be
reasonably likely to have a Material Adverse Effect.
(cc) The aggregate unpaid amount, as of the date hereof, of
adjustments to the state, local and foreign tax liability of each
Loan Party and its Subsidiaries and Affiliates proposed by all state,
local and foreign taxing authorities (other than amounts arising from
adjustments to Federal income tax returns) does not exceed $250,000.
No issues have been raised by such taxing authorities that, in the
aggregate, would be reasonably likely to have a Material Adverse
Effect.
(dd) No "ownership change" as defined in Section 382(g) of the
Internal Revenue Code, and no event that would result in the
application of the "separate return limitation year" or "consolidated
return change of ownership" limitations under the Federal income tax
consolidated return regulations, has occurred with respect to the
Borrower since October 31, 1999.
(ee) Neither any Loan Party nor any of its Subsidiaries is an
"investment company," or an "affiliated person" of, or "promoter" or
"principal underwriter" for, an "investment company," as such terms
are defined in the Investment Company Act of 1940, as amended.
54
(ff) The Borrower is, individually and together with its
Subsidiaries, Solvent (it being understood that this representation
with respect to clauses (b), (c) and (d) of the definition of
"Solvent" is based in part on its ability to supplement its operating
cash flows with the sales of assets as projected in the Projected
Financial Statements (as defined in the certificate delivered
pursuant to Section 3.01(l)(xi)), other sales of assets (including
real property and Investments in Captain D's and COI), proceeds from
the refinancing of Debt and proceeds from permitted distributions
from Captain D's).
(gg) Set forth on Schedule 4.01(gg) hereto is a complete and
accurate list of all Debt of the Borrower and its Subsidiaries (other
than Debt of a Loan Party to another Loan Party) existing as of the
date hereof (the "Existing Debt"), showing as of the date hereof the
principal amount outstanding thereunder.
(hh) Set forth on Schedule 4.01(hh) hereto is a complete and
accurate list of all Debt of the Borrower and its Subsidiaries (other
than Debt of a Loan Party to another Loan Party) which will remain
outstanding after application of the proceeds from the Initial
Advances (the "Surviving Debt"), showing as of the date hereof the
principal amount outstanding thereunder, the maturity date thereof
and the amortization schedule therefor.
(ii) Set forth on Schedule 4.01(ii) hereto is a complete and
accurate list of all real property owned by any Loan Party or any of
its Subsidiaries, showing as of the date hereof the street address,
state, record owner and, if appraised by Xxxxxxxx & Xxxxxxx, the
appraised value thereof. Each Loan Party or such Subsidiary has
good, marketable and insurable fee simple title to the real property
identified as being owned by it on Schedule 4.01(ii), free and clear
of all Liens, other than Liens created or permitted by the Loan
Documents.
(jj) Set forth on Schedule 4.01(jj) hereto is a complete and
accurate list of all leases of real property (other than office
leases and storage facility leases) to which any Loan Party or any
of its Subsidiaries is the lessee, showing as of the date hereof the
address, lessee and annual rental cost thereof.
(kk) Set forth on Schedule 4.01(kk) hereto is a complete and
accurate list of all Investments held by any Loan Party or any of its
Subsidiaries, showing as of the date hereof the amount, obligor or
issuer and maturity, if any, thereof.
(ll) Schedules II and III, collectively, to the Intellectual
Property Security Agreement contain a complete and accurate list of
all patents, trademarks, trade names, service marks and copyrights,
and all applications therefor and licenses thereof (other than to
franchisees), of each Loan Party or any of its Subsidiaries, showing
as of the date hereof (i) in the case of registrations therefor, the
jurisdiction in which registered, the registration number, the date
of registration and the expiration date and (ii) in the case of
pending applications therefor, the jurisdiction in which filed, the
application number and the date of filing.
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants. So long as any Advance shall
remain unpaid, any Letter of Credit shall be outstanding or any Lender Party
shall have any Commitment hereunder, the Borrower will:
(a) Compliance with Laws, Etc. Comply, and cause each of its
Subsidiaries to comply, in all material respects, with all applicable
laws, rules, regulations and orders, such compliance to include,
without limitation, compliance with ERISA and the Racketeer
Influenced and Corrupt Organizations Chapter of the Organized Crime
Control Act of 1970.
(b) Payment of Taxes, Etc. Pay and discharge, and cause each
of its Subsidiaries to pay and discharge, before the same shall
become delinquent, (i) all taxes, assessments and governmental
charges or levies imposed upon it or upon its property and (ii) all
lawful claims that, if unpaid, might by law become a Lien upon its
property; provided, however, that neither the Borrower nor any of its
Subsidiaries shall be required to pay or discharge any such tax,
assessment, charge or claim that is being contested in good faith and
by proper proceedings and as to which appropriate reserves are being
maintained, unless and until any Lien resulting therefrom attaches
to its property and becomes enforceable against its other creditors.
(c) Compliance with Environmental Laws. Comply, and cause
each of its Subsidiaries and all lessees and other Persons operating
or occupying its properties to comply with all applicable
Environmental Laws and Environmental Permits except in the cases
where the failure to so comply is not reasonably likely to have a
Material Adverse Effect; obtain and renew and cause each of its
Subsidiaries to obtain and renew all Environmental Permits necessary
for its operations and properties; and conduct, and cause each of its
Subsidiaries to conduct, any investigation, study, sampling and
testing, and undertake any cleanup, removal, remedial or other action
necessary to remove and clean up all Hazardous Materials from any of
its properties, in accordance with the requirements of all
Environmental Laws; provided, however, that neither the Borrower nor
any of its Subsidiaries shall be required to undertake any such
cleanup, removal, remedial or other action to the extent that its
obligation to do so is being contested in good faith and by proper
proceedings and appropriate reserves are being maintained with
respect to such circumstances.
(d) Maintenance of Insurance. Maintain, and cause each of
its Subsidiaries to maintain (A) casualty insurance insuring all
buildings, structures and improvements owned or leased by the
Borrower or any Subsidiary (including, without limitation, all
Improvements (as defined under each Mortgage) now or hereafter
constituting a part of the Mortgaged Property (as defined under each
Mortgage)) against damage by fire and the other hazards covered by
a standard all-risk, extended coverage insurance policy for the full
insurable value thereof (which, unless the Administrative Agent shall
otherwise agree in writing, shall mean the full repair and
replacement value
56
thereof without reduction for depreciation or co-insurance), (B)
business interruption or rental insurance in an amount adequate to
cover continuing expenses during any period of repairs or restoration
which amount shall at least be equal to twelve months' anticipated
gross income from each of such premises, and (C) Commercial General
Liability Insurance in respect of the operation of all such
properties as may from time to time be specified by the
Administrative Agent, but in no event less than $1,000,000 combined
single limit and $25,000,000 umbrella or excess coverage. In
addition, the Administrative Agent may require the Borrower and each
of its Subsidiaries to carry such other insurance on such properties
in such amounts as may from time to time reasonably be required by
institutional lenders, against insurable casualties including,
without limitation, the following types of insurance: flood
(including surface waters) if any such property is located in an area
identified by the Secretary of Housing and Urban Development or any
other official having jurisdiction as having special flood hazards
and in which flood insurance has been made available under the
National Flood Insurance Act of 1968 and the Flood Disaster
Protection Act of 1973 (as the foregoing may be modified or amended
and any successor acts thereto), in an amount at least equal to the
full repair and replacement value of such property or the maximum
limit of coverage available under said Act in respect thereof,
whichever is less; automobile; Builder's Risk; sinkhole; earthquake;
boiler and machinery; all in amounts adequate to cover repair and
replacement expenses; and contingent liability in connection with any
loss arising from the fact that any improvement is deemed to be non-
conforming property, which at the time are commonly insured against
in the case of mortgaged property similarly situated, due regard
being given to the site and the type of the building, and the
construction, location, utilities and occupancy or any replacements
or substitutions therefor.
(ii) All liability insurance policies required pursuant to
clause (i) of this Section 5.01(d) in respect of any Mortgaged
Property (as defined in the Mortgages) shall name the Administrative
Agent as an additional insured thereunder, and all other insurance
policies in respect of any property encumbered by a Mortgage, to the
extent reasonably possible, or otherwise maintained by the Borrower
and/or any of its Subsidiaries shall name the Administrative Agent
as the mortgagee under New York long form non-contributory
endorsements. All insurance policies and endorsements required to
be maintained under this Section 5.01(d) shall be fully paid or paid
pursuant to an installment program offered to the Borrower and/or any
of its Subsidiaries by the insurer or its broker/agent, provided that
the installments are paid on or before the due date thereof so that
all required insurance coverage is maintained without interruption.
All such insurance policies required to be maintained by the Borrower
and/or any of its Subsidiaries shall contain such provisions and
expiration dates, and be in such form and issued by such insurance
companies qualified and licensed to do business in the jurisdiction
in which its insurable property is located, as may be reasonably
acceptable to the Administrative Agent. All insurance companies
issuing insurance required pursuant to clause (i) of this Section
5.01(d) for property on behalf of the Borrower and/or any of its
Subsidiaries shall have a Best Insurance Guide Rating of A-/XIII or
better. Any coverage required to be maintained pursuant to clause
(i) of this Section may be maintained under a blanket insurance
policy provided such policy otherwise satisfies the requirements of
this Section. Each such policy required to be maintained by the
57
Borrower and/or any of its Subsidiaries shall provide that such
policy may not be cancelled or materially changed except upon not
less than thirty (30) days' prior written notice to the
Administrative Agent of the intention of non-renewal, cancellation
or material change and that no act or thing done by the Borrower
and/or any of its Subsidiaries shall invalidate the policy as against
the Administrative Agent. In the event the Borrower and/or any of
its Subsidiaries fails to maintain insurance in compliance with
clause (i) of this Section 5.01(d) or, in the event that a notice of
non-renewal, cancellation or material change is given to the
Administrative Agent, as aforesaid, and within ten (10) days after
the delivery of such notice the Borrower and/or its applicable
Subsidiary shall fail to deliver to the Administrative Agent evidence
of the purchase of a substitute policy of insurance or a renewal of
the existing policy of insurance, the Administrative Agent may, after
ten (10) days' notice to the Borrower and/or its applicable
Subsidiary (or, if the policy in question shall sooner expire or be
terminated, on or after the day before the date of such expiration
or termination) but shall not be obligated to, obtain such insurance
and pay the premium therefor and the Borrower and/or its applicable
Subsidiary shall, on demand, reimburse the Administrative Agent for
all sums, advances and reasonable expenses incurred in connection
therewith, together with interest thereon at the rate of interest
applicable under Section 2.07(b) upon the occurrence of an Event of
Default (the "Default Rate") from the date such amounts are advanced
until the same are paid to the Administrative Agent.
(iii) Neither the Borrower nor any of its Subsidiaries shall
carry separate or additional insurance concurrent in form or
contributing, in the event of loss, with that required by clause (i)
of this Section 5.01(d) hereunder unless endorsed in favor of the
Administrative Agent as additional insured or mortgagee, as
applicable, and otherwise acceptable to the Administrative Agent in
all respects.
(iv) In the event of foreclosure of any Mortgage or other
transfer of title or assignment of the premises encumbered thereby
in extinguishment, in whole or in part, of the Obligations secured
thereby, all right, title and interest of the Borrower and any of its
Subsidiaries in and to all policies of insurance required under
clause (i) of this Section 5.01(d) or otherwise then in force with
respect to such premises and all proceeds payable thereunder and
unearned premiums thereon shall immediately vest in the purchaser or
other transferee of such premises.
(v) The Borrower covenants that it has delivered to the
Administrative Agent, and shall, from time to time as may be
requested by the Administrative Agent, deliver to the Administrative
Agent, the policies of insurance (or, if such policies are not yet
available, unconditional binders to issue the same), or certificates
thereof, that may be requested by the Administrative Agent to confirm
that the insurance required under the terms of the Loan Documents is
in place and in full force and effect.
(vi) The Borrower shall, at its own expense, maintain and cause
each of its Subsidiaries, at their own expense, to maintain,
insurance with respect to the Equipment (as defined in the Security
Agreement) pledged by the Borrower and each such Subsidiary under the
Security Agreement in such amounts, against such risks, in such
58
form and with such insurers, as shall be satisfactory to the
Administrative Agent from time to time. Each policy for liability
insurance shall provide for all losses to be paid on behalf of the
Administrative Agent and the Borrower or the Subsidiary of the
Borrower pledging such Equipment, as applicable, as their interests
may appear, and each policy for property damage insurance shall
provide for all losses (except for losses of less than $200,000 per
occurrence) to be paid directly to the Administrative Agent. Each
such policy shall in addition (i) name the Borrower or its Subsidiary
that owns the Equipment covered thereunder and the Administrative
Agent as insured parties thereunder (without any representation or
warranty by or obligation upon the Administrative Agent) as their
interests may appear, (ii) contain the agreement by the insurer that
any loss thereunder shall be payable to the Administrative Agent
notwithstanding any action, inaction or breach of representation or
warranty by the Borrower or such Subsidiary of the Borrower, as
applicable, (iii) provide that there shall be no recourse against the
Administrative Agent for payment of premiums or other amounts with
respect thereto and (iv) provide that at least 10 days' prior written
notice of cancellation or of lapse shall be given to the
Administrative Agent by the insurer. The Borrower shall and shall
cause each of its Subsidiaries, if so requested by the Administrative
Agent, to deliver to the Administrative Agent original or duplicate
policies of such insurance and, as often as the Administrative Agent
may reasonably request, a report of a reputable insurance broker with
respect to such insurance. Further, at the request of the
Administrative Agent, the Borrower shall, and shall cause each of its
Subsidiaries to duly exercise and deliver instruments of assignment
of such insurance policies to comply with the requirements of Section
9 of the Security Agreement and cause the insurers to acknowledge
notice of such assignment.
(vii) Reimbursement under any liability insurance maintained by
the Borrower or any of its Subsidiaries pursuant to clause (vi) of
this Section 5.01(d) may be paid directly to the Person who shall
have incurred liability covered by such insurance. In case of any
loss involving damage to Equipment when clause (viii) of this Section
5.01(d) is not applicable, the Borrower shall, and shall cause each
of its Subsidiaries to make or cause to be made the necessary repairs
to or replacements of the Equipment that it owns, and any proceeds
of insurance maintained by the Borrower or such Subsidiary of the
Borrower, as applicable, pursuant to clause (vi) of this Section
5.01(d) shall be paid to the Borrower or such Subsidiary of the
Borrower, as applicable, as reimbursement for the costs of such
repairs or replacements.
(viii) Upon the occurrence and during the continuance of any
Event of Default or the actual or constructive total loss (in excess
of $200,000 per occurrence) of any Equipment pledged by the Borrower
or such Subsidiary of the Borrower, as applicable, under the Security
Agreement, all insurance payments in respect of such Equipment shall
be paid to and applied by the Administrative Agent as specified in
Section 20(b) of the Security Agreement.
(e) Preservation of Corporate Existence, Etc. Preserve and
maintain, and cause each of its Subsidiaries to preserve and
maintain, its existence, legal structure, legal name, rights (charter
and statutory), permits, licenses, approvals, privileges and
franchises; provided, however, that the Borrower and its Subsidiaries
may consummate
59
any merger or consolidation permitted under Section 5.02(d); provided
further, that neither the Borrower nor any of its Subsidiaries shall
be required to preserve any right, permit, license, approval,
privilege or franchise if the board of directors of the Borrower or
such Subsidiary or equivalent governing body shall determine that the
preservation thereof is no longer desirable in the conduct of the
business of the Borrower or such Subsidiary, as the case may be, and
that the loss thereof does not have a Material Adverse Effect.
(f) Visitation Rights. At any reasonable time and from time
to time, permit the Administrative Agent or any of the Lender Parties
or any agents or representatives thereof, to examine and make copies
of and abstracts from the records and books of account of, and visit
the properties of, the Borrower and any of its Subsidiaries, and to
discuss the affairs, finances and accounts of the Borrower and any
of its Subsidiaries with any of their officers and in the presence
of the Borrower or its Subsidiaries, with their independent certified
public accountants; provided, however, that any such visitation by
any Lender Party or any agent or representative thereof shall be done
in coordination with the Administrative Agent.
(g) Preparation of Environmental Reports. Upon the occurrence
and during the continuance of an Event of Default or upon the
occurrence of an event which gives the Lender Parties a reasonable
basis for concern as to environmental matters, then at the request
of the Administrative Agent from time to time, provide to the Lender
Parties within 60 days after such request, at the expense of the
Borrower, an environmental site assessment report for any of its or
its Subsidiaries properties described in such request, prepared by
an environmental consulting firm acceptable to the Administrative
Agent, indicating the presence or absence of Hazardous Materials and
the estimated cost of any compliance, removal or remedial action in
connection with any Hazardous Materials on such properties; without
limiting the generality of the foregoing, if the Administrative Agent
determines at any time that a material risk exists that any such
report will not be provided within the time referred to above, the
Administrative Agent may retain an environmental consulting firm to
prepare such report at the expense of the Borrower, and the Borrower
hereby grants and agrees to cause any Subsidiary that owns any
property described in such request to grant at the time of such
request, to the Administrative Agent, the Lender Parties, such firm
and any agents or representatives thereof an irrevocable non-
exclusive license, subject to the rights of tenants, to enter onto
their respective properties to undertake such an assessment.
(h) Keeping of Books. Keep, and cause each of its
Subsidiaries to keep, proper books of record and account, in which
full and correct entries shall be made of all financial transactions
and the assets and business of the Borrower and each such Subsidiary
in accordance with generally accepted accounting principles in effect
from time to time.
(i) Maintenance of Properties, Etc. Maintain and preserve,
and cause each of its Subsidiaries to maintain and preserve, all of
its properties that are used or useful in the
60
conduct of its business in good working order and condition, ordinary
wear and tear excepted.
(j) Compliance with Terms of Leaseholds. Make all payments
and otherwise perform all obligations in respect of all leases of
real property to which the Borrower or any of its Subsidiaries is a
party, keep such leases in full force and effect and not allow such
leases to lapse or be terminated or any rights to renew such leases
to be forfeited or cancelled, notify the Administrative Agent of any
default by any party with respect to such leases and cooperate with
the Administrative Agent in all respects to cure any such default,
and cause each of its Subsidiaries to do so except, in any case,
where the failure to do so, either individually or in the aggregate,
would not be reasonably likely to have a Material Adverse Effect.
(k) Transactions with Affiliates. Conduct, and cause each of
its Subsidiaries to conduct, all transactions otherwise permitted
under the Loan Documents with any of their Affiliates on terms that
are fair and reasonable and no less favorable to the Borrower or such
Subsidiary than it would obtain in a comparable arm's-length
transaction with a Person not an Affiliate; provided, however, that
nothing in this Section 5.01(k) shall prevent (i) any transaction
permitted by Section 5.02(e) and (ii) the assignment of existing
Hedge Agreement from the Borrower to Captain D's.
(l) Covenant to Give Security. Upon the request of the
Administrative Agent following the occurrence and during the
continuance of an Event of Default, and at the expense of the
Borrower, (i) within 10 days after such request, furnish to the
Administrative Agent a description of the real and personal
properties of the Borrower and its Subsidiaries in detail reasonably
satisfactory to the Administrative Agent, (ii) within 15 Business
Days after such request, duly execute and deliver to the
Administrative Agent mortgages, pledges, assignments and other
security agreements, as specified by and in form and substance
reasonably satisfactory to the Administrative Agent, securing payment
of all the Obligations of the Borrower under the Loan Documents and
constituting Liens on all such properties, (iii) within 30 days after
such request, take whatever action (including, without limitation,
the filing of Uniform Commercial Code financing statements, the
giving of notices and the endorsement of notices on title documents)
may be necessary or advisable in the opinion of the Administrative
Agent to vest in the Administrative Agent (or in any representative
of the Administrative Agent designated by it) valid and subsisting
Liens on the properties purported to be subject to the security
agreements delivered pursuant to this Section 5.01(l), enforceable
against all third parties in accordance with their terms, (iv) within
60 days after such request, deliver to the Administrative Agent a
signed copy of a favorable opinion, addressed to the Administrative
Agent, of counsel for the Borrower reasonably acceptable to the
Administrative Agent as to the matters contained in clauses (i), (ii)
and (iii) above, as to such security agreements being legal, valid
and binding obligations of the Borrower and its Subsidiaries
enforceable in accordance with their terms and as to such other
matters as the Administrative Agent may reasonably request, and (v)
at any time and from time to time, promptly execute and deliver any
and all further instruments and documents and take all such other
action as the Administrative
61
Agent may deem desirable in obtaining the full benefits of, or in
preserving the Liens of, such security agreements.
(m) Termination of Financing Statements. Upon the request of
the Administrative Agent, and at the expense of the Borrower, within
30 days after such request, furnish to the Administrative Agent
proper termination statements on Form UCC-3 covering such financing
statements as the Administrative Agent may reasonably request that
were listed in the complete requests for information referred to in
Section 3.01(g)(viii)(C).
(n) Real Estate. No later than January 31, 2001, execute and
deliver deeds of trust, trust deeds and mortgages in substantially
the form of Exhibit G hereto and covering the properties listed on
Schedule 5.01(n) (together with each "Mortgage" under the Existing
Credit Agreement and each other Mortgage delivered pursuant to
Section 5.01(l), in each case as amended, supplemented or otherwise
modified from time to time in accordance with their terms, the
"Mortgages"), duly executed by the Borrower (except to the extent any
such properties are subject to Mortgages under the Existing Credit
Agreement). No later than February 28, 2001, execute and deliver
Mortgages with respect to the properties on Schedule 2.06, duly
executed by the Borrower (except to the extent any such properties
are subject to the Mortgages under the Existing Credit Agreement).
No later than February 28, 2001 with respect to the properties on
Schedule 5.01(n) and no later than March 31, 2001 with respect to the
properties on Schedule 2.06, deliver:
(i) Fully paid American Land Title Association Lender's Extended
Coverage title insurance policies or in lieu thereof binding
commitments therefore (together with such policies delivered under
the Existing Credit Agreement, the "Mortgage Policies") in form and
substance, with endorsements and in amount, acceptable to the
Administrative Agent, issued, coinsured and reinsured by title
insurers acceptable to the Administrative Agent, insuring the
Mortgages to be valid first and subsisting Liens on the properties
subject to Mortgages as required by this Section 5.01(n), free and
clear of all defects (including, but not limited to, mechanics' and
materialmen's Liens) and encumbrances, excepting only Permitted
Encumbrances, and providing for such other affirmative insurance
(including endorsements for future advances under the Loan Documents
and for mechanics' and materialmen's Liens) and such coinsurance and
direct access reinsurance as the Administrative Agent may deem
necessary or desirable;
(ii) American Land Title Association form surveys for each of
the properties listed on Schedule 5.01(n) and Schedule 2.06, dated
no more than 60 days prior to the Effective Date, certified to the
Administrative Agent and the issuer of the Mortgage Policies in a
manner satisfactory to the Administrative Agent by a land surveyor
duly registered and licensed in the States in which the property
described in such surveys is located and acceptable to the
Administrative Agent, in form and substance satisfactory to the
Administrative Agent;
62
(iii) An appraisal of each of the properties indicated on
Schedule 5.01(n) and Schedule 2.06, which appraisals shall be from
Xxxxxxxx & Xxxxxxx or any other Person acceptable to the Lender
Parties and otherwise in form and substance satisfactory to the
Lender Parties;
(iv) Evidence of the insurance required by the terms of this
Agreement; and
(v) Evidence that all other action that the Administrative Agent
may deem necessary or desirable in order to create valid first and
subsisting Liens on the properties subject to Mortgages as required
by this Section 5.01(n) has been take or that the necessary steps for
such action have been taken,
provided, however, that the requirements of this Section 5.01(n) do not apply
to any property that is subject to a Mortgage under the Existing Credit
Agreement or that is listed on Schedule 5.01(n) or Schedule 2.06 that is sold
for cash consideration on or before January 26, 2001, and the requirements of
clauses (i), (ii) and (v) above do not apply to any property listed on
Schedule 5.01(n) or Schedule 2.06 that is under a contract entered into on or
before January 31, 2001 and completion of such sale is to take place on or
before March 1, 2001, and provided, further, that the Administrative Agent
may, in its sole discretion, extend by notice in writing, the date for
compliance with any of the requirements set forth in this Section 5.01(n)
(except for the requirements with respect to the properties on Schedule 2.06
which require the consent of Columbus Bank and Trust Company).
(o) SPV's Separate Limited Liability Company Existence. Do, and
shall cause each SPV to do, all things necessary to maintain the
limited liability company existence of each SPV separate and apart
from the Borrower, any division thereof and any Affiliate thereof,
and without limiting the foregoing provisions, cause each SPV to:
(A) conduct its affairs strictly in accordance with
its certificate of formation and operating agreement and
observe all necessary, appropriate and customary corporate
formalities, including, but not limited to, holding meetings
of its board of directors and its members as required by the
certificate of formation and operating agreement of such
SPV, maintaining a separate and current minute book and
passing all resolutions or consents necessary to authorize
actions taken or to be taken;
(B) not suffer any limitation on the authority of its
members to conduct its business and affairs in accordance
with their independent business judgment, or authorize or
suffer any Person other than its members to act on such
SPV's behalf with respect to matters (other than matters
customarily delegated to others under powers of attorney)
for which a limited liability company's own members would
customarily be responsible;
(C) maintain a separate telephone number from those
of the Borrower, or any Affiliate of the Borrower;
63
(D) allocate all overhead expense (including, without
limitation, telephone and other utility charges and legal,
auditing and other professional services) for items shared
between it and the Borrower, any other Affiliate of the
Borrower, or any other Person on the basis of actual use to
the extent practicable and, to the extent such allocation is
not practicable, on a basis reasonably related to actual
use;
(E) the Borrower shall maintain on its books and
records separate accounts for such SPV, including without
limitation, payroll and intercompany transaction accounts,
separate and apart from those of the Borrower and each other
Affiliate of the Borrower or of any other Person to reflect
the financial statements of such SPV separate and apart from
the financial statements of the Borrower, any other
Affiliate of the Borrower or any other Person (other than as
they may be presented or consolidated on a consolidated
basis), and such SPV shall have its own letterhead;
(F) prepare financial statements for such SPV and
insure that any audited consolidated financial statements of
the Borrower or any of their other Affiliates that include
such SPV have notes clearly stating that such SPV is a
limited liability company (operated as a subsidiary and not
as a division) and that its assets will be available first
and foremost to satisfy the claims of its own creditors;
(G) unless the separate ownership of such funds or
assets are properly reflected on the financial statements of
the applicable Loan Parties, not commingle funds or other
assets of such SPV with those of the Borrower, any other
Affiliate of the Borrower or any other Person;
(H) maintain its assets in such a manner that it will
not be difficult or costly to segregate, ascertain or
otherwise identify the individual assets of such SPV,
separate from those of the Borrower, any other Affiliate of
the Borrower or any other Person;
(I) not permit the Borrower, any other Affiliate of
the Borrower or any other Person to pay any of the operating
expenses of such SPV except for payments to be reimbursed in
the ordinary course of business;
(J) maintain an arm's length relationship with the
Borrower and each other Affiliate of the Borrower and not
hold itself out, and will use its best efforts to prevent
the Borrower or any other Affiliate of the Borrower from
holding itself out, as ultimately responsible for the debts
of such SPV or the decisions or actions respecting the daily
business and affairs of such SPV;
(K) require that all of its full-time employees, if
any, identify themselves as such and not as employees of the
Borrower, any other Affiliate of the Borrower or any other
Person (including, without limitation, by means of
64
providing appropriate employees with business or
identification cards identifying such employees as its
employees); and
(L) maintain capitalization adequate for the conduct
of its business and account for and manage its own
liabilities separate from those of any other Person,
including payment of all payroll and administrative expenses
and taxes from its own assets.
; provided, however, that nothing required by this Section
5.01(o) shall require the Borrower or any SPV to take any
action prohibited by, or refrain from taking any action
required by the Real Estate Financing.
(p) Related Documents. (i) Thirty (30) days after the
Effective Date, furnish to the Administrative Agent a certified copy
of the Office Lease duly executed by the parties thereto and (ii)
within 45 (45) days after the Effective Date, furnish to the
Administrative Agent a certified copy of the Administrative Services
Agreements duly executed by the parties thereto.
(q) Intellectual Property. Within ten (10) Business Days
following the Effective Date, cause Captain D's to transfer all
intellectual property related to the "Shoney's" business to the
Borrower.
SECTION 5.02. Negative Covenants. Subject to Section 5.02(r), so long
as any Advance shall remain unpaid, any Letter of Credit shall be outstanding
or any Lender Party shall have any Commitment hereunder, the Borrower will
not, at any time:
(a) Liens, Etc. Create, incur, assume or suffer to exist, or
permit any of its Subsidiaries to create, incur, assume or suffer to
exist, any Lien on or with respect to any of its properties of any
character (including, without limitation, accounts) whether now owned
or hereafter acquired, or sign or file or suffer to exist, or permit
any of its Subsidiaries to sign or file or suffer to exist, under the
Uniform Commercial Code of any jurisdiction, a financing statement
that names the Borrower or any of its Subsidiaries as debtor, or sign
or suffer to exist, or permit any of its Subsidiaries to sign or
suffer to exist, any security agreement authorizing any secured party
thereunder to file such financing statement, or assign, or permit any
of its Subsidiaries to assign, any accounts or other right to receive
income, excluding, however, from the operation of the foregoing
restrictions the following:
(i) Liens created under the Loan Documents and Liens
in respect of the Real Estate Financing;
(ii) Permitted Liens;
(iii) Liens securing the Surviving Debt or any other
Debt described in Section 5.02(b)(iv)(E) and other Liens
existing on the date hereof and described on Schedule
5.02(a) hereto;
65
(iv) purchase money Liens upon or in real property or
equipment acquired or held by the Borrower or any of its
Subsidiaries to secure the purchase price of such property
or equipment or to secure Debt incurred solely for the
purpose of financing the acquisition, construction or
improvement of any such property or equipment to be subject
to such Liens, or Liens existing on any such property or
equipment at the time of acquisition (other than any such
Liens created in contemplation of such acquisition that do
not secure the purchase price), or extensions, renewals or
replacements of any of the foregoing for the same or a
lesser amount; provided, however, that no such Lien shall
extend to or cover any property other than the property or
equipment being acquired, constructed or improved, and no
such extension, renewal or replacement shall extend to or
cover any property not theretofore subject to the Lien being
extended, renewed or replaced; and provided further that the
aggregate principal amount of the Debt secured by Liens
permitted by this clause (iv) at the time of acquisition,
construction or improvement of the property or equipment
subject thereto shall not exceed 100% the cost of such
property or equipment, construction or improvement or of the
then fair value thereof, whichever shall be less and that
any such Debt shall be subject to the limits set forth in
Section 5.02(b)(iii)(B);
(v) Liens arising in connection with Capitalized
Leases permitted under Section 5.02(b)(ii)(C); provided that
no such Lien shall extend to or cover any Collateral or
assets other than the assets subject to such Capitalized
Leases;
(vi) other Liens securing Debt outstanding in an
aggregate principal amount not to exceed $2,500,000,
provided that no such Lien shall extend to or cover any
Collateral;
(vii) the replacement, extension or renewal of any
Lien permitted by clause (iii) above upon or in the same
property theretofore subject thereto or the replacement,
extension or renewal (without increase in the amount or
change in any direct or contingent obligor) of the Debt
secured thereby;
(viii) judgment liens securing amounts not in excess
of $1,000,000 in existence less than thirty days after the
entry thereof or with respect to which execution has been
stayed or with respect to which the appropriate insurance
carrier has agreed in writing that there is full coverage
(subject to a customary deductible not in excess of
$1,000,000) by insurance;
(ix) the license for the use of the "Shoney's Inn"
service xxxx granted to ShoLodge, Inc. by the Borrower
pursuant to the License Agreement dated October 25, 1991;
and
(x) materialmen's, mechanic's, carriers', workmen's
and repairmen's Liens, provided that the Borrower or the
applicable Subsidiary is contesting in good faith and at its
own expense the validity or applicability of any such Lien
by an appropriate legal proceeding which proceeding must
operate to prevent the sale
66
or forfeiture of the real property or any part thereof
encumbered by such Lien; provided further that during the
pendency of such contest, the Borrower or the applicable
Subsidiary shall cause security satisfactory to
Administrative Agent to be provided, assuring the discharge
of the Borrower's or the applicable Subsidiary's obligations
that are the subject of such contest and of any additional
interest charge, penalty or expense arising from or incurred
as a result of such contest.
(b) Debt. Create, incur, assume or suffer to exist, or permit
any of its Subsidiaries to create, incur, assume or suffer to exist,
any Debt other than:
(i) in the case of the Borrower, Debt owed to a
wholly-owned Subsidiary of the Borrower, provided that (x)
such Debt is subordinated to any Debt of the Borrower under
the Loan Documents on the terms and conditions set forth in
Exhibit K hereto and (y) if such Debt is owed to a
Collateral Grantor and is evidenced by a promissory note,
such promissory note shall be pledged in favor of the
Secured Parties pursuant to the terms of the Security
Agreement;
(ii) in the case of any of the Subsidiaries of the
Borrower (other than the SPVs), Debt owed to the Borrower or
to a wholly-owned Subsidiary of the Borrower (provided, that
Debt owed by Shoney's of Canada, Inc., shall not exceed an
aggregate principal amount equal to the excess of (A)
$500,000 over (B) the aggregate amount of Investments made
by the Borrower and its Subsidiaries in Shoney's of Canada,
Inc. pursuant to Section 5.02(f)(i)(B) at any time
outstanding); provided that (x) such Debt is subordinated to
any Debt of such Subsidiary under the Loan Documents on the
terms and conditions set forth in Exhibit K hereto and (y)
if such Debt is owed to a Collateral Grantor and is
evidenced by a promissory note, such Promissory Note shall
be pledged in favor of the Secured Parties pursuant to the
terms of the Security Agreement;
(iii) in the case of the Borrower and any of its
Subsidiaries (other than the SPVs (except for the Debt
described in clause (A) below)),
(A) Debt under the Loan Documents and Debt in
respect of the Real Estate Financing,
(B) Debt secured by Liens permitted by Section
5.02(a)(iv) not to exceed in the aggregate
$3,000,000 at any time outstanding,
(C) Capitalized Leases (other than those
permitted by clause (E) below) not to exceed in the
aggregate $15,000,000 at any time outstanding and,
in the case of Capitalized Leases to which any
Subsidiary of the Borrower is a party, Debt of the
Borrower of the type described in clause (i) of the
definition of "Debt" guaranteeing the Obligations
of such Subsidiary under the Capitalized Leases
permitted under this clause (C),
67
(D) unsecured Debt incurred in the ordinary
course of business for the deferred purchase price
of property or services, maturing within one year
from the date created, and aggregating, on a
Consolidated basis, not more than $2,500,000 at any
one time outstanding,
(E) the Surviving Debt, and any Debt extending
the maturity of, or refunding or refinancing, in
whole or in part, any Surviving Debt, provided that
the terms of any such extending, refunding or
refinancing Debt, and of any agreement entered into
and of any instrument issued in connection
therewith, are otherwise permitted by the Loan
Documents and provided further that the principal
amount of such Surviving Debt shall not be
increased above the principal amount thereof
outstanding immediately prior to such extension,
refunding or refinancing, and the direct and
contingent obligors therefor shall not be changed,
as a result of or in connection with such
extension, refunding or refinancing,
(F) endorsement of negotiable instruments for
deposit or collection or similar transactions in
the ordinary course of business, and
(iv) in the case of the Borrower, Debt in respect of
letters of credit in an aggregate amount not to exceed
$10,000,000 at any time outstanding.
(c) Lease Obligations. (i) Create, incur, assume or suffer to
exist, or permit any of its Subsidiaries to create, incur, assume or
suffer to exist, any obligations as lessee for the rental or hire of
real or personal property of any kind under leases or agreements to
lease (excluding Capitalized Leases) having an original term of one
year or more that would cause the direct and contingent liabilities
of the Borrower and its Subsidiaries, on a Consolidated basis, in
respect of all such obligations to exceed $15,000,000 payable in any
period of 12 consecutive months or (ii) amend, modify or assign, or
permit any Subsidiary to amend, modify or assign, either of the
Master Leases other than any amendment or modification of either
Master Lease that is solely for the purpose of subjecting (in the
ordinary course of business) additional real property to such Master
Lease or terminating (in the ordinary course of business) the
provisions of such Master Lease as they relate to a specific piece
of real property.
(d) Mergers, Etc. Merge into or consolidate with any Person
or permit any Person to merge into it, or permit any of its
Subsidiaries to do so, except that (i) any Subsidiary of the Borrower
may merge into or consolidate with any other Subsidiary of the
Borrower provided that, in the case of any such merger or
consolidation, the Person formed by such merger or consolidation
shall be a wholly-owned Subsidiary of the Borrower, and (ii) any of
the Borrower's Subsidiaries may merge into the Borrower.
(e) Sales, Etc. of Assets. Sell, lease, transfer or otherwise
dispose of, or permit any of its Subsidiaries to sell, lease,
transfer or otherwise dispose of, any assets, or grant any option or
other right to purchase, lease or otherwise acquire any assets,
except:
(i) sales of Inventory in the ordinary course of its
business,
68
(ii) any intercompany transfers necessary to
consummate the Restructuring,
(iii) in a transaction authorized by subsection (d)
of this Section,
(iv) sales of assets for cash and for fair value (as
determined by (x) in the case of a sale for cash
consideration of less than or equal to $2,000,000, a person
authorized by the Borrower's board of directors and (y) in
all other cases, the Borrower's board of directors) in an
aggregate amount not to exceed $50,000,000 in any Fiscal
Year,
(v) so long as no Default shall occur and be
continuing, the grant of any option or other right to
purchase any asset in a transaction which would be permitted
under the provisions of clauses (iv) above,
(vi) leases to current or future franchisees of the
Borrower on terms consistent with prudent business practice,
and
(vii) leases or subleases of properties with an
aggregate value (which value shall be the appraised value,
if appraised, or cost) not to exceed $20,000,000 (excluding
properties currently being leased or subleased), in each
case on terms consistent with prudent business practice,
provided that in the case of sales of assets pursuant to clauses (iv)
above, the Borrower shall, (except as provided in Section
2.06(b)(ii)) within five Business Days following receipt by the
Borrower or any of its Subsidiaries of the Net Cash Proceeds from
such sale, prepay the Advances pursuant to, and in the amount and
order of priority set forth in, Section 2.06(b)(ii), as specified
therein; provided further that in no event shall any of the assets
listed on Schedule 2.06 (or any of the personal property located on
such assets) be sold, transferred or otherwise disposed of without
the prior written consent of Columbus Bank and Trust Company (which
consent may be withheld in its sole discretion).
(f) Investments in Other Persons. Make or hold, or permit any
of its Subsidiaries to make or hold, any Investment in any Person
other than:
(i) (A) Investments by the Borrower and its
Subsidiaries in their Subsidiaries (other than any foreign
Subsidiary) and (B) Investments by the Borrower and its
Subsidiaries in Shoney's of Canada, Inc. in an aggregate
amount invested from the date hereof not to exceed an amount
equal to the excess of (1) $500,000 over (2) the aggregate
amount of intercompany Debt owed by Shoney's of Canada, Inc.
and outstanding at such time, provided that, with respect to
Investments in any newly acquired or created wholly-owned
domestic Subsidiary, such Subsidiary (x) shall become an
additional grantor pursuant to the terms of the Security
Agreement and shall become a Subsidiary Guarantor pursuant
to the terms of the Subsidiary Guaranty and (y) shall engage
in a business similar to that engaged in by the Borrower and
its Subsidiaries on the date hereof;
69
(ii) loans and advances to employees in the ordinary
course of the business of the Borrower and its Subsidiaries
as presently conducted in an aggregate principal amount not
to exceed $300,000 at any time outstanding;
(iii) Investments by the Borrower and its
Subsidiaries in Cash Equivalents;
(iv) Investments by the Borrower in Hedge Agreements
permitted under Section 5.02(b)(i)(A);
(v) Investments consisting of intercompany Debt
permitted under Section 5.02(b)(ii) and (b)(iii);
(vi) Investments existing on the date hereof and
described on Schedule 4.01(kk) hereto;
(vii) Investments consisting of transfers of assets
that are otherwise permitted under Section 5.02(e); and
(viii) other Investments in an aggregate amount
invested not to exceed $2,000,000; provided that with
respect to Investments made under this clause (viii): (1)
any newly acquired or created Subsidiary of the Borrower or
any of its Subsidiaries shall be a wholly-owned domestic
Subsidiary thereof; (2) immediately before and after giving
effect thereto, no Default shall have occurred and be
continuing or would result therefrom; (3) any business
acquired or invested in pursuant to this clause (vii) shall
be in a similar line of business as the business of the
Borrower or any of its Subsidiaries; and (4) such Subsidiary
shall become an additional grantor pursuant to the terms of
the Security Agreement and shall become a Subsidiary
Guarantor pursuant to the terms of the Subsidiary Guaranty.
(g) Dividends, Etc. Declare or pay any dividends, purchase,
redeem, retire, defease or otherwise acquire for value any of its
capital stock or any warrants, rights or options to acquire such
capital stock, now or hereafter outstanding, return any capital to
its stockholders as such, make any distribution of assets, capital
stock, warrants, rights, options, obligations or securities to its
stockholders as such or issue or sell any capital stock or any
warrants, rights or options to acquire such capital stock, or permit
any of its Subsidiaries to do any of the foregoing or permit any of
its Subsidiaries to purchase, redeem, retire, defease or otherwise
acquire for value any capital stock of the Borrower or any warrants,
rights or options to acquire such capital stock or to issue or sell
any capital stock or any warrants, rights or options to acquire such
capital stock, except that, so long as no Default shall have occurred
and be continuing at the time of any action described in clauses (i)
through (iv) below or would result therefrom, (i) the Borrower may
(A) declare and pay dividends and distributions payable only in
common stock of the Borrower and (B) except to the extent the Net
Cash Proceeds thereof are required to be applied to the prepayment
of the Advances pursuant to Section 2.06(b), purchase, redeem,
retire, defease or otherwise acquire shares of its capital stock with
the proceeds
70
received from the issue of new shares of its capital stock with equal
or inferior voting powers, designations, preferences and rights, (ii)
any Subsidiary of the Borrower may (A) declare and pay cash dividends
to the Borrower and (B) declare and pay cash dividends to any other
wholly-owned Subsidiary of the Borrower of which it is a Subsidiary,
(iii) the Borrower may issue (A) rights or options to acquire capital
stock of the Borrower pursuant to employee stock purchase plans,
director or employee option plans and other employee benefit plans
and (B) common stock upon the exercise of options issued under, or
pursuant to, employee stock purchase plans, director or employee
option plans and other employee benefit plans and (iv) the Borrower
and its Subsidiaries may consummate the transfers of assets permitted
by Section 5.02(e).
(h) Change in Nature of Business. Make, or permit any of its
Subsidiaries to make, any material change in the nature of its
business as carried on at the date hereof.
(i) Charter Amendments. Amend, or permit any of its
Subsidiaries to amend, its certificate of incorporation or bylaws if
such amendment would have a Material Adverse Effect.
(j) Accounting Changes. Make or permit, or permit any of its
Subsidiaries to make or permit, any change in (i) accounting policies
or reporting practices, except as required or permitted by generally
accepted accounting principles or (ii) the Fiscal Year.
(k) Prepayments, Etc., of Debt. (i) Prepay, redeem, purchase,
convert, defease or otherwise satisfy prior to the scheduled maturity
thereof in any manner, or make any payment of, any Debt, other than
(A) the prepayment of the Advances in accordance with the terms of
this Agreement, (B) regularly scheduled or required repayments or
redemptions of Surviving Debt or other Debt permitted hereby, (C) the
conversion of Subordinated Debt in accordance with its terms and (D)
secured Debt in an amount not to exceed $25,000, provided that upon
payment of such Debt the Borrower executes and delivers to the
Administrative Agent mortgages, pledges, assignments or other
security agreements in form and substance satisfactory to the
Administrative Agent securing payment of all the Obligations of the
Borrower under the Loan Documents and constituting Liens on the
assets that secured such Debt, or (ii) amend, modify or change in any
manner any term or condition of any Surviving Debt or Subordinated
Debt (except as contemplated to effect the Restructuring), or permit
any of its Subsidiaries to do any of the foregoing other than to
prepay any Debt payable to the Borrower and to prepay the Debentures
and XXXXX on terms acceptable to the Administrative Agent.
(l) Ownership Change. Take, or permit any of its Subsidiaries
to take, any action that would result in an "ownership change" (as
defined in Section 382 of the Internal Revenue Code) with respect to
the Borrower or any of its Subsidiaries or the application of the
"separate return limitation year" or "consolidated return change of
ownership" limitations under the Federal income tax consolidated
return regulations with respect to the Borrower or any of its
Subsidiaries.
(m) Negative Pledge. Enter into or suffer to exist, or permit
any of its Subsidiaries to enter into or suffer to exist, any
agreement prohibiting or conditioning the
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creation or assumption of any Lien upon any of its property or assets
other than (i) in favor of the Secured Parties or (ii) in connection
with (A) any Surviving Debt or (B) any Debt in respect of the Real
Estate Financing or (C) any Debt permitted by Section 5.02(b)(iv)(B)
hereof.
(n) Partnerships, Etc. Except for the partnerships listed in
Schedule 5.02(n), become a general partner in any general or limited
partnership or joint venture, or permit any of its Subsidiaries to
do so, other than any Subsidiary the sole assets of which consist of
its interest in such partnership or joint venture.
(o) Speculative Transactions. Engage, or permit any of its
Subsidiaries to engage, in any transaction involving commodity
options or futures contracts or any similar speculative transactions
(including, without limitation, take-or-pay contracts, except for
Hedge Agreements permitted under Section 5.02(b).
(p) Capital Expenditures. Make, or permit any of its
Subsidiaries to make, any Capital Expenditures that would cause the
aggregate of all such Capital Expenditures made by the Borrower and
its Subsidiaries in any Fiscal Year to exceed $3,000,000; provided
that the Capital Expenditures made by the Borrower and its
Subsidiaries in the fiscal quarter ended February 18, 2001 shall not
exceed $1,000,000.
(q) Franchise Agreements. Will not permit, at any time, any
of its Subsidiaries to, (a) terminate or alter any of the material
terms and conditions of any of the franchise agreements pursuant to
which the Borrower or any such Subsidiary is the franchisor in such
a way so as to (i) prohibit the assignment by the franchisor (by way
of collateral security) of all of its rights and benefits in the
franchise agreements or (ii) significantly reduce the aggregate
royalty fees or advertising fees payable by the franchisees and (b)
enter into any franchise agreements which would not permit the
assignment by the franchisor (by way of collateral security) of all
of its rights and benefits in such franchise agreements or which
would contain fee arrangements which are materially less beneficial,
in the aggregate, to the Borrower and its Subsidiaries than the fee
arrangements contained in existing franchise agreements of the
Borrower and its Subsidiaries.
(r) Existing Subsidiary Restrictions. None of the foregoing
covenants in this Section 5.02 shall, prior to the date on which the
Debt under the Indenture has been paid in full or defeased or
otherwise satisfied or amended to remove the applicable restriction,
restrict the transfer of funds by an Existing Subsidiary to the
Borrower sufficient to satisfy when due all payment obligations of
the Borrower or TPI in respect of the Debentures, including, without
limitation, the payment of principal, premium, if any, interest or
the Repurchase Price or the Redemption Price, so long as the time of
such transfer, the payment of such obligations in respect of the
Debentures is permitted to be made under Article XIV of the
Indenture.
(s) Amendment of Related Documents. Cancel or terminate any
Related Document or consent to or accept any cancellation or
termination thereof, or amend, modify or change in any manner any
term or condition of any Related Document or give
72
any consent, waiver or approval thereunder, in each case in a manner
that would have a Material Adverse Effect.
SECTION 5.03. Reporting Requirements. So long as any Advance shall
remain unpaid, any Letter of Credit shall be outstanding or any Lender Party
shall have any Commitment hereunder, the Borrower will furnish to the Lender
Parties and the Administrative Agent.
(a) Notice of Default or Material Adverse Effect. (i) Within
two Business Days after the occurrence of each Default or any event,
development or occurrence reasonably likely to have a Material
Adverse Effect continuing on the date of such statement, a statement
of the chief financial officer or principal financial officer of the
Borrower setting forth details of such Default or such event,
development or occurrence and the action that the Borrower has taken
and proposes to take with respect thereto, and (ii) within five
Business Days after the occurrence of each "Default" (as defined in
the Credit Agreement dated the date hereof for the Captain D's
Financing) or any event, development or occurrence reasonably likely
to have a "Material Adverse Effect" (as defined in the Credit
Agreement dated the date hereof for the Captain D's Financing)
continuing on the date of such statement, a statement of the chief
financial officer or principal financial officer of the Borrower
setting forth details of such Default or such event, development or
occurrence and the action that Captain D's has taken and proposes to
take with respect thereto.
(b) Monthly Financials. Within 30 days after the end of each
fiscal accounting period, a statement of income of the Borrower and
its Subsidiaries as of the end of such fiscal accounting period in
substantially the form of Exhibit J hereto (or in such other form
acceptable to the Administrative Agent) and duly certified by the
corporate controller, chief financial officer, vice president of
finance or any other principal financial officer of the Borrower.
(c) Quarterly Financials. Within 45 days after the end of
each of the first three fiscal quarters of each Fiscal Year,
Consolidated balance sheets of the Borrower and its Subsidiaries as
of the end of such fiscal quarter and Consolidated statements of
income and cash flow of the Borrower and its Subsidiaries for the
period commencing at the end of the previous fiscal quarter and
ending with the end of such fiscal quarter and Consolidated
statements of income and cash flow of the Borrower and its
Subsidiaries for the period commencing at the end of the previous
Fiscal Year and ending with the end of such fiscal quarter, setting
forth in each case in comparative form the corresponding figures for
the corresponding period of the preceding Fiscal Year, all in
reasonable detail and duly certified (subject to year - end audit
adjustments) by the corporate controller or chief financial officer
or vice president of finance or any other principal financial officer
of the Borrower as having been prepared in accordance with GAAP,
together with (i) a certificate of said officer stating that no
Default has occurred and is continuing or, if a Default has occurred
and is continuing, a statement as to the nature thereof and the
action that the Borrower has taken and proposes to take with respect
thereto and (ii) a schedule in form satisfactory to the
Administrative Agent of the computations used by the
73
Borrower in determining compliance with the covenants contained in
Sections 5.04(a) through (d), provided that in the event of any
change in GAAP used in the preparation of such financial statements,
the Borrower shall also provide, if necessary for the determination
of compliance with Section 5.04, a statement of reconciliation
conforming such financial statements to GAAP.
(d) Annual Financials. Within 90 days after the end of each
Fiscal Year, a copy of the annual report for such year for the
Borrower and its Subsidiaries, including therein the Consolidated
balance sheet of the Borrower and its Subsidiaries as of the end of
such Fiscal Year and Consolidated statements of income and cash flow
of the Borrower and its Subsidiaries for such Fiscal Year,
accompanied by an opinion acceptable to the Required Lenders of Ernst
& Young or other independent public accountants of recognized
standing acceptable to the Administrative Agent, together with (i)
a certificate of such accounting firm to the Lender Parties stating
that in the course of the regular audit of the business of the
Borrower and its Subsidiaries, which audit was conducted by such
accounting firm in accordance with generally accepted auditing
standards, such accounting firm has obtained no knowledge that a
Default of a financial nature under Section 5.02(a), 5.02(b),
5.02(f), 5.02(p) or 5.04 has occurred and is continuing, or if, in
the opinion of such accounting firm, a Default of a financial nature
under Section 5.02(a), 5.02(b), 5.02(f), 5.02(p) or 5.04 has occurred
and is continuing, a statement as to the nature thereof, (ii) a
schedule in form satisfactory to the Administrative Agent of the
computations used by such accountants in determining, as of the end
of such Fiscal Year, compliance with the covenants contained in
Sections 5.04(a) through (d), provided that in the event of any
change in GAAP used in the preparation of such financial statements,
the Borrower shall also provide, if necessary for the determination
of compliance with Section 5.04, a statement of reconciliation
conforming such financial statements to GAAP and (iii) a certificate
of the corporate controller, chief financial officer or principal
financial officer of the Borrower stating that no Default has
occurred and is continuing or, if a Default has occurred and is
continuing, a statement as to the nature thereof and the action that
the Borrower has taken and proposes to take with respect thereto.
(e) Annual Forecasts. As soon as available and in any event
no later than 30 days after the end of each Fiscal Year, forecasts
prepared by management of the Borrower, in form satisfactory to the
Administrative Agent, of balance sheets, income statements and cash
flow statements on a quarterly basis for the Fiscal Year following
such Fiscal Year then ended and on an annual basis for each Fiscal
Year thereafter until the Termination Date.
(f) ERISA Events and ERISA Reports. Promptly and in any event
within 10 days after any Loan Party or any ERISA Affiliate knows or
has reason to know that any ERISA Event has occurred, a statement of
the chief financial officer or principal financial officer of the
Borrower describing such ERISA Event and the action, if any, that
such Loan Party or such ERISA Affiliate has taken and proposes to
take with respect thereto and (ii) on the date any records, documents
or other information must be furnished to the
74
PBGC with respect to any Plan pursuant to Section 4010 of ERISA, a
copy of such records, documents and information.
(g) Plan Terminations; Plan Annual Reports; Multiemployer Plan
Notices. (i) Promptly and in any event within two Business Days after
receipt thereof by any Loan Party or any ERISA Affiliate, copies of
each notice from the PBGC stating its intention to terminate any Plan
or to have a trustee appointed to administer any Plan.
(ii) Promptly upon the request of the Administrative Agent,
copies of each Schedule B (Actuarial Information) to the annual
report (Form 5500 Series) with respect to each Plan, and
(iii) Promptly and in any event within five Business Days after
receipt thereof by any Loan Party or any ERISA Affiliate from the
sponsor of a Multiemployer Plan, copies of each notice concerning (A)
the imposition of Withdrawal Liability by any such Multiemployer
Plan, (B) the reorganization or termination, within the meaning of
Title IV of ERISA, of any such Multiemployer Plan or (C) the amount
of liability incurred, or that may be incurred, by such Loan Party
or any ERISA Affiliate in connection with any event described in
clause (A) or (B); provided, however, that the notice under this
clause (iii) is required to be given only if the event or
circumstance identified in such notice, when aggregated with any
other events or circumstances required to be reported under Section
5.03(f) and (g) could reasonably be expected to result in a Material
Adverse Effect.
(h) Litigation. Promptly after the commencement thereof,
notice of all actions, suits, investigations, litigation and
proceedings before any court or governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign,
affecting any Loan Party or any of its Subsidiaries of the type
described in Section 4.01(i), and promptly after the occurrence
thereof, notice of any adverse change in the status or the financial
effect on any Loan Party or any of its Subsidiaries of the Disclosed
Litigation from that described on Schedule 3.01(d). For purposes of
this subclause (h), any litigation, arbitration, or governmental
investigation or proceeding which involves a damage claim of
$1,500,000 or less need not be the subject of any such notice unless
it is one of a series of claims arising out of the same set of facts
or circumstances which, in the aggregate, exceed $10,000,000.
(i) Securities Reports. Promptly after the sending or filing
thereof, copies of all proxy statements, financial statements and
reports that any Loan Party or any of its Subsidiaries sends to its
stockholders, and copies of all regular, periodic and special
reports, and all registration statements, that any Loan Party or any
of its Subsidiaries files with the Securities and Exchange Commission
or any governmental authority that may be substituted therefor, or
with any national securities exchange, in each case excluding the
exhibits thereto unless requested by the Administrative Agent.
(j) Creditor Reports. Promptly after the furnishing thereof,
copies of any statement or report furnished to any other holder of
the securities of any Loan Party or of any of its Subsidiaries
pursuant to the terms of any indenture, loan or credit or similar
75
agreement and not otherwise required to be furnished to the Lender
Parties or the Administrative Agent pursuant to any other clause of
this Section 5.03.
(k) Agreement Notices. Promptly upon receipt thereof, copies
of all notices, requests and other documents received by any Loan
Party or any of its Subsidiaries under or pursuant to any indenture,
loan or credit or similar agreement regarding or related to any
breach or default by any party thereto or any other event, in each
case that could materially impair the value of the interests or the
rights of any Loan Party or otherwise have a Material Adverse Effect.
(l) Revenue Agent Reports. Within 30 days after receipt,
copies of all Revenue Agent Reports (Internal Revenue Service Form
886), or other written proposals of the Internal Revenue Service,
that propose, determine or otherwise set forth positive adjustments
to the Federal income tax liability of the affiliated group (within
the meaning of Section 1504(a)(1) of the Internal Revenue Code) of
which the Borrower is a member aggregating $2,000,000 or more.
(m) Environmental Conditions. Promptly after the assertion
or occurrence thereof, notice of any Environmental Action against or
of any noncompliance by any Loan Party or any of its Subsidiaries
with any Environmental Law or Environmental Permit that (i) could
reasonably be expected to have a Material Adverse Effect or (ii)
cause any property described in the Mortgages to be subject to any
restrictions which would interfere with its normal use or operation.
(n) Real Property. As soon as available and in any event
within 90 days after the end of each Fiscal Year, a report
supplementing Schedules 4.01(ii) and 4.01(jj) hereto, including a
list of all real property disposed of by the Borrower or any of its
Subsidiaries during such Fiscal Year (which list shall include the
location of such real property and the Net Cash Proceeds received by
the Borrower and its Subsidiaries from such disposal) and a list and
description (including the street address, state, record owner, book
value thereof), of all real property acquired during such Fiscal
Year.
(o) Insurance. As soon as available and in any event within
90 days after the end of each Fiscal Year, a report summarizing the
insurance coverage required under the Credit Agreement (specifying
type, amount and carrier) in effect for the Borrower and its
Subsidiaries and containing such additional information as any Lender
Party (through the Administrative Agent) may reasonably specify.
(p) Schedule 4.01(v). Within 30 Business Days following the
Effective Date, an updated Schedule 4.01(v) in form and substance
satisfactory to the Administrative Agent.
(q) Other Information. Such other information respecting the
business, condition (financial or otherwise), operations,
performance, properties or prospects of any Loan Party or any of its
Subsidiaries as any Lender Party (through the Administrative Agent)
may from time to time reasonably request.
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SECTION 5.04. Financial Covenants. So long as any Advance shall remain
unpaid, any Letter of Credit shall be outstanding or any Lender Party shall
have any Commitment hereunder, the Borrower will:
(a) Interest Coverage Ratio. Maintain as of the end of each
fiscal quarter of the Borrower (commencing with the fiscal quarter
ended May 13, 2001) a ratio of (i) EBITDA of the Borrower for the
relevant Measurement Period to (ii) Interest Expense of the Borrower
for such Measurement Period of not less than 1.00:1.
(b) Minimum EBITDA. Maintain as of the end of the fiscal
quarter ended as of February 18, 2001 Adjusted EBITDA losses of not
more than ($2,500,000) for such fiscal quarter.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the following events
("Events of Default") shall occur and be continuing:
(a) (i) the Borrower shall fail to pay any principal of any
Advance when the same shall become due and payable or (ii) the
Borrower shall fail to pay any interest on any Advance, or any Loan
Party shall fail to make any other payment under any Loan Document,
in each case under this clause (ii) within 3 Business Days after the
same becomes due and payable; or
(b) any representation or warranty made by any Loan Party (or
any of its officers) under or in connection with any Loan Document
shall prove to have been incorrect in any material respect when made
(provided that if the information set forth on Schedule 5.02(a) is
not correct in any material respect, the Borrower shall have 10 days
following the Effective Date to cure such failure before such failure
shall become an "Event of Default"); or
(c) the Borrower shall fail to perform or observe any term,
covenant or agreement contained in Section 2.14, 5.01(d) (to the
extent that such covenant relates to casualty or liability insurance
in respect of Collateral), (e), (g), (l), (m) or (n), 5.02, 5.03 or
5.04; or
(d) any Loan Party shall fail to perform any other term,
covenant or agreement contained in any Loan Document on its part to
be performed or observed if such failure shall remain unremedied for
30 days after the earlier of the date on which (A) a Responsible
Officer of any Loan Party becomes aware of such failure or (B)
written notice thereof shall have been given to the Borrower by the
Administrative Agent or any Lender Party; or
(e) any Loan Party or any of its Subsidiaries (other than
Captain D's and its Subsidiaries) shall fail to pay any principal of,
premium or interest on or any other amount payable in respect of any
Debt that is outstanding in a principal or notional
77
amount of at least $5,000,000 either individually or in the aggregate
(but excluding Debt outstanding hereunder) of such Loan Party or such
Subsidiary (as the case may be), when the same becomes due and
payable (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise), and such failure shall continue
after the applicable grace period, if any, specified in the agreement
or instrument relating to such Debt; or any other event shall occur
or condition shall exist under any agreement or instrument relating
to any such Debt and shall continue after the applicable grace
period, if any, specified in such agreement or instrument, if the
effect of such event or condition is to accelerate, or to permit the
acceleration of, the maturity of such Debt or otherwise to cause, or
to permit the holder thereof to cause, such Debt to mature; or any
such Debt shall be declared to be due and payable or required to be
prepaid or redeemed (other than by a regularly scheduled required
prepayment or redemption), purchased or defeased, or an offer to
prepay, redeem, purchase or defease such Debt shall be required to
be made, in each case prior to the stated maturity thereof; or
(f) any Loan Party or any of its Subsidiaries shall generally
not pay its debts as such debts become due, or shall admit in writing
its inability to pay its debts generally, or shall make a general
assignment for the benefit of creditors; or any proceeding shall be
instituted by or against any Loan Party or any of its Subsidiaries
seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the
appointment of a receiver, trustee, or other similar official for it
or for any substantial part of its property and, in the case of any
such proceeding instituted against it (but not instituted by it) that
is being diligently contested by it in good faith, either such
proceeding shall remain undismissed or unstayed for a period of 30
days or any of the actions sought in such proceeding (including,
without limitation, the entry of an order for relief against, or the
appointment of a receiver, trustee, custodian or other similar
official for, it or any substantial part of its property) shall
occur; or any Loan Party or any of its Subsidiaries shall take any
corporate action to authorize any of the actions set forth above in
this subsection (f); or
(g) any judgment or court order for the payment of money in
excess of $5,000,000 shall be rendered against any Loan Party or any
of its Subsidiaries and either (i) enforcement proceedings shall have
been commenced by any creditor upon such judgment or court order or
(ii) there shall be any period of 30 consecutive days during which
such judgment shall not have been discharged or a stay of enforcement
of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; provided, however, that any such
judgment or court order shall not be an Event of Default under this
Section 6.01(g) if and for so long as (i) the entire amount of such
judgment or court order is covered by a valid and binding policy of
insurance between the defendant and the insurer covering payment
thereof and (ii) such insurer, which shall be rated at least "A" by
A.M. Best Company, has been notified of, and has not disputed the
claim made for payment of the amount of such judgment or order; or
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(h) any non-monetary judgment or order shall be rendered
against any Loan Party or any of its Subsidiaries that is reasonably
likely to have a Material Adverse Effect, and there shall be any
period of 30 consecutive days during which a stay of enforcement of
such judgment or order, by reason of a pending appeal or otherwise,
shall not be in effect; or
(i) any provision of any Loan Document after delivery thereof
pursuant to Section 3.01 or 5.01(l) shall for any reason cease to be
valid and binding on or enforceable against any Loan Party party to
it, or any such Loan Party shall so state in writing; or
(j) any Collateral Document after delivery thereof pursuant
to Section 3.01 or 5.01(l) shall for any reason (other than pursuant
to the terms thereof) cease to create a valid and perfected first
priority lien on and security interest in the Collateral purported
to be covered thereby, other than in respect of any item or items of
Collateral the fair market value of which, either individually or in
the aggregate, does not exceed $5,000,000 ; or
(k) (i) any Person or two or more Persons acting in concert
shall have acquired beneficial ownership (within the meaning of Rule
13d-3 of the Securities and Exchange Commission under the Securities
Exchange Act of 1934), directly or indirectly, of Voting Stock of the
Borrower (or other securities convertible into such Voting Stock)
representing 20% or more of the combined voting power of all Voting
Stock of the Borrower; or (ii) a majority of the board of directors
of the Borrower shall consist of directors other than (A) directors
holding office as of the date of this Agreement or (B) directors
whose election was recommended by such directors or subsequent
directors so recommended; or (iii) any Person or two or more Persons
acting in concert shall have acquired by contract or otherwise, or
shall have entered into a contract or arrangement that, upon
consummation, will result in its or their acquisition of the power
to exercise, directly or indirectly, a controlling influence over the
management or policies of the Borrower; or
(l) any ERISA Event shall have occurred with respect to a Plan
and the sum (determined as of the date of occurrence of such ERISA
Event) of the Insufficiency of such Plan and the Insufficiency of any
and all other Plans with respect to which an ERISA Event shall have
occurred and then exist (or the liability of the Loan Parties and the
ERISA Affiliates related to such ERISA Event) exceeds $5,000,000; or
(m) any Loan Party or any ERISA Affiliate shall have been
notified by the sponsor of a Multiemployer Plan that it has incurred
Withdrawal Liability to such Multiemployer Plan in an amount that,
when aggregated with all other amounts required to be paid to
Multiemployer Plans by the Loan Parties and the ERISA Affiliates as
Withdrawal Liability (determined as of the date of such
notification), exceeds $5,000,000 or requires payments exceeding
$1,000,000 per annum; or
(n) any Loan Party or any ERISA Affiliate shall have been
notified by the sponsor of a Multiemployer Plan that such
Multiemployer Plan is in reorganization or is being terminated,
within the meaning of Title IV of ERISA, and as a result of such
reorganization or termination the aggregate annual contributions of
the Loan Parties and the ERISA Affiliates to all Multiemployer Plans
that are then in reorganization or being terminated have been or will
be increased over the amounts contributed to such Multiemployer Plans
for the plan years of such Multiemployer Plans immediately preceding
the plan year in which such reorganization or termination occurs by
an amount exceeding $1,000,000;
then, and in any such event, the Administrative Agent (i) shall at the
request, or may with the consent, of the Required Lenders, by notice to the
Borrower, declare the obligation of each Appropriate Lender to make Advances
(other than Letter of Credit Advances by the Issuing Bank or a Working
Capital Lender pursuant to Section 2.03(c)) and of the Issuing Bank to issue
Letters of Credit to be terminated, whereupon the same shall forthwith
terminate, and (ii) shall at the request, or may with the consent, of the
Required Lenders, by notice to the Borrower, declare the Notes, all interest
thereon and all other amounts payable under this Agreement and the other Loan
Documents to be forthwith due and payable, whereupon the Notes, all such
interest and all such amounts shall become and be forthwith due and payable,
without presentment, demand, protest or further notice of any kind, all of
which are hereby expressly waived by the Borrower; provided, however, that in
the event of an actual or deemed entry of an order for relief with respect to
the Borrower under the Federal Bankruptcy Code, (x) the obligation of each
Appropriate Lender to make Advances (other than Letter of Credit Advances by
the Issuing Bank or a Working Capital Lender pursuant to Section 2.03(c)) and
Working Capital Advances by a Working Capital Lender pursuant to Section
2.02(b) and of the Issuing Bank to issue Letters of Credit shall
automatically be terminated and (y) the Notes, all such interest and all such
amounts shall automatically become and be due and payable, without
presentment, demand, protest or any notice of any kind, all of which are
hereby expressly waived by the Borrower.
SECTION 6.02. Actions in Respect of the Letters of Credit upon Default.
If any Event of Default shall have occurred and be continuing, the
Administrative Agent may, or shall at the request of the Required Lenders,
irrespective of whether it is taking any of the actions described in Section
6.01 or otherwise, make demand upon the Borrower to, and forthwith upon such
demand the Borrower will, pay to the Administrative Agent on behalf of the
Lender Parties in same day funds at the Administrative Agent's office
designated in such demand, for deposit in the L/C Cash Collateral Account, an
amount equal to the aggregate Available Amount of all Letters of Credit then
outstanding. If at any time the Administrative Agent determines that any
funds held in the L/C Cash Collateral Account are subject to any right or
claim of any Person other than the Administrative Agent and the Lender
Parties or that the total amount of such funds is less than the aggregate
Available Amount of all Letters of Credit, the Borrower will, forthwith upon
demand by the Administrative Agent, pay to the Administrative Agent, as
additional funds to be deposited and held in the L/C Cash Collateral Account,
an amount equal to the excess of (a) such aggregate Available Amount over (b)
the total amount of funds, if any, then held in the L/C Cash Collateral
Account that the Administrative Agent determines to be free and clear of any
such right and claim.
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ARTICLE VII
THE ADMINISTRATIVE AGENT
SECTION 7.01. Authorization and Action. Each Lender Party (in its
capacities as a Lender, the Issuing Bank (if applicable) and a potential
Hedge Bank) hereby appoints and authorizes the Administrative Agent to take
such action as agent on its behalf and to exercise such powers and discretion
under this Agreement and the other Loan Documents as are delegated to the
Administrative Agent by the terms hereof and thereof, together with such
powers and discretion as are reasonably incidental thereto. As to any
matters not expressly provided for by the Loan Documents (including, without
limitation, enforcement or collection of the Notes), the Administrative Agent
shall not be required to exercise any discretion or take any action, but
shall be required to act or to refrain from acting (and shall be fully
protected in so acting or refraining from acting) upon the instructions of
the Required Lenders or such other Lenders as required by Section 8.01, and
such instructions shall be binding upon all Lender Parties and all holders of
Notes; provided, however, that the Administrative Agent shall not be required
to take any action that exposes the Administrative Agent to personal
liability or that is contrary to this Agreement or applicable law. To the
extent permitted in the Security Agreement and the Mortgages, the
Administrative Agent may release any assets permitted to be sold, leased,
transferred or otherwise disposed of pursuant to the terms hereof. The
Administrative Agent agrees to give to each Lender Party prompt notice of
each notice given to it by the Borrower pursuant to the terms of this
Agreement.
SECTION 7.02. Agent's Reliance, Etc. Neither the Administrative Agent
nor any of its directors, officers, agents or employees shall be liable for
any action taken or omitted to be taken by it or them under or in connection
with the Loan Documents, except for its or their own gross negligence or
willful misconduct. Without limitation of the generality of the foregoing,
the Administrative Agent: (a) may treat the payee of any Note as the holder
thereof until the Administrative Agent receives and accepts an Assignment and
Acceptance entered into by the Lender that is the payee of such Note, as
assignor, and an Eligible Assignee, as assignee, as provided in Section 8.07;
(b) may consult with legal counsel (including counsel for any Loan Party),
independent public accountants and other experts selected by it with
reasonable care and shall not be liable for any action taken or omitted to be
taken in good faith by it in accordance with the advice of such counsel,
accountants or experts; (c) makes no warranty or representation to any Lender
Party and shall not be responsible to any Lender Party for any statements,
warranties or representations (whether written or oral) made in or in
connection with the Loan Documents; (d) shall not have any duty to ascertain
or to inquire as to the performance or observance of any of the terms,
covenants or conditions of any Loan Document on the part of any Loan Party or
to inspect the property (including the books and records) of any Loan Party;
(e) shall not be responsible to any Lender Party for the due execution,
legality, validity, enforceability, genuineness, sufficiency or value of, or
the perfection or priority of any lien or security interest created or
purported to be created under or in connection with, any Loan Document or any
other instrument or document furnished pursuant thereto; and (f) shall incur
no liability under or in respect of any Loan Document by acting upon any
notice, consent, certificate or other instrument or writing (which may be by
telegram, telecopy or telex) believed by it to be genuine and signed or sent
by the proper party or parties.
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SECTION 7.03. Bank of America and Affiliates. With respect to its
Commitments, the Advances made by it and the Notes issued to it, Bank of
America shall have the same rights and powers under the Loan Documents as any
other Lender Party and may exercise the same as though it were not the
Administrative Agent; and the term "Lender Party" or "Lenders Parties" shall,
unless otherwise expressly indicated, include Bank of America in its
individual capacity. Bank of America and its affiliates may accept deposits
from, lend money to, act as trustee under indentures of, accept investment
banking engagements from and generally engage in any kind of business with,
any Loan Party, any of its Subsidiaries and any Person who may do business
with or own securities of any Loan Party or any such Subsidiary, all as if
Bank of America were not the Administrative Agent and without any duty to
account therefor to the Lender Parties.
SECTION 7.04. Lender Party Credit Decision. Each Lender Party
acknowledges that it has, independently and without reliance upon the
Administrative Agent or any other Lender Party and based on the financial
statements referred to in Section 4.01 and such other documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender Party also acknowledges
that it will, independently and without reliance upon the Administrative
Agent or any other Lender Party and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under this Agreement.
SECTION 7.05. Indemnification. (a) Each Lender Party severally agrees
to indemnify the Administrative Agent (to the extent not promptly reimbursed
by the Borrower) from and against such Lender Party's ratable share
(determined as provided below) of any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever that may be imposed on,
incurred by, or asserted against the Administrative Agent in any way relating
to or arising out of the Loan Documents or any action taken or omitted by the
Administrative Agent under the Loan Documents; provided, however, that no
Lender Party shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the Administrative Agent's gross
negligence or willful misconduct. Without limitation of the foregoing, each
Lender Party agrees to reimburse the Administrative Agent promptly upon
demand for its ratable share of any costs and expenses (including, without
limitation, fees and expenses of counsel) payable by the Borrower under
Section 8.04, to the extent that the Administrative Agent is not promptly
reimbursed for such costs and expenses by the Borrower. For purposes of this
Section 7.05(a), the Lender Parties' respective ratable shares of any amount
shall be determined, at any time, according to the sum of (a) the aggregate
principal amount of the Advances outstanding at such time and owing to the
respective Lender Parties, (b) their respective Pro Rata Shares of the
aggregate Available Amount of all Letters of Credit outstanding at such time,
and (c) their respective Unused Working Capital Commitments at such time;
provided that the aggregate principal amount of Letter of Credit Advances
owing to the Issuing Bank shall be considered to be owed to the Working
Capital Lenders ratably in accordance with their respective Working Capital
Commitments. In the event that any Defaulted Advance shall be owing by any
Defaulting Lender at any time, such Lender Party's Commitment with respect to
the Facility under which such Defaulted Advance was required to have been
made shall be considered to be unused for purposes of this Section 7.05(a) to
the extent of the
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amount of such Defaulted Advance. The failure of any Lender Party to
reimburse the Administrative Agent promptly upon demand for its ratable share
of any amount required to be paid by the Lender Party to the Administrative
Agent as provided herein shall not relieve any other Lender Party of its
obligation hereunder to reimburse the Administrative Agent for its ratable
share of such amount, but no Lender Party shall be responsible for the
failure of any other Lender Party to reimburse the Administrative Agent for
such other Lender Party's ratable share of such amount. Without prejudice to
the survival of any other agreement of any Lender Party hereunder, the
agreement and obligations of each Lender Party contained in this Section
7.05(a) shall survive the payment in full of principal, interest and all
other amounts payable hereunder and under the other Loan Documents.
(b) Each Lender Party severally agrees to indemnify the Issuing Bank (to
the extent not promptly reimbursed by the Borrower) from and against such
Lender Party's ratable share (determined as provided below) of any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever that
may be imposed on, incurred by, or asserted against the Issuing Bank in any
way relating to or arising out of the Loan Documents or any action taken or
omitted by the Issuing Bank under the Loan Documents; provided, however, that
no Lender Party shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the Issuing Bank's gross negligence
or willful misconduct. Without limitation of the foregoing, each Lender
Party agrees to reimburse the Issuing Bank promptly upon demand for its
ratable share of any costs and expenses (including, without limitation, fees
and expenses of counsel) payable by the Borrower under Section 8.04, to the
extent that the Issuing Bank is not promptly reimbursed for such costs and
expenses by the Borrower. For purposes of this Section 7.05(b), the Lender
Parties' respective ratable shares of any amount shall be determined, at any
time, according to the sum of (a) the aggregate principal amount of the
Advances outstanding at such time and owing to the respective Lender Parties,
(b) their respective Pro Rata Shares of the aggregate Available Amount of all
Letters of Credit outstanding at such time, plus (c) their respective Unused
Working Capital Commitments at such time; provided that the aggregate
principal amount of Letter of Credit Advances owing to the Issuing Bank shall
be considered to be owed to the Working Capital Lenders ratably in accordance
with their respective Working Capital Commitments. In the event that any
Defaulted Advance shall be owing by any Defaulting Lender at any time, such
Lender Party's Commitment with respect to the Facility under which such
Defaulted Advance was required to have been made shall be considered to be
unused for purposes of this Section 7.05(b) to the extent of the amount of
such Defaulted Advance. The failure of any Lender Party to reimburse the
Issuing Bank promptly upon demand for its ratable share of any amount
required to be paid by the Lender Parties to the Issuing Bank as provided
herein shall not relieve any other Lender Party of its obligation hereunder
to reimburse the Issuing Bank for its ratable share of such amount, but no
Lender Party shall be responsible for the failure of any other Lender Party
to reimburse the Issuing Bank for such other Lender Party's ratable share of
such amount. Without prejudice to the survival of any other agreement of any
Lender Party hereunder, the agreement and obligations of each Lender Party
contained in this Section 7.05(b) shall survive the payment in full of
principal, interest and all other amounts payable hereunder and under the
other Loan Documents.
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SECTION 7.06. Successor Agents. The Administrative Agent may resign as
to any or all of the Facilities at any time by giving written notice thereof
to the Lender Parties and the Borrower and may be removed as to all of the
Facilities at any time with or without cause by the Required Lenders. Upon
any such resignation or removal, the Required Lenders shall have the right to
appoint a successor Administrative Agent as to such of the Facilities as to
which the Administrative Agent has resigned or been removed. If no successor
Administrative Agent shall have been so appointed by the Required Lenders,
and shall have accepted such appointment, within 30 days after the retiring
Administrative Agent's giving of notice of resignation or the Required
Lenders' removal of the retiring Administrative Agent, then the retiring
Administrative Agent may, on behalf of the Lender Parties, appoint a
successor Administrative Agent, which shall be a commercial bank organized
under the laws of the United States or of any State thereof and having a
combined capital and surplus of at least $250,000,000. Upon the acceptance
of any appointment as Administrative Agent hereunder by a successor
Administrative Agent as to all of the Facilities and upon the execution and
filing or recording of such financing statements, or amendments thereto, and
such amendments or supplements to the Mortgages, and such other instruments
or notices, as may be necessary or desirable, or as the Required Lenders may
request, in order to continue the perfection of the Liens granted or
purported to be granted by the Collateral Documents, such successor
Administrative Agent shall succeed to and become vested with all the rights,
powers, discretion, privileges and duties of the retiring Administrative
Agent, and the retiring Administrative Agent shall be discharged from its
duties and obligations under the Loan Documents. Upon the acceptance of any
appointment as Administrative Agent hereunder by a successor Administrative
Agent as to less than all of the Facilities and upon the execution and filing
or recording of such financing statements, or amendments thereto, and such
amendments or supplements to the Mortgages, and such other instruments or
notices, as may be necessary or desirable, or as the Required Lenders may
request, in order to continue the perfection of the Liens granted or
purported to be granted by the Collateral Documents, such successor
Administrative Agent shall succeed to and become vested with all the rights,
powers, discretion, privileges and duties of the retiring Administrative
Agent as to such Facilities, other than with respect to funds, transfers and
other similar aspects of the administration of borrowings under such
Facilities, issuance of Letters of Credit (notwithstanding any resignation as
Administrative Agent with respect to the Letter of Credit Facility) and
payments by the Borrower in respect of such Facilities, and the retiring
Administrative Agent shall be discharged from its duties and obligations
under this Agreement as to such Facilities, other than as aforesaid. After
any retiring Administrative Agent's resignation or removal hereunder as
Administrative Agent, the provisions of this Article VII 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.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc. No amendment or waiver of any provision
of this Agreement or the Notes or any other Loan Document, nor consent to any
departure by the Borrower therefrom, shall in any event be effective unless
the same shall be in writing and signed (or, in the case of the Collateral
Documents, consented to) by the Required Lenders, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that (a) no amendment, waiver or
consent shall,
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unless in writing and signed by all of the Lenders (other than any Lender
Party that is, at such time, a Defaulting Lender), do any of the following at
any time: (i) except as provided in Section 3.03, waive any of the
conditions specified in Section 3.01 or, in the case of the Initial Extension
of Credit, Section 3.02, (ii) change the number of Lenders or the percentage
of (x) the Commitments, (y) the aggregate unpaid principal amount of the
Advances or (z) the aggregate Available Amount of outstanding Letters of
Credit that, in each case, shall be required for the Lenders or any of them
to take any action hereunder, (iii) except in connection with actions
permitted by Section 5.02(d) or (e), reduce or limit the obligations of any
Subsidiary Guarantor under Section 1 of the Subsidiary Guaranty or otherwise
limit a Subsidiary Guarantor's liability with respect to the Obligations
owing to the Administrative Agent and the Lender Parties, (iv) except as
permitted by Section 5.02(e), release any material portion of the Collateral
in any transaction or series of related transactions or permit the creation,
incurrence, assumption or existence of any Lien on all or substantially all
of the Collateral in any transaction or series of related transactions to
secure any Obligations other than Obligations owing to the Secured Parties
under the Loan Documents and other than Debt owing to any other Person,
provided that, in the case of the creation, incurrence, assumption or
existence of any Lien on any material portion of the Collateral to secure
Debt owing to any other Person, (A) the Borrower shall, on the date such Debt
shall be incurred or issued, prepay the Advances pursuant to, and in the
order of priority set forth in, Section 2.06(b)(ii) in an aggregate principal
amount equal to the amount of the Net Cash Proceeds received by the Borrower
or any of its Subsidiaries to the extent required to do so under Section
2.06(b)(ii), (B) such Lien shall be subordinated to the Liens created under
the Loan Documents on terms acceptable to the Required Lenders and (C) the
Required Lenders shall otherwise permit the creation, incurrence, assumption
or existence of such Lien and, to the extent not otherwise permitted under
Section 5.02(b), of such Debt or (v) amend this Section 8.01 and (b) no
amendment, waiver or consent shall, unless in writing and signed by the
Required Lenders and each Lender that has a Commitment under the Working
Capital Facility if affected by such amendment, waiver or consent, (i)
increase the commitments of such Lender or subject such Lender to any
additional obligations, (ii) reduce the principal of, or interest on, the
Notes held by such Lender or any fees or other amounts payable hereunder to
such Lender, (iii) postpone any date fixed for any payment of principal of,
or interest on, the Notes held by such Lender or any fees or other amounts
payable hereunder to such Lender (including, without limitation, the
scheduled amortization payments set forth in Section 2.04) or (iv) waive,
amend or change the order of application of any prepayment set forth in
Section 2.06 in any manner that materially affects such Lender; provided
further that no amendment, waiver or consent shall, unless in writing and
signed by the Issuing Bank in addition to the Lenders required above to take
such action, affect the rights or obligations of the Issuing Bank, as the
case may be, under this Agreement; and provided further that no amendment,
waiver or consent shall, unless in writing and signed by the Administrative
Agent in addition to the Lenders required above to take such action, affect
the rights or duties of the Administrative Agent under this Agreement.
SECTION 8.02. Notices, Etc. All notices and other communications
provided for hereunder shall be in writing (including telegraphic, telecopy
or telex communication) and mailed, telegraphed, telecopied, telexed or
delivered, if to the Borrower, at its address at 0000 Xxx Xxxx Xxxx,
Xxxxxxxxx, Xxxxxxxxx 00000 (Telecopier No.: (000) 000-0000, Attention: X.
X. XxXxxxxx, Xx.; if to any Initial Lender or the Initial Issuing Bank, at
its Domestic Lending Office specified opposite its name on Schedule I hereto;
if to any other Lender Party, at its Domestic
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Lending Office specified in the Assignment and Acceptance pursuant to which
it became a Lender Party; and if to the Administrative Agent, at its address
at 000 Xxxxx Xxxxxx, Xxxxxxxxxxxx Xxxxxx, Xxxxxxxxx, XX 00000, Attention:
Corporate Credit Services, Ref: Shoney's; or, as to each party, at such
other address as shall be designated by such party in a written notice to the
other parties or, as to the Borrower or the Administrative Agent, at such
other address as shall be designated by such party in a written notice to the
other parties and, as to each other party, at such other address as shall be
designated by such party in a written notice to the Borrower and the
Administrative Agent. All such notices and other communications shall, when
mailed, telegraphed, telecopied or telexed, be effective three days after
being deposited in the mails, or, if sent by overnight courier, on the first
Business Day following the day of delivery to the overnight courier, or when
delivered to the telegraph company, transmitted by telecopier or confirmed by
telex answerback, respectively, except that notices and communications to the
Administrative Agent pursuant to Article II, III or VII shall not be
effective until received by the Administrative Agent. Delivery by telecopier
of an executed counterpart of any amendment or waiver of any provision of
this Agreement or the Notes or of any Exhibit hereto to be executed and
delivered hereunder shall be effective as delivery of a manually executed
counterpart thereof.
SECTION 8.03. No Waiver; Remedies. No failure on the part of any
Lender Party or the Administrative Agent to exercise, and no delay in
exercising, any right hereunder or under any Note shall operate as a waiver
thereof; nor shall any single or partial exercise of any such right preclude
any other or further exercise thereof or the exercise of any other right.
The remedies herein provided are cumulative and not exclusive of any remedies
provided by law.
SECTION 8.04. Costs, Expenses. (a) The Borrower agrees to pay on
demand (i) all reasonable costs and expenses of the Administrative Agent in
connection with the preparation, execution, delivery, administration,
modification and amendment of the Loan Documents (including, without
limitation, (A) all due diligence, collateral review, syndication,
transportation, computer, duplication, appraisal, audit, insurance,
consultant, search, filing and recording fees and expenses and (B) the
reasonable fees and expenses of counsel for the Administrative Agent with
respect thereto, with respect to advising the Administrative Agent as to its
rights and responsibilities, or the perfection, protection or preservation of
rights or interests, under the Loan Documents, with respect to negotiations
with any Loan Party or with other creditors of any Loan Party or any of its
Subsidiaries arising out of any Default or any events or circumstances that
may give rise to a Default and with respect to presenting claims in or
otherwise participating in or monitoring any bankruptcy, insolvency or other
similar proceeding involving creditors' rights generally and any proceeding
ancillary thereto) and (ii) all reasonable costs and expenses of the
Administrative Agent and the Lender Parties in connection with the
enforcement of the Loan Documents, whether in any action, suit or litigation,
any bankruptcy, insolvency or other similar proceeding affecting creditors'
rights generally (including, without limitation, the reasonable fees and
expenses of counsel for the Administrative Agent and each Lender Party with
respect thereto).
(b) The Borrower agrees to indemnify and hold harmless the
Administrative Agent, each Lender Party and each of their Affiliates and
their officers, directors, trustees, employees, agents and advisors (each, an
"Indemnified Party") from and against any and all
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claims, damages, losses, liabilities and expenses (including, without
limitation, reasonable fees and expenses of counsel) that may be incurred by
or asserted or awarded against any Indemnified Party, in each case arising
out of or in connection with or by reason of (including, without limitation,
in connection with any investigation, litigation or proceeding or preparation
of a defense in connection therewith) (i) the Facilities, the actual or
proposed use of the proceeds of the Advances or the Letters of Credit, the
Loan Documents or any of the transactions contemplated thereby, or (ii) the
actual or alleged presence of Hazardous Materials on any property of any Loan
Party or any of its Subsidiaries or any Environmental Action relating in any
way to any Loan Party or any of its Subsidiaries, except to the extent such
claim, damage, loss, liability or expense is found in a final, non-appealable
judgment by a court of competent jurisdiction to have resulted from such
Indemnified Party's gross negligence or willful misconduct. In the case of
an investigation, litigation or other proceeding to which the indemnity in
this Section 8.04(b) applies, such indemnity shall be effective whether or
not such investigation, litigation or proceeding is brought by any Loan
Party, its directors, shareholders or creditors or an Indemnified Party or
any Indemnified Party is otherwise a party thereto and whether or not the
transactions contemplated hereby are consummated. The Borrower also agrees
that no Indemnified Party shall have any liability (whether direct or
indirect, in contract or tort or otherwise) to the Borrower or any of its
Subsidiaries or Affiliates or to any security holders or creditors of the
Borrower or any of its Subsidiaries arising out of, related to or in
connection with the transactions contemplated under the Loan Documents,
except for direct, as opposed to consequential, damages determined in a final
nonappealable judgment by a court of competent jurisdiction to have resulted
from such Indemnified Party's gross negligence or willful misconduct.
(c) If any payment of principal of, or Conversion of, any Eurodollar
Rate Advance is made by the Borrower to or for the account of a Lender Party
other than on the last day of the Interest Period for such Advance, as a
result of a payment or Conversion pursuant to Section 2.09(b)(i), 2.10(a) or
2.10(d), acceleration of the maturity of the Notes pursuant to Section 6.01
or for any other reason, the Borrower shall, upon demand by such Lender Party
(with a copy of such demand to the Administrative Agent), pay to the
Administrative Agent for the account of such Lender Party any amounts
required to compensate such Lender Party for any additional losses, costs or
expenses that it may reasonably incur as a result of such payment, including,
without limitation, any loss (including loss of anticipated profits), cost or
expense incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by any Lender Party to fund or maintain such Advance.
(d) If any Loan Party fails to pay when due any costs, expenses or other
amounts payable by it under any Loan Document, including, without limitation,
fees and expenses of counsel and indemnities, such amount may be paid on
behalf of such Loan Party by the Administrative Agent or any Lender Party, in
its sole discretion.
(e) Without prejudice to the survival of any other agreement of any Loan
Party hereunder or under any other Loan Document, the agreements and
obligations of the Borrower contained in Sections 2.10 and 2.12 and this
Section 8.04 shall survive the payment in full of principal, interest and all
other amounts payable hereunder and under any of the other Loan Documents.
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SECTION 8.05. Right of Set-off. Upon (a) the occurrence and during the
continuance of any Event of Default and (b) the making of the request or the
granting of the consent specified by Section 6.01 to authorize the
Administrative Agent to declare the Notes due and payable pursuant to the
provisions of Section 6.01, each Lender Party and each of its respective
Affiliates is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and otherwise apply any and all
deposits (general or special, time or demand, provisional or final) at any
time held and other indebtedness at any time owing by such Lender Party or
such Affiliate to or for the credit or the account of the Borrower against
any and all of the Obligations of the Borrower now or hereafter existing
under this Agreement and the Note or Notes (if any) held by such Lender
Party, irrespective of whether such Lender Party shall have made any demand
under this Agreement or such Note or Notes and although such obligations may
be unmatured. Each Lender Party agrees promptly to notify the Borrower after
any such set-off and application; provided, however, that the failure to give
such notice shall not affect the validity of such set-off and application.
The rights of each Lender Party and its respective Affiliates under this
Section are in addition to other rights and remedies (including, without
limitation, other rights of set-off) that such Lender Party and its
respective Affiliates may have.
SECTION 8.06. Binding Effect. This Agreement shall become effective
when it shall have been executed by the Borrower and the Administrative Agent
and when the Administrative Agent shall have been notified by each Initial
Lender and the Initial Issuing Bank that such Initial Lender and the Initial
Issuing Bank has executed it and thereafter shall be binding upon and inure
to the benefit of the Borrower, the Administrative Agent and each Lender
Party and their respective successors and assigns, except that the Borrower
shall not have the right to assign its rights hereunder or any interest
herein without the prior written consent of the Lender Parties.
SECTION 8.07. Assignments and Participations. Each Lender may
assign to one or more Eligible Assignees all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a
portion of its Commitment or Commitments, the Advances owing to it and the
Note or Notes held by it); provided, however, that (i) each such assignment
shall be of a uniform, and not a varying, percentage of all rights and
obligations under and in respect of one or more of the Facilities, (ii)
except in the case of an assignment to a Person that, immediately prior to
such assignment, was a Lender, an Affiliate of any Lender or an Approved Fund
of any Lender or an assignment of all of a Lender's rights and obligations
under this Agreement, the amount of the Commitment of the assigning Lender
being assigned pursuant to each such assignment (determined as of the date of
the Assignment and Acceptance with respect to such assignment) shall in no
event be less than $1,000,000, (iii) each such assignment shall be to an
Eligible Assignee, (iv) no such assignments shall be permitted without the
consent of the Administrative Agent (which consent shall not be unreasonably
withheld) until the Administrative Agent shall have notified the Lender
Parties that syndication of the Commitments hereunder has been completed, and
(v) the parties to each such assignment shall execute and deliver to the
Administrative Agent, for its acceptance and recording in the Register, an
Assignment and Acceptance, together with any Note or Notes subject to such
assignment and a processing and recordation fee of $3,500.
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(b) Upon such execution, delivery, acceptance and recording, from and
after the effective date specified in such Assignment and Acceptance, (x) the
assignee thereunder shall be a party hereto and, to the extent that rights
and obligations hereunder have been assigned to it pursuant to such
Assignment and Acceptance, have the rights and obligations of a Lender or
Issuing Bank, as the case may be, hereunder and (y) the Lender or Issuing
Bank assignor thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights (other than its rights under Sections 2.10,
2.12 and 8.04 (and other similar provisions of the other Loan Documents that
are specified under the terms of such other Loan Documents to survive the
payment in full of the Obligations of the Loan Parties under or in respect of
the Loan Documents) to the extent any claim thereunder relates to an event
arising prior to such assignment) and be released from its obligations under
this Agreement (and, in the case of an Assignment and Acceptance covering all
or the remaining portion of an assigning Lender's or Issuing Bank's rights
and obligations under this Agreement, such Lender or Issuing Bank shall cease
to be a party hereto).
(c) By executing and delivering an Assignment and Acceptance, the Lender
Party assignor thereunder and the assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such assigning Lender Party makes
no representation or warranty and assumes no responsibility with respect to
any statements, warranties or representations made in or in connection with
this Agreement or any other Loan Document or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of, or the
perfection or priority of any lien or security interest created or purported
to be created under or in connection with, this Agreement or any other Loan
Document or any other instrument or document furnished pursuant hereto or
thereto; (ii) such assigning Lender Party makes no representation or warranty
and assumes no responsibility with respect to the financial condition of the
Borrower or any other Loan Party or the performance or observance by any Loan
Party of any of its obligations under any Loan Document or any other
instrument or document furnished pursuant thereto; (iii) such assignee
confirms that it has received a copy of this Agreement, together with copies
of the financial statements referred to in Section 4.01 and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance; (iv) such
assignee will, independently and without reliance upon the Administrative
Agent, such assigning Lender Party or any other Lender Party and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action
under this Agreement; (v) such assignee confirms that it is an Eligible
Assignee; (vi) such assignee appoints and authorizes the Administrative Agent
to take such action as agent on its behalf and to exercise such powers and
discretion under the Loan Documents as are delegated to the Administrative
Agent by the terms hereof, together with such powers and discretion as are
reasonably incidental thereto; and (vii) such assignee agrees that it will
perform in accordance with their terms all of the obligations which by the
terms of this Agreement are required to be performed by it as a Lender or
Issuing Bank, as the case may be.
(d) The Administrative Agent, acting for this purpose (but only for this
purpose) as the agent of the Borrower, shall maintain at its address referred
to in Section 8.02 a copy of each Assignment and Acceptance delivered to and
accepted by it and a register for the
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recordation of the names and addresses of the Lender Parties and the
Commitment of, and principal amount of the Advances owing to, each Lender
Party from time to time (the "Register"). The entries in the Register shall
be conclusive and binding for all purposes, absent manifest error, and the
Borrower, the Administrative Agent and the Lender Parties shall treat each
Person whose name is recorded in the Register as a Lender Party hereunder for
all purposes of this Agreement. The Register shall be available for
inspection by the Borrower or any Lender Party at any reasonable time and
from time to time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender Party and an assignee, together with any Note or Notes
subject to such assignment, the Administrative Agent shall, if such
Assignment and Acceptance has been completed and is in substantially the form
of Exhibit C hereto, (i) accept such Assignment and Acceptance, (ii) record
the information (the "Ownership Information") contained therein in the
Register and (iii) give prompt notice thereof to the Borrower. Any transfer
of an ownership interest in any Advance, including any right to principal or
interest payable with respect to the Advance, shall be subject to and
conditioned upon the due recordation of such transfer and the Ownership
Information with respect to the transferee in the Register and such transfer
shall be effective only upon such recordation (and not prior thereto). In
the case of any assignment by a Lender, within five Business Days after its
receipt of such notice, the Borrower, at its own expense, shall execute and
deliver to the Administrative Agent in exchange for the surrendered Note or
Notes a new Note to the order of such Eligible Assignee in an amount equal to
the Commitment assumed by it pursuant to such Assignment and Acceptance and,
if the assigning Lender has retained a Commitment hereunder, a new Note to
the order of the assigning Lender in an amount equal to the Commitment
retained by it hereunder. Such new Note or Notes shall be in an aggregate
principal amount equal to the aggregate principal amount of such surrendered
Note or Notes, shall be dated the effective date of such Assignment and
Acceptance and shall otherwise be in substantially the form of Exhibit A
hereto.
(f) The Issuing Bank may assign to an Eligible Assignee all of its
rights and obligations under the undrawn portion of its Letter of Credit
Commitment at any time; provided, however, that (i) each such assignment
shall be to an Eligible Assignee and (ii) the parties to each such assignment
shall execute and deliver to the Administrative Agent, for its acceptance and
recording in the Register, an Assignment and Acceptance, together with a
processing and recordation fee of $3,500.
(g) Each Lender Party may sell participations to one or more Persons
(other than any Loan Party or any of its Affiliates) in or to all or a
portion of its rights and obligations under this Agreement (including,
without limitation, all or a portion of its Commitments, the Advances owing
to it and the Note or Notes (if any) held by it); provided, however, that (i)
such Lender Party's obligations under this Agreement (including, without
limitation, its Commitments) shall remain unchanged, (ii) such Lender Party
shall remain solely responsible to the other parties hereto for the
performance of such obligations, (iii) such Lender Party shall remain the
holder of any such Note for all purposes of this Agreement, and (iv) the
Borrower, the Administrative Agent and the other Lender Parties shall
continue to deal solely and directly with such Lender Party in connection
with such Lender Party's rights and obligations under this Agreement and (v)
no participant under any such participation shall have any right to approve
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any amendment or waiver of any provision of any Loan Document, or any consent
to any departure by any Loan Party therefrom, except to the extent that such
amendment, waiver or consent would reduce the principal of, or interest on,
the Notes or any fees or other amounts payable hereunder, in each case to the
extent subject to such participation, postpone any date fixed for any payment
of principal of, or interest on, the Notes or any fees or other amounts
payable hereunder, in each case to the extent subject to such participation,
or release all or substantially all of the Collateral or release any of the
Subsidiary Guarantors from any of their Obligations under the Loan Documents.
(h) Any Lender Party may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this
Section 8.07, disclose to the assignee or participant or proposed assignee or
participant, any information relating to the Borrower furnished to such
Lender Party by or on behalf of the Borrower; provided, however, that, prior
to any such disclosure, the assignee or participant or proposed assignee or
participant shall agree to preserve the confidentiality of any Confidential
Information received by it from such Lender Party.
(i) Notwithstanding any other provision set forth in this Agreement, any
Lender Party may (without the consent of the Administrative Agent or the
Borrower) at any time (i) create a security interest in all or any portion of
its rights under this Agreement (including, without limitation, the Advances
owing to it and the Note or Notes held by it) in favor of any Federal Reserve
Bank in accordance with Regulation A of the Board of Governors of the Federal
Reserve System, or (ii) pledge its interest in all or any portion of its
rights under this Agreement to its trustee in support of its obligations to
such trustee.
SECTION 8.08. 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. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
SECTION 8.09. No Liability of the Issuing Bank. The Borrower assumes
all risks of the acts or omissions of any beneficiary or transferee of any
Letter of Credit with respect to its use of such Letter of Credit. Neither
the Issuing Bank nor any of its officers or directors shall be liable or
responsible for: (a) the use that may be made of any Letter of Credit or any
acts or omissions of any beneficiary or transferee in connection therewith;
(b) the validity, sufficiency or genuineness of documents, or of any
endorsement thereon, even if such documents should prove to be in any or all
respects invalid, insufficient, fraudulent or forged; (c) payment by the
Issuing Bank against presentation of documents that do not comply with the
terms of a Letter of Credit, including failure of any documents to bear any
reference or adequate reference to the Letter of Credit; or (d) any other
circumstances whatsoever in making or failing to make payment under any
Letter of Credit, except that the Borrower shall have a claim against the
Issuing Bank, and the Issuing Bank shall be liable to the Borrower, to the
extent of any direct, but not consequential, damages suffered by the Borrower
that the Borrower proves were caused by (i) the Issuing Bank's willful
misconduct or gross negligence in determining whether
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documents presented under any Letter of Credit comply with the terms of the
Letter of Credit or (ii) the Issuing Bank's willful failure to make lawful
payment under a Letter of Credit after the presentation to it of a draft and
certificates strictly complying with the terms and conditions of the Letter
of Credit. In furtherance and not in limitation of the foregoing, the
Issuing Bank may accept documents that appear on their face to be in order,
without responsibility for further investigation, regardless of any notice or
information to the contrary.
SECTION 8.10. Confidentiality. Neither the Administrative Agent nor
any Lender Party shall disclose any Confidential Information to any Person
without the consent of the Borrower, other than (a) to the Administrative
Agent's or such Lender Party's Affiliates and their officers, directors,
employees, agents and advisors and to actual or prospective Eligible
Assignees and participants, and then upon the recipient's agreement to be
bound by the terms of this Section 8.10 as if it were a Lender Party, (b) as
required by any law, rule or regulation or judicial process and (c) as
requested or required by any state, federal or foreign authority or examiner
regulating banks or banking.
SECTION 8.11. Jurisdiction, Etc. (a) Each of the parties hereto
hereby irrevocably and unconditionally submits, for itself and its property,
to the nonexclusive jurisdiction of any New York State court or federal court
of the United States of America sitting in New York City, and any appellate
court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or any of the other Loan Documents to which it is
a party, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims
in respect of any such action or proceeding may be heard and determined in
any such New York State court or, to the extent permitted by law, in such
federal court. Each of the parties hereto agrees that a final judgment in
any such action or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided
by law. Nothing in this Agreement shall affect any right that any party may
otherwise have to bring any action or proceeding relating to this Agreement
or any of the other Loan Documents in the courts of any jurisdiction.
(b) Each of the parties hereto irrevocably and unconditionally waives,
to the fullest extent it may legally and effectively do so, any objection
that it may now or hereafter have to the laying of venue of any suit, action
or proceeding arising out of or relating to this Agreement or any of the
other Loan Documents to which it is a party in any New York State or federal
court. Each of the parties hereto hereby irrevocably waives, to the fullest
extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.
SECTION 8.12. Governing Law. This Agreement and the Notes shall be
governed by, and construed in accordance with, the laws of the State of New
York.
SECTION 8.13. Designation as Senior Indebtedness. The Borrower hereby
acknowledges and agrees that its Obligations under and in respect of the Loan
Documents shall be "Designated Senior Indebtedness of the Company" for all
purposes of the Indenture (including, without limitation, Article Fourteen
thereof).
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SECTION 8.14. Waiver of Jury Trial. Each of the Borrower, the
Administrative Agent and the Lender Parties irrevocably waives all right to
trial by jury in any action, proceeding or counterclaim (whether based on
contract, tort or otherwise) arising out of or relating to any of the Loan
Documents, the Advances or the actions of the Administrative Agent or any
Lender Party in the negotiation, administration, performance or enforcement
thereof.
SECTION 8.15. Real Estate Financing. Notwithstanding anything to the
contrary set forth in this Agreement or in any of the other Loan Documents,
neither this Agreement nor any of the other Loan Documents creates any Lien
on any of the FFCA Collateral (as defined below) or in any of the membership
interests of the SPVs other than a pledge of the membership interest held by
TPI in each SPV. In the event that any of the Loan Documents create a Lien
on any of the FFCA Collateral or in any of the membership interests of the
SPVs other than the pledge of the membership interest held by TPI, such Lien
shall be null and void and of no force and effect. The Administrative Agent
and each Lender Party, by execution of this Agreement or an Assignment and
Acceptance, agrees to be bound by and subject to the terms and conditions of
this Section 8.15 and those certain Consent Agreements dated as of September
5, 2000 among the applicable SPV, the Borrower, the Administrative Agent,
FFCA Funding Corporation, a Delaware corporation ("FFCA Funding"), and FFCA
Acquisition Corporation, a Delaware corporation ("FFCA Acquisition"), as
applicable (the "Consent Agreements"). The Administrative Agent and each
Lender Party, by execution of this Agreement or an Assignment and Acceptance,
agrees that the terms and conditions of this Section 8.15 shall not be
amended, modified, supplemented or terminated without the prior written
consent of FFCA Funding and FFCA Acquisition. FFCA Funding and FFCA
Acquisition are intended third-party beneficiaries of this Section 8.15, and
the terms and conditions of this Section 8.15 shall inure to the benefit of
the successors and assigns of FFCA Funding and FFCA Acquisition. For
purposes of this Section 8.15, the term FFCA Collateral shall mean,
collectively, the "FFCA Collateral" as defined in the Consent Agreements.
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.
SHONEY'S, INC.
By /s/ X. X. XxXxxxxx, Xx.
---------------------------------
Title: V.P.-Finance
BANK OF AMERICA, N.A., as
Administrative Agent
By /s/ Xxxxxxx X. Xxxxxxxxx, Xx.
---------------------------------
Title: Managing Director
BANC OF AMERICA SECURITIES, L.L.C.,
as Syndication Agent
By /s/
---------------------------------
Title: Managing Director
INITIAL ISSUING BANK
BANK OF AMERICA, N.A.,
as Initial Issuing Bank
By /s/ Xxxxxxx X. Xxxxxxxxx, Xx.
---------------------------------
Title: Managing Director
INITIAL LENDERS
BANK OF AMERICA, N.A.
By: /s/ Xxxxxxx X. Xxxxxxxxx, Xx.
--------------------------------
Title: Managing Director
COLUMBUS BANK AND TRUST
COMPANY
By: /s/
--------------------------------
Title: S.V.P.
EXHIBITS AND SCHEDULES OMITTED DUE TO IMMATERIALITY.