$200,000,000
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
DATED AS OF
MARCH 1, 1998
AMONG
APPLE SOUTH, INC.,
AS BORROWER
WACHOVIA BANK, NATIONAL ASSOCIATION
AND
ANY OTHER BANK OR BANKS LISTED ON THE
SIGNATURE PAGE(S) HEREOF,
AS BANKS
AND
WACHOVIA BANK, NATIONAL ASSOCIATION
AS AGENT FOR THE BANKS
TABLE OF CONTENTS
Page
ARTICLE 1. DEFINITIONS........................................................1
SECTION 1.1. Definitions.............................................1
SECTION 1.2. Accounting Terms and Determinations....................13
SECTION 1.3. References.............................................14
SECTION 1.4. Use of Defined Terms...................................14
SECTION 1.5. Terminology............................................14
ARTICLE 2. THE LOAN..........................................................14
SECTION 2.1. Commitments to Make the Loan...........................14
SECTION 2.2. Method of Borrowing....................................14
SECTION 2.3. Notes..................................................14
SECTION 2.4. Maturity of Loan.......................................15
SECTION 2.5. Interest Rates.........................................15
SECTION 2.6. Fees...................................................17
SECTION 2.7. Termination and Reduction of Commitments...............17
SECTION 2.8. Optional Prepayments...................................17
SECTION 2.9. Mandatory Prepayments..................................17
SECTION 2.10. General Provisions as to Payments.....................18
SECTION 2.11. Computation of Interest and Fees. ....................18
ARTICLE 3. CONDITIONS TO BORROWING...........................................19
SECTION 3.1. Conditions to Borrowing................................19
ARTICLE 4. REPRESENTATIONS AND WARRANTIES....................................20
SECTION 4.1. Corporate Existence and Power..........................20
SECTION 4.2. Corporate and Governmental Authorization; No
Contravention..........................................20
SECTION 4.3. Binding Effect.........................................20
SECTION 4.4. Financial Information; No Material Adverse Effect......20
SECTION 4.5. No Litigation..........................................21
SECTION 4.6. Compliance with Laws Generally; Compliance with ERISA..21
SECTION 4.7. Taxes..................................................21
SECTION 4.8. Subsidiaries...........................................22
SECTION 4.9. Not a Holding Company, Public Utility, Investment
Company, Investment Adviser............................22
SECTION 4.10. Ownership of Property; Liens..........................22
SECTION 4.11. No Default............................................22
SECTION 4.12. Full Disclosure.......................................22
SECTION 4.13. Environmental Matters.................................22
SECTION 4.14. Capital Stock.........................................23
i
SECTION 4.15. Margin Stock..........................................23
SECTION 4.16. Solvency..............................................23
SECTION 4.17. Possession of Franchises, Licenses, Etc...............23
SECTION 4.18. Insurance.............................................24
ARTICLE 5. COVENANTS.........................................................24
SECTION 5.1. Information............................................24
SECTION 5.2. Inspection of Property, Books and Records..............26
SECTION 5.3. Adjusted Funded Debt/Adjusted Capitalization Ratio.....26
SECTION 5.4. Minimum Stockholders' Equity. ........................26
SECTION 5.5. Fixed Charge Coverage Ratio............................26
SECTION 5.6. Total Funded Debt/EBITDA Ratio.........................27
SECTION 5.7. Negative Pledge........................................27
SECTION 5.8. Maintenance of Existence...............................28
SECTION 5.9. Dissolution............................................28
SECTION 5.10. Consolidations, Mergers and Sales of Assets...........28
SECTION 5.11. Use of Proceeds.......................................29
SECTION 5.12. Compliance with Laws; Payment of Taxes................29
SECTION 5.13. Insurance.............................................29
SECTION 5.14. Change in Fiscal Year.................................29
SECTION 5.15. Maintenance of Property...............................29
SECTION 5.16. Environmental Notices.................................30
SECTION 5.17. Environmental Matters.................................30
SECTION 5.18. Environmental Releases................................30
SECTION 5.19. Investments...........................................30
SECTION 5.20. Subsidiary Debt.......................................32
ARTICLE 6. DEFAULTS..........................................................33
SECTION 6.1. Events of Default......................................33
SECTION 6.2. Notice of Default......................................36
ARTICLE 7. THE AGENT.........................................................36
SECTION 7.1. Appointment; Powers and Immunities.....................36
SECTION 7.2. Reliance by Agent......................................37
SECTION 7.3. Defaults...............................................37
SECTION 7.4. Rights of Agent as a Bank..............................37
SECTION 7.5. Indemnification........................................38
SECTION 7.6. Payee of Note Treated as Owner.........................38
SECTION 7.7. Nonreliance on Agent and Other Banks...................38
SECTION 7.8. Failure to Act.........................................39
SECTION 7.9. Resignation of Agent...................................39
ARTICLE 8. CHANGE IN CIRCUMSTANCES; COMPENSATION.............................39
ii
SECTION 8.1. Basis for Determining Interest Rate Inadequate or
Unfair.................................................39
SECTION 8.2. Illegality.............................................40
SECTION 8.3. Increased Cost and Reduced Return......................40
SECTION 8.4. Base Rate Loan Tranche Substituted for Affected
Euro-Dollar Rate Loan Tranche..........................41
SECTION 8.5. Replacement of a Lender................................42
SECTION 8.6. Compensation...........................................42
ARTICLE 9. MISCELLANEOUS.....................................................43
SECTION 9.1. Notices................................................43
SECTION 9.2. No Waivers.............................................43
SECTION 9.3. Expenses; Documentary Taxes............................43
SECTION 9.4. Indemnification........................................44
SECTION 9.5. Sharing of Setoffs.....................................44
SECTION 9.6. Amendments and Waivers.................................45
SECTION 9.7. No Margin Stock Collateral.............................45
SECTION 9.8. Successors and Assigns.................................46
SECTION 9.9. Confidentiality........................................47
SECTION 9.10. Representation by Banks...............................48
SECTION 9.11. Obligations Several...................................48
SECTION 9.12. GEORGIA LAW...........................................48
SECTION 9.13. Interpretation........................................48
SECTION 9.14. CONSENT TO JURISDICTION...............................49
SECTION 9.15. Counterparts..........................................49
SECTION 9.16. Survival..............................................49
SECTION 9.17. Entire Agreement; Amendment; Severability.............49
SECTION 9.18. TIME OF THE ESSENCE...................................50
SECTION 9.19. Banks Not a Joint Venturer............................50
iii
EXHIBITS
EXHIBIT A Form of Assignment and Acceptance
EXHIBIT B Form of Note
EXHIBIT C Form of Notice of Borrowing
EXHIBIT D Form of Opinion of Counsel for Borrower
EXHIBIT E Form of Closing Certificate
EXHIBIT F Form of Secretary's Certificate
EXHIBIT G Form of Compliance Certificate
SCHEDULES
SCHEDULE 4.8 Existing Subsidiaries
SCHEDULE 5.7 Existing Permitted Liens
iv
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
THIS SECOND AMENDED AND RESTATED CREDIT AGREEMENT, dated as of March 1,
1998, is made among APPLE SOUTH, INC., as Borrower; WACHOVIA BANK, NATIONAL
ASSOCIATION and any other party or parties listed as a "Bank" or the "Banks" on
the signature page(s) hereof, as Banks; and WACHOVIA BANK, NATIONAL ASSOCIATION,
as Agent for the Banks.
The parties hereto agree as follows:
ARTICLE 1. DEFINITIONS
SECTION 1.1. Definitions.
The terms as defined in this Section 1.1 shall for all purposes of this
Agreement and any amendment hereto (except as herein otherwise expressly
provided or unless the context otherwise requires), have the meanings set forth
herein:
"Adjusted Capitalization" shall be equal to the sum at any date of: (i)
Adjusted Funded Debt; plus (ii) Stockholders' Equity.
"Adjusted Funded Debt" shall mean and include the sum (without duplication)
of the following, at any date, for the Borrower and its Consolidated
Subsidiaries on a consolidated basis: (i) Total Funded Debt; plus (ii) the
present value (discounted at ten percent (10%) per annum) of the minimum amount
of noncancellable operating lease payments owing by Borrower and such Sub
sidiaries at such date (excluding, however, for this purpose, any such lease
payments owing under the DR Holdings Lease); plus (iii) the present value
(discounted at ten percent (10%) per annum) of the total payments of "Rent"
owing by the Borrower under the DR Holdings Lease for the entire remaining
"Lease Term" (inclusive of the original term and all renewal terms, whether or
not then ef fective), with the terms "Rent" and "Lease Term" as used hereinabove
having the meanings given to such terms in the DR Holdings Lease; plus (iv) all
Redeemable Preferred Stock.
"Adjusted Funded Debt/Adjusted Capitalization Ratio" shall mean the ratio
which (i) the Adjusted Funded Debt of the Borrower and its Consolidated
Subsidiaries at any date bears to (ii) the Adjusted Capitalization of the
Borrower and its Consolidated Subsidiaries at such date.
"Adjusted LIBOR Rate," applicable to any Interest Period, means that
interest rate per annum determined by the Agent to be equal to the quotient
obtained (rounded upwards, if neces sary, to the next higher 1/100th of 1%) by
dividing (i) the applicable LIBOR Rate for such Interest Period by (ii) 1.00
minus the then applicable Euro-Dollar Reserve Percentage (if any).
"Affiliate" means, as to any Person (i) any other Person that directly, or
indirectly through one or more intermediaries, controls such Person (a
"Controlling Person"), (ii) any other Per son which is controlled by or is under
common control with such Person or a Controlling Person, or (iii) any other
Person of which such Person owns, directly or indirectly, twenty percent (20%)
or more of the common stock or equivalent equity interests. As used herein, the
term "control" means possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ownership of voting securities, by contract or otherwise.
"Agent" means Wachovia Bank, National Association, a national banking
association organized under the laws of the United States of America, in its
capacity as agent for the Banks hereunder, and its successors and permitted
assigns in such capacity.
"Agent's Address" means the address of Agent referred to or specified in
Section 9.1.
"Agent's Letter Agreement" means that certain letter agreement, dated on or
prior to the Closing Date, between the Borrower and the Agent relating to
certain fees from time to time payable by the Borrower to the Agent, together
with all amendments and modifications thereto.
"Agreement" means this Second Amended and Restated Credit Agreement,
together with all amendments and modifications hereto.
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"Applebee's Spinoff" shall mean any sale or other disposition by the
Borrower of any of its ▇▇▇▇▇▇▇▇'▇ Neighborhood Grill & Bar restaurants to
▇▇▇▇▇▇▇▇'▇ International, Inc. or to other third parties, all of which sales in
the aggregate shall result in the sale or other disposition by Borrower of all,
or substantially all, of the ▇▇▇▇▇▇▇▇'▇ Neighborhood Grill & Bar restaurants
owned by Borrower for an aggregate amount of not less than Three Hundred Fifty
Million Dollars ($350,000,000), in cash, each payment of which shall be made in
full upon the closing of the final sale for such respective transaction, with
all such sales to occur as soon as practicable, but in any event on or before
April 1, 1999.
"Applicable Margin" means: (i) for any Base Rate Loan Tranche, zero percent
(0%); and (ii) for any Euro-Dollar Rate Loan Tranche, one and one-half of one
percent (1-1/2%) per annum.
"Assignee" has the meaning set forth in Section 9.8.3.
"Assignment and Acceptance" means an Assignment and Acceptance executed in
accordance with Section 9.8.3 in the form attached hereto as Exhibit A.
"Authority" has the meaning set forth in Section 8.2.
"Bank" means each bank or other financial institution listed on the
signature pages hereof and identified therein as a "Bank."
"Base Rate" means for any Base Rate Loan Tranche for any day, the rate per
annum equal to the higher as of such day of (i) the Prime Rate, and (ii)
one-half of one percent (1/2%) per annum above the Federal Funds Rate. For
purposes of determining the Base Rate for any day, changes in the Prime Rate or
the Federal Funds Rate, as the case may be, shall be effective on the date of
each such change.
"Base Rate Loan Tranche" means a Loan Tranche bearing interest at the Base
Rate pursuant to Section 2.1.
"Borrower" means Apple South, Inc., a Georgia corporation, and its
successors and permitted assigns.
"Borrowing" means a borrowing hereunder consisting of a Loan Tranche made
to the Borrower at the same time by the Banks pursuant to Article II. A
Borrowing is a "Base Rate Borrowing" if such Borrowing is a Base Rate Loan
Tranche, or a "Euro-Dollar Rate Borrowing" if such Borrowing is a Euro-Dollar
Rate Loan Tranche.
"Capital Stock" means any nonredeemable capital stock of the Borrower or
any Consolidated Subsidiary (to the extent issued to a Person other than the
Borrower), whether common or preferred.
"Capitalized Lease Obligations" shall mean those liabilities of the
Borrower and its Consolidated Subsidiaries under any leases that are required to
be capitalized for financial reporting purposes in accordance with GAAP, and the
amount of such liabilities shall be the capitalized amount of such liabilities
as determined in accordance with GAAP.
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"CERCLA" means the Comprehensive Environmental Response Compensation and
Liability Act, 42 U.S.C. ss. 9601 et seq. and its implementing regulations and
amendments.
"CERCLIS" means the Comprehensive Environmental Response Compensation and
Liability Inventory System established pursuant to CERCLA.
"Change of Law" shall have the meaning set forth in Section 8.2.
"Closing Certificate" has the meaning set forth in Section 3.1.4.
"Closing Date" means the date of this Agreement, as first inscribed
hereinabove.
"Code" means the Internal Revenue Code of 1986, as amended, or any
successor Federal tax code.
"Commitment" means, with respect to each Bank, the amount set forth
opposite the name of such Bank on the signature pages hereof, as such amount may
be reduced from time to time pursuant to Section 2.7 or Section 8.5.
"Compliance Certificate" has the meaning set forth in Section 5.1.3.
"Consolidated Net Income," for any period, means the net income of the
Borrower and its Consolidated Subsidiaries for such period, determined on a
consolidated basis in accordance with GAAP, excluding, however, (i) any
extraordinary items and (ii) any equity interest of the Borrower or any
Consolidated Subsidiary in the unremitted earnings of any Person which is not a
Subsidiary, in each case as likewise determined on a consolidated basis in
accordance with GAAP.
"Consolidated Subsidiary" means at any date any Subsidiary or other entity
the accounts of which, in accordance with GAAP, would be consolidated with those
of the Borrower in its consolidated financial statements as of such date.
"Controlled Group" means all members of a controlled group of corporations
and all trades or businesses (whether or not incorporated) under common control
which, together with the Borrower, are treated as a single employer under
Section 414 of the Code.
"Default" means any condition or event which constitutes an Event of
Default or which with the giving of notice or lapse of time or both would,
unless cured and waived, become an Event of Default.
"Default Rate" means, with respect to any Loan Tranche, on any day, the sum
of two percent (2%) per annum in excess of the interest rate otherwise then or
thereafter payable on such Loan Tranche, but, in any event, not less than two
percent (2%) per annum in excess of the Base Rate.
"Dollars" or "$" means dollars in lawful currency of the United States of
America.
"Domestic Business Day" means any day except a Saturday, Sunday or other
day on which commercial banks are not required to be open for business in the
State of Georgia.
"DR Holdings Lease" shall mean the Lease and Development Agreement, dated
as of March 2, 1995, between DR Holdings, L.P., as lessor, and the Borrower, as
lessee, together with Appendix "A" thereto and each "Lease Supplement" thereto
(as defined therein), all "Operative Documents" (as also defined therein) and
all amendments and modifications thereto made from time to time hereafter.
"EBITDA" shall mean, for any fiscal period of the Borrower and its
Consolidated Subsidiaries, that amount equal to the sum, determined in
accordance with GAAP, of the ▇▇▇▇▇▇▇ dated Net Income of the Borrower and its
Consolidated Subsidiaries for such period (considered
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without regard to any extraordinary gains or extraordinary losses), plus,
without duplication, and to the extent deducted from revenue in determining
Consolidated Net Income, depreciation and amortization expense and any other
non-cash charges for such period, interest expense for such period, and taxes
for such period.
"Environmental Authorizations" means all licenses, permits, orders,
approvals, notices, registrations or other legal prerequisites for conducting
the business of the Borrower or any Subsidiary required by any Environmental
Requirement.
"Environmental Authority" means any foreign, federal, state, local or
regional government that exercises any form of jurisdiction or authority under
any Environmental Requirement.
"Environmental Judgments and Orders" means all judgments, decrees or orders
arising from or in any way associated with any Environmental Requirements,
whether or not entered upon consent or pursuant to written agreements with an
Environmental Authority or any other entity, arising from or in any way
associated with any Environmental Requirement, whether or not incorpo rated in a
judgment, decree or order.
"Environmental Liabilities" means any liabilities whether accrued,
contingent or otherwise, arising from and in any way associated with any
Environmental Requirements.
"Environmental Notices" means notice from any Environmental Authority or by
any other Person, of possible or alleged noncompliance with or liability under
any Environmental Require ment, including, without limitation any complaints,
citations, demands or requests from any Environmental Authority or from any
other Person for correction of any violation of any Environmental Requirement or
any investigations concerning any violation of any Environmental Requirement.
"Environmental Proceedings" means any judicial or administrative
proceedings arising from or in any way associated with any Environmental
Requirement.
"Environmental Releases" means "releases" as defined in CERCLA or under any
applicable state or local environmental law or regulation.
"Environmental Requirements" means any legal requirement relating to
health, safety or the environment and applicable to the Borrower, any Subsidiary
or any Property, including, but not limited to, any such requirement under
CERCLA or similar state legislation and all federal, state and local laws,
ordinances, regulations, orders, writs, decrees and common law.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, or any successor law. Any reference to any provision
of ERISA shall also be deemed to be a reference to any successor provision or
provisions thereof.
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"Euro-Dollar Business Day" means any Domestic Business Day in which
dealings in Dollar deposits are carried out in the London interbank Euro-Dollar
market.
"Euro-Dollar Rate," applicable to any Interest Period, means that interest
rate per annum equal to the sum of (i) the Adjusted LIBOR Rate for such Interest
Period, plus (ii) the Ap plicable Margin.
"Euro-Dollar Rate Loan" means a Loan Tranche made at the Euro-Dollar Rate
pursuant to Section 2.1.
"Euro-Dollar Reserve Percentage" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Re serve System (or any successor) for
determining the maximum reserve requirement for a member bank of the Federal
Reserve System in respect of "Eurocurrency liabilities" (or in respect of any
other category of liabilities which includes deposits by reference to which the
interest rate on Euro-Dollar Rate Loans is determined or any category of
extensions of credit or other assets which includes loans by a non-United States
office of any Bank to United States residents). The Adjusted LIBOR Rate shall be
adjusted automatically on and as of the effective date of any change in the
Euro-Dollar Reserve Percentage.
"Event of Default" has the meaning set forth in Section 6.1.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upward, if necessary, to the next higher 1/100th of 1%) equal to the weighted
average of the rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Domestic Business Day
next succeeding such day, provided that (i) if the day for which such rate is to
be determined is not a Domestic Business Day, the Federal Funds Rate for such
day shall be such rate on such transactions on the next preceding Domestic
Business Day as so published on the next succeeding Domestic Business Day, and
(ii) if such rate is not so published for any day, the Federal Funds Rate for
such day shall be the average rate charged to the Agent on such day on such
transactions, as determined by the Agent.
"Fiscal Quarter" means any fiscal quarter of the Borrower.
"Fiscal Year" means any fiscal year of the Borrower.
"Fixed Charge Coverage Ratio" shall mean, for any fiscal period, the ratio
which (A) the sum of: (i) Consolidated Net Income for such period; plus (ii) the
sum (without duplication) of (a) interest expense for such period, (b) any
dividends paid in respect of Redeemable Preferred Stock during such period, and
(c) any payments made (howsoever denominated or construed) in respect of any tax
deductible, convertible preferred stock ("TECONS") or similar tax-advantaged
investment vehicles, regardless of maturity or the timing of any redemption or
repurchase rights granted in regard
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thereto (the sum of (a), (b) and (c) above being called, collectively,
"Investment Costs"); plus (iii) any provision for taxes and operating lease
expense; in each case, for the Borrower and its Consolidated Subsidiaries for
such period; bears to (B) the sum (without duplication) of: (i) all Investment
Costs; plus (ii) operating lease expense; in each case, for the Borrower and its
Consolidated Subsidiaries for the same such period; all as determined under
GAAP.
"Franchise Rights" shall mean all rights, privileges and interests of the
Borrower and its Consolidated Subsidiaries to own, operate and develop
franchised restaurants as a franchisee, whether now or hereafter existing, and
whether with respect to the operation of any "Applebee's" restaurants or
otherwise.
"GAAP" means generally accepted accounting principles applied on a basis
consistent with those which, in accordance with Section 1.2, are to be used in
making the calculations for pur poses of determining compliance with the terms
of this Agreement.
"Guarantee" or "Guaranty" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any debt or other
obligation of any other Person and, without limiting the generality of the
foregoing, any obligation, direct or indirect, contingent or otherwise, of such
Person (i) to secure, purchase or pay (or advance or supply funds for the
purchase or payment of) such debt or other obligation (whether arising by virtue
of partnership arrangements, by agreement to keep-well, to purchase assets,
goods, securities or services, to provide collateral security to take-or-pay, or
to maintain financial statement conditions or otherwise) or (ii) entered into
for the purpose of assuring in any other manner the obligee of such debt or
other obligation of the payment thereof or to protect such obligee against loss
in respect thereof (in whole or in part), provided that the term "Guarantee"
shall not include endorsements for collection or deposit in the ordinary course
of business. The terms "Guarantee" or "Guaranty" used as a verb has a
corresponding meaning.
"Hazardous Materials" includes, without limitation, (a) solid or hazardous
waste, as defined in the Resource Conservation and Recovery Act of 1980, 42
U.S.C. ss. 6901 et seq. and its implementing regulations and amendments, or in
any applicable state or local law or regulation, (b) "hazardous substance,"
"pollutant," or "contaminant" as defined in CERCLA, or in applicable state or
local law or regulation, (c) gasoline, or any other petroleum product or
by-product, including, crude oil or any fraction thereof, (d) "toxic
substances", as defined in the Toxic Substances Control Act of 1976, or in any
applicable state or local law or regulation, and (e) insecticides, fungicides,
or rodenticides, as defined in the Federal Insecticide, Fungicide, and
Rodenticide Act of 1975, or in any applicable state or local law or regulation,
as each such Act, statute or regulation may be amended from time to time.
"Interest Period" means: (1) with respect to each Euro-Dollar Rate
Borrowing, the period commencing on the date of such Borrowing and ending on the
numerically corresponding date in the first, second, third or sixth calendar
month thereafter, as the Borrower may elect in the applicable Notice of
Borrowing; provided that:
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(a) any Interest Period (other than an Interest Period determined pursuant
to paragraph (c) below) which would otherwise end on a day which is not a
Euro-Dollar Business Day shall be extended to the next succeeding Euro-Dollar
Business Day unless such Euro-Dollar Business Day falls in another calendar
month, in which case such Interest Period shall end on the next preceding
Euro-Dollar Business Day;
(b) any Interest Period which begins on the last Euro-Dollar Business Day
of a calendar month (or on a day for which there is no numerically corresponding
day in the ap propriate subsequent calendar month) shall, subject to paragraph
(c) below, end on the last Euro-Dollar Business Day of the appropriate
subsequent calendar month; and
(c) any Interest Period which begins before the Termination Date and would
otherwise end after the Termination Date shall end on the Termination Date.
(2) with respect to each Base Rate Borrowing, the period commencing on the
date of such Borrowing and ending on the date on which such Base Rate Borrowing
is fully paid or converted to a Euro-Dollar Rate Borrowing; provided that:
(a) any Interest Period (other than an Interest Period determined pursuant
to paragraph (b) below) which would otherwise end on a day which is not a
Domestic Business Day shall be extended to the next succeeding Domestic Business
Day;
(b) any Interest Period which begins before the Termination Date and would
otherwise end after the Termination Date shall end on the Termination Date.
"Lending Office" means, as to each Bank, its office located at its address
set forth on the signature pages hereof (or identified on the signature pages
hereof as its Lending Office) or such other office in the United States as such
Bank may hereafter designate as its Lending Office by notice to the Borrower and
the Agent.
"LIBOR Rate" means, for any Euro-Dollar Rate Loan for the Interest Period
of such Euro-Dollar Rate Loan, the rate per annum determined by the Agent on the
basis of the offered rate for deposits in Dollars of amounts equal or comparable
to the principal amount of such Euro-Dollar Rate Loan offered for a term
comparable to such Interest Period, which rate appears on the display designated
as page "3750" of the Telerate Service (or such other page as may replace page
3750 of that service or such other service or services as may be nominated by
the British Bankers' Association for the purpose of displaying London interbank
offered rates for U.S. dollar deposits), determined as of 11:00 A.M., London
time, two (2) Euro-Dollar Business Days prior to the first day of such In terest
Period, provided that (i) if more than one such offered rate appears on such
page, the "LIBOR Rate" will be the arithmetic average (rounded upward, if
necessary, to the next higher 1/100th of 1%) of such offered rates; (ii) if no
such offered rates appear on such page, the "LIBOR Rate" for such Interest
Period will be the arithmetic average (rounded upward, if necessary, to the next
higher 1/100th of 1%) of rates quoted by not less than two (2) major banks in
New York City, selected by
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the Agent, at approximately 10:00 A.M., New York City time, two (2) Euro-Dollar
Business Days prior to the first day of such Interest Period, for deposits in
Dollars offered to leading European banks for a period comparable to such
Interest Period in an amount comparable to the principal amount of such
Euro-Dollar Loan.
"Lien" means, with respect to any asset, any mortgage, deed to secure debt,
deed of trust, lien, pledge, charge, security interest, security title or other,
preferential arrangement, which has the practical effect of constituting a
security interest or encumbrance, or encumbrance or servitude of any kind in
respect of such asset to secure or assure payment of a debt or a Guarantee,
whether by consensual agreement or by operation of statute or other law. For
purposes of this Agreement, the Borrower or any Subsidiary shall be deemed to
own subject to a Lien any asset which it has acquired or holds subject to the
interest of a vendor or lessor under any conditional sale agreement, capital
lease or other title retention agreement relating to such asset.
"Loan" means the non-revolving loan in the principal amount of Two Hundred
Million Dollars ($200,000,000) made by the Banks to the Borrower in accordance
with, and pursuant to, Section 2.1.
"Loan Documents" means this Agreement, the Notes, any other document
evidencing or relating to the Loan, and any other document, instrument,
certificate or agreement delivered in connection with this Agreement, the Notes
or the Loan, as such documents, instruments, certificates and agreements may be
amended or modified from time to time.
"Loan Tranche" shall mean each subdivision of the Loan selected by the
Borrower for the purpose of determining the interest rate payable thereon in
accordance with, and pursuant to, Section 2.5.
"Margin Stock" means "margin stock" as defined in Regulations G, T, U or X.
"Material Adverse Effect" means, with respect to any event, act, condition
or occurrence of whatever nature (including any adverse determination in any
litigation, arbitration, or governmental investigation or proceeding), whether
singly or in conjunction with any other event or events, act or acts, condition
or conditions, occurrence or occurrences, whether or not related, that such
event or events, act or acts, condition or conditions, and/or occurrence or
occurrences results in a material adverse change in, or has a material adverse
effect upon, any of (a) the financial condition, operations, business, or
properties of Borrower and its Consolidated Subsidiaries taken as a whole, (b)
the rights and remedies of the Agent or the Banks under the Loan Documents, or
the ability of the Borrower to perform its obligations under the Loan Documents
to which it is a party, as applicable, or (c) the legality, validity or
enforceability of this Agreement, any Note or any Loan Document.
"Multiemployer Plan" shall have the meaning set forth in Section 4001(a)(3)
of ERISA.
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"Net Cash Proceeds" shall mean, the total cash proceeds received by the
Borrower from any Applebee's Spinoff, less (i) provisions for all taxes actually
paid or payable as a result thereof, (ii) any direct costs incurred by Borrower
or any Subsidiary associated therewith, (iii) any payments (including
prepayments of rent and termination charges) required to be made in such event
under the DR Holdings Lease and (iv) any payments made to repay any indebtedness
or other obligation outstanding at the time of an Applebee's Spinoff that is
secured by a Purchase Money Lien on the property or assets sold.
"New Banks" means all those Banks (if any) other than the Original Banks.
"Notes" means, collectively, the promissory notes of the Borrower
evidencing, collectively, Loan, each to be substantially in the form of Exhibit
B, together with all amendments, consolidations, modifications, renewals, and
supplements thereto.
"Notice of Borrowing" has the meaning set forth in Section 2.2.1.
"Original Banks" means those Banks party to the Original Credit Agreement
as of the Closing Date, immediately prior to this Agreement becoming effective.
"Original Commitments" means the "Commitments" (as that term is defined in
the Original Credit Agreement") of the Original Banks as in effect on the
Closing Date, immediately prior to this Agreement becoming effective.
"Original Credit Agreement" means the Amended and Restated Credit
Agreement, dated as of September 9, 1997, as amended, among Borrower, the
Original Banks, and Wachovia, as agent for the Original Banks.
"Participant" has the meaning set forth in Section 9.8.2.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Person" means an individual, a corporation, a partnership, an
unincorporated association, a trust or any other entity or organization,
including, but not limited to, a government or political subdivision or an
agency or instrumentality thereof.
"Plan" means at any time an employee pension benefit plan which is covered
by Title IV of ERISA or subject to the minimum funding standards under Section
412 of the Code and is either (i) maintained by a member of the Controlled Group
for employees of any member of the Controlled Group or (ii) maintained pursuant
to a collective bargaining agreement or any other arrangement under which more
than one employer makes contributions and to which a member of the Controlled
Group is them making or accruing an obligation to make contributions or has
within the preceding five plan years made contributions.
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"Prime Rate" refers to that interest rate so denominated and set by
Wachovia from time to time as an interest rate basis for borrowings. The Prime
Rate is but one of several interest rate bases used by Wachovia. Wachovia lends
at interest rates at, above and below the Prime Rate.
"Properties" means all property owned, leased or otherwise used, operated
or occupied by the Borrower or any Subsidiary, wherever located, and whether
real property or personal property.
"Purchase Money Liens" means Liens securing the repayment of any purchase
money debt permitted hereunder incurred to finance the purchase of any Property
hereafter acquired by the Borrower or any Consolidated Subsidiary, so long as
such Liens are limited solely to the Property so acquired, secure only the
purchase money debt so incurred and are terminated upon payment in full of such
purchase money debt.
"Redeemable Preferred Stock" of any Person means any preferred stock issued
by such Person which is at any time prior to the Termination Date either (i)
mandatorily redeemable (by sinking fund or similar payments or otherwise) or
(ii) redeemable at the option of the holder thereof.
"Regulation D" means Regulation D of the Board of Governors of the Federal
Reserve System, as in effect from time to time, together with all official
rulings and interpretations issued thereunder.
"Regulation G" means Regulation G of the Board of Governors of the Federal
Reserve System, as in effect from time to time, together with all official
rulings and interpretations issued thereunder.
"Regulation T" means Regulation T of the Board of Governors of the Federal
Reserve System, as in effect from time to time, together with all official
rulings and interpretations issued thereunder.
"Regulation U" means Regulation U of the Board of Governors of the Federal
Reserve System, as in effect from time to time, together with all official
rulings and interpretations issued thereunder.
"Regulation X" means Regulation X of the Board of Governors of the Federal
Reserve System, as in effect from time to time, together with all official
rulings and interpretations issued thereunder.
"Required Banks" means any Bank or Banks having (i) more than fifty percent
(50%) of the aggregate amount of the Commitments or (ii), if the Commitments are
no longer in effect, more than fifty percent (50%) of the aggregate outstanding
principal amount of the Notes.
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"Solvent" means as to any Person, that such Person (i) owns Property whose
fair saleable value is greater than the amount required to pay all of such
Person's total debts, direct or indirect, contingent or otherwise, (ii) is able
to pay all of such debts as and when such debts mature and (iii) has capital
sufficient to carry on the business and transactions in which it is engaged and
all business and transactions in which it is about to engage.
"Stockholders' Equity" means, at any time, the stockholders' equity of the
Borrower and its Consolidated Subsidiaries, as set forth or reflected on the
most recent consolidated balance sheet of the Borrower and its Consolidated
Subsidiaries prepared in accordance with GAAP, but excluding any Redeemable
Preferred Stock of the Borrower or any of its Consolidated Subsidiaries.
Shareholders' Equity generally would include, but not be limited to (i) the par
or stated value of all outstanding Capital Stock, (ii) capital surplus, (iii)
retained earnings, and (iv) various deductions such as (A) purchases of treasury
stock, (B) valuation allowances, (C) receivables due from an employee stock
ownership plan, and (D) employee stock ownership plan debt Guarantees.
"Subsidiary" means any corporation or other entity of which securities or
other ownership interests having ordinary voting power to elect a majority of
the board of directors or other Persons performing similar functions are at the
time directly or indirectly owned by the Borrower.
"Synthetic Lease" shall mean any agreement, or series of related
agreements, between the Borrower and one or more other parties which are
intended to be treated, for accounting purposes, as an operating lease with the
Borrower as lessee and, for tax purposes, as a financing arrangement with the
Borrower as debtor.
"Tangible Net Worth" shall mean the difference at any time between (i) the
Stockholders Equity of the Borrower and its Consolidated Subsidiaries at such
time and (ii) the sum of all those assets of the Borrower and its Consolidated
Subsidiaries at such time constituting (A) goodwill, patents, copyrights,
trademarks, trade names and other intangible assets, as determined under GAAP,
plus (B) write-ups of any assets occurring subsequent to December 31, 1996, plus
(C) unamortized debt discount and expense, as determined under GAAP, plus (D)
deferred charges, as determined under GAAP, plus (E) any indebtedness owing to
such Person by any Affiliate of such Person.
"Termination Date" has the meaning set forth in Section 2.7.1.
"Third Parties" means all lessees, sublessees, licensees and other users of
the Properties, excluding those users of the Properties in the ordinary course
of the Borrower's business and on a temporary basis.
"Total Funded Debt" shall mean that portion of the total liabilities of the
Borrower and its Consolidated Subsidiaries at any date equal to the sum (without
duplication) of: (i) all in debtedness for borrowed money at such date
(including, for this purpose, indebtedness in respect of any outstanding
bankers' acceptances); plus (ii) all Capitalized Lease Obligations outstanding
at such
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date; plus (iii) all debts, liabilities and obligations which are Guaranteed by
the Borrower or any Consolidated Subsidiary as of such date; plus (iv) all
debts, liabilities or obligations at such date to any seller incurred to pay the
deferred price of property or services having a deferred purchase price of One
Million Dollars ($1,000,000) or more, excepting, in any event, trade accounts
payable arising in the ordinary course of business and purchase options prior to
their exercise; plus (v) all debts, liabilities and obligations outstanding at
such date in respect of any Synthetic Leases, excluding therefrom, however, any
debts, liabilities or obligations under the DR Holdings Lease up to a maximum
thereof of Twenty-Eight Million Dollars ($28,000,000), it being understood and
agreed that, subject to such limitation, no debts, liabilities or obligations
(including any constituting Guaranteed Obligations) under the DR Holdings Lease
shall be included in the definition of Total Funded Debt.
"Transferee" has the meaning set forth in Section 9.8.4.
"Unfunded Vested Liabilities" means, with respect to any Plan at any time,
the amount (if any) by which (i) the present value of all vested nonforfeitable
benefits under such Plan exceeds (ii) the fair market value of all Plan assets
allocable to such benefits, all determined as of the then most recent valuation
date for such Plan, but only to the extent that such excess represents a
potential liability of a member of the Controlled Group to the PBGC or the Plan
under Title IV of ERISA.
"Voluntary Store Closing" shall mean any voluntary closing by the Borrower
or any Subsidiary of any franchised restaurant location in the ordinary course
of its business which does not cause, or result in, the forfeiture, suspension,
loss, rejection, disclaimer, impairment, curtailment, alteration of, or other
adverse effect on, any Franchise Rights with respect to the operation or
development of any other existing or future franchised restaurant location or
locations.
"Wachovia" means Wachovia Bank, National Association, a national banking
associa tion, and its successors.
SECTION 1.2. Accounting Terms and Determinations.
Unless otherwise specified herein, all terms of an accounting character
used herein shall be interpreted, all accounting determinations hereunder shall
be made, and all financial statements required to be delivered hereunder shall
be prepared in accordance with GAAP, applied on a basis consistent (except for
changes concurred with by the Borrower's independent public ac countants or
otherwise required by a change in GAAP) with the then most recent audited
consolidated financial statements of the Borrower and its Consolidated
Subsidiaries delivered to the Banks; provided, however, that upon any change in
GAAP material to Borrower occurring hereafter, the Banks shall have the right to
require either that conforming adjustments be made to any financial covenants
hereafter set forth, or the components thereof, affected by such change or that
the Borrower report its financial condition based on GAAP as in effect
immediately prior to such change occurring.
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SECTION 1.3. References.
Unless otherwise indicated, references in this Agreement to "Articles,"
"Exhibits," "Schedules," "Sections" and other Subdivisions are references to
articles, exhibits, schedules, sections and other subdivisions hereof.
SECTION 1.4. Use of Defined Terms.
All terms defined in this Agreement shall have the same defined meanings
when used in any of the other Loan Documents, unless otherwise defined therein
or unless the context shall re quire otherwise.
SECTION 1.5. Terminology.
All personal pronouns used in this Agreement, whether used in the
masculine, feminine or neuter gender, shall include all other genders; the
singular shall include the plural, and the plural shall include the singular.
Titles of Articles and Sections in this Agreement are for convenience only, and
neither limit nor amplify the provisions of this Agreement.
ARTICLE 2. THE LOAN
SECTION 2.1. Commitments to Make the Loan.
Each Bank severally agrees, to the extent of its individual Commitment, to
make the Loan to the Borrower.
SECTION 2.2. Method of Borrowing.
The Loan shall be made to the Borrower, in a single disbursement, on the
Closing Date, for the purpose described in Section 5.11.
SECTION 2.3. Notes.
2.3.1 Single Notes. That portion of the Loan allocable to each Bank shall
be evidenced by a single Note payable to the order of such Bank for the account
of its Lending Office in an amount equal to the original principal amount of
such Bank's Commitment.
2.3.2 Endorsements to Notes. Upon receipt of each Bank's Note pursuant to
Section 3.1.2, the Agent shall deliver such Note to such Bank. Each Bank may
record and, prior to any transfer of its Note shall, endorse on the schedule
forming a part thereof appropriate notations to evidence the date and amount of
each payment of principal made by the Borrower with respect thereto, and such
schedule shall constitute rebuttable presumptive evidence of the principal
amount
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owing and unpaid on such Bank's Note; provided that the failure of any Bank to
make any such recordation or endorsement shall not affect the obligation of the
Borrower hereunder or under the Notes. Each Bank is hereby irrevocably
authorized by the Borrower so to endorse its Notes and to attach to and make a
part of any Note a continuation of any such schedule as and when required.
SECTION 2.4. Maturity of Loan.
The Loan shall mature, and the principal amount thereof then outstanding
and unpaid, shall be due and payable, on the Termination Date.
SECTION 2.5. Interest Rates.
Subject to Section 8.1, the Borrower shall have the continuing right to
select the interest rate payable on the Loan, or a portion thereof, by giving
the Agent written notice (a "Notice of Borrowing"), which shall be substantially
in the form of Exhibit C, not later than 11:00 a.m. (Atlanta, Georgia time) on
the Domestic Business Day of each Base Rate Borrowing and not later than 11:00
a.m. ( Atlanta, Georgia time) at least three (3) Euro-Dollar Business Days in
the case of a Euro-Dollar Borrowing, specifying:
(a) the date of such Borrowing, which shall be a Domestic Business day in
the case of a Base Rate Borrowing or a Euro-Dollar Business Day in the case of a
Euro-Dollar Borrowing,
(b) the aggregate amount of such Borrowing, which shall be not less than
One Million Dollars ($1,000,000) or any larger multiple of Five Hundred Thousand
Dollars ($500,000), in the case of a Base Rate Loan Tranche, and in an aggregate
principal amount of Two Million Dollars ($2,000,000), or any larger multiple of
One Million Dollars ($1,000,000), in the use of a Euro-Dollar Rate Loan Tranche;
(c) whether the Borrowing is to be a Base Rate Borrowing or a Euro-Dollar
Rate Borrowing; provided, however, that not more than six (6) Euro-Dollar Rate
Borrowings may be outstanding at any given time; and
(d) the duration of the Interest Period applicable thereto, subject to the
definition of "Interest Period."
2.5.1 Base Rate Loan Tranche. Each Base Rate Loan Tranche shall bear
interest on the outstanding principal amount thereof, for the Interest Period
applicable thereto, at a rate per annum equal to the Base Rate, as it may change
from time to time during such Interest Period, plus the Applicable Margin. Such
interest shall be payable quarterly, in arrears, on the last day of each
calendar quarter, in respect of interest accrued in such month (or portion
thereof), commencing on March 31, 1998 (with the first payment date to cover the
period from the Closing Date until March 31, 1998), until maturity and
thereafter on demand. Any overdue principal of and,
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to the extent permitted by applicable law, overdue interest on any Base Rate
Loan Tranche shall bear interest, payable on demand, for each day until paid at
a rate per annum equal to the Default Rate.
2.5.2 Euro-Dollar Rate Loan Tranche. Each Euro-Dollar Rate Loan Tranche
shall bear interest on the outstanding principal amount thereof, for the
Interest Period applicable thereto, at the Euro-Dollar Rate for such Interest
Period. Such interest shall be payable for each Interest Period on the last day
thereof; provided, however, if any Interest Period is for a period of more than
three (3) months, accrued interest shall also be due and payable at the end of
each consecutive three (3) month period within such Interest Period, commencing
with the first day thereof, as well as on the last day thereof. Any overdue
principal of and, to the extent permitted by law, overdue interest on any
Euro-Dollar Rate Loan Tranche shall bear interest, payable on demand, for each
day until paid at a rate per annum equal to the Default Rate; provided that the
mere application of the Default Rate to any Euro-Dollar Rate Loan Tranche shall
not give rise to the breakage of an Interest Period, but only an increased
margin applicable thereto.
2.5.3 Agent to Determine. The Agent shall determine each interest rate ap
plicable to the Loan hereunder. The Agent shall give prompt notice to the
Borrower and the Banks by telecopier of each rate of interest so determined, if
so requested to do so, and its determination thereof shall be conclusive in the
absence of manifest error.
2.5.4 Savings Clause. In no contingency or event whatsoever, whether by
reason of advancement of the proceeds hereof or otherwise, shall the amount paid
or agreed to be paid to the Banks for the use, forbearance or detention of money
advanced hereunder exceed the highest lawful rate permissible under any law
which a court of competent jurisdiction may deem applicable hereto. In the event
that such a court determines that any Bank has charged or received interest
hereunder in excess of the highest applicable rate, such rate shall
automatically be reduced to the maximum rate permitted by applicable law and
such Bank shall promptly refund to the Borrower any interest received by such
Bank in excess of the maximum lawful rate or, if so requested by the Borrower,
shall apply such excess to the principal balance of that Bank's Note. It is the
intent hereof that the Borrower not pay or contract to pay, and that the Banks
not receive or contract to receive, directly or indirectly in any manner
whatsoever, interest in excess of that which may be paid by the Borrower under
applicable law.
2.5.5 Rollover of Existing Loans. If, and to the extent that, on the
Closing Date, there exists any outstanding indebtedness of the Borrower under
the Original Credit Agreement, then, such indebtedness shall be deemed "rolled
over" to each Bank's account under this Agreement for the remainder of the
Interest Period(s) thereon in order to avoid the imposition of any prepayment
premium, fee or charge, notwithstanding any other term of this Agreement which
may be to the contrary.
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SECTION 2.6. Fees.
2.6.1 Upfront Fee. The Borrower shall pay to the Agent for the account of
each Bank on the Closing Date a fully earned, non-refundable upfront fee, the
amount of which shall be equal to twenty-five thousandths of one percent
(0.025%) of its respective Commitment.
2.6.2 Other Fees. The Borrower shall pay to the Agent, for the account and
sole benefit of the Agent, such fees and other amounts at such times as set
forth in the Agent's Letter Agreement.
SECTION 2.7. Termination and Reduction of Commitments. The Commitments
shall terminate on April 1, 1999 (the "Termination Date"), and any portion of
the Loan then outstanding (together with accrued interest thereon) shall be due
and payable, in full, on such date. In addition to the foregoing, the
Commitments shall reduce, dollar-for-dollar, at the time of any optional or
mandatory prepayment of the Loan, by an amount equal to the amount of such
prepayment, which reduction shall be allocated ratably among the Banks, and
shall reduce to zero on that date on which the Loan is paid in full, if sooner
prepaid pursuant hereto.
SECTION 2.8. Optional Prepayments.
The Borrower may, on any Business Day, upon giving notice to the Agent by
not later than 11:00 A.M. (Atlanta, Georgia time) on such Business Day, and
making payment to the Agent, for the ratable benefit of the Banks, on such
Business Day of any compensation required by Section 8.6, prepay any Borrowing
in whole at any time, or from time to time in part in amounts aggregating at
least One Million Dollars ($1,000,000) and integral multiples of Five Hundred
Thousand Dollars ($500,000), by paying the principal amount to be prepaid
together with accrued interest thereon to the date of prepayment. Each such
optional prepayment shall be applied to prepay ratably the Loan Tranche included
in such Borrowing. Upon receipt of a notice of prepayment pursuant to this Sec
tion 2.8, the Agent shall promptly notify each Bank of the contents thereof and
of such Bank's ratable share of such prepayment and such notice shall not
thereafter be revocable by the Borrower.
SECTION 2.9. Mandatory Prepayments.
On each date on which any Applebee's Spinoff shall occur, the Borrower
shall prepay the Loan by an amount equal to the entire Net Cash Proceeds
therefrom; provided, however, that if, in so doing, the Borrower would incur any
costs under Section 8.6 below, then, Borrower shall have the option to delay the
date by which such prepayment of the Loan shall occur, subject, however, to the
following conditions: (i) the Borrower shall specify in its notice of such
Applebee's Spinoff required under Section 5.10 below the date on which actual
prepayment of the Loan shall, instead, occur, which must be not later than the
earlier of: (A) the Termination Date or (B) ninety (90) days after the date on
which such Applebee's Spinoff actually occurs; (ii) the Borrower shall deliver
to the Agent on the date on which such Applebee's Spinoff occurs the entire Net
Cash Proceeds therefrom, to be held thereafter by the Agent in a deposit account
in its name as Agent as cash collateral for the
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payment of the Loan (the "Cash Collateral Account"); (iii) the Borrower shall
have no right to make withdrawals from the Cash Collateral Account and Wachovia
shall have no right to exercise any set off against the Cash Collateral Account
except in its capacity as Agent for the benefit of the Banks; (iv) the Agent
shall pay the Borrower, by crediting same to such deposit account, interest at
the rate then being currently paid by Wachovia for deposits of like tenor and
amount, for any sums on deposit in the Cash Collateral Account until withdrawal
thereof; and (v) the Agent is hereby authorized and empowered, on the date
specified by the Borrower for prepayment of the Loan in accordance with the
requirements set forth above or, sooner, if any Event of Default has occurred
which is then continuing, to apply from funds then on deposit in the Cash
Collateral Account an amount equal to the Net Cash Proceeds deposited therein
for each affected Applebee's Spinoff for prepayment to the Loan,and any
remaining funds then on deposit in the Cash Collateral Account, representing
earned interest, shall be returned to the Borrower or, if any Event of Default
has occurred which is then continuing, continued to be held by the Agent as cash
collateral for the Loan. Each such mandatory prepayment shall be applied, when
made, to prepay the Loan ratably among the Banks.
SECTION 2.10. General Provisions as to Payments.
2.10.1 Timing. The Borrower shall make each payment of principal of, and
interest on, the Loan and of fees and any other sums owing hereunder, not later
than 11:00 A.M. (Atlanta, Georgia time) on the date when due, in federal or
other funds immediately available in Atlanta, Georgia, to the Agent's Address.
The Agent will promptly distribute to each Bank its ratable share of each such
payment received by the Agent for the account of the Banks.
2.10.2 Next Banking Day. Whenever any payment of principal of, or interest
on, the Loan or of any fee or other sum owing hereunder shall be due on a day
which is not a Domestic Business Day, the date for payment thereof shall be
extended to the next succeeding Domestic Business Day. Whenever any payment of
principal of, or interest on, any Euro-Dollar Rate Loan Tranche shall be due on
a day which is not a Euro-Dollar Business Day, the date for payment thereof
shall be extended to the next succeeding Euro-Dollar Business Day unless such
Euro-Dollar Business Day falls in another calendar month, in which case the date
for payment thereof shall be the next preceding Euro-Dollar Business Day.
SECTION 2.11. Computation of Interest and Fees.
Interest on the Loan shall be computed on the basis of a year of 360 days
and paid for the actual number of days elapsed, calculated as to each Interest
Period from and including the first day thereof to but excluding the last day
thereof. Any fees or other sums payable hereunder on a per annum basis shall be
computed on the basis of a year of 360 days and paid for the actual number of
days elapsed (including the first day but excluding the last day).
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ARTICLE 3. CONDITIONS TO BORROWING
SECTION 3.1. Conditions to Borrowing.
The obligation of each Bank to make its allocable share of the Loan
available to the Borrower on the Closing Date is subject to receipt by the Agent
of the following in a sufficient number of counterparts (except as to the Notes)
for delivery of a counterpart to each Bank and retention of one counterpart by
the Agent):
3.1.1 This Agreement. From each of the parties hereto of either (i) a duly
executed counterpart of this Agreement signed by such party or (ii) a facsimile
transmission stating that such party has duly executed a counterpart of this
Agreement and sent such counterpart to the Agent;
3.1.2 Notes. A duly executed Note for the account of each Bank complying
with the provisions of Section 2.3;
3.1.3 Opinion. An opinion (together with any opinions of local counsel
relied on therein) of legal counsel for the Borrower, dated as of the Closing
Date, substantially in the form of Exhibit D and covering such additional
matters relating to the transactions contemplated hereby as the Agent or any
Bank may reasonably request;
3.1.4 Closing Certificate. A certificate ("Closing Certificate"), dated as
of the Closing Date, substantially in the form of Exhibit E, signed by the chief
financial officer of the Borrower, to the effect that (i) no Default has
occurred and is continuing on the date of the first Borrowing and (ii) the
representations and warranties of the Borrower contained in Article 4 are true
on and as of the Closing Date;
3.1.5 Other Documents. All documents which the Agent or any Bank may
reasonably request relating to the existence of the Borrower, the corporate
authority for and the validity of this Agreement, the Notes and the other Loan
Documents, and any other matters relevant hereto, all in form and substance
satisfactory to the Agent, including, without limitation, a certificate of
incumbency of the Borrower, signed by the Secretary or an Assistant Secretary of
the Borrower, in substantially the form of Exhibit F, certifying as to the
names, true signatures and incumbency of the officer or officers of the Borrower
authorized to execute and deliver the Loan Documents, and certified copies of
the following items: (i) the Borrower's Articles of Incorporation, (ii) the
Borrower's Bylaws, (iii) a certificate of the Secretary of State of the State of
Georgia as to the good standing of the Borrower in the State of Georgia, and
(iv) the action taken by the Board of Directors of the Borrower authorizing the
Borrower's execution, delivery and performance of this Agreement, the Notes and
the other Loan Documents to which the Borrower is a party;
3.1.6 Borrowing Notice. The initial Notice of Borrowing.
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ARTICLE 4. REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants that:
SECTION 4.1. Corporate Existence and Power.
Each of the Borrower and each Subsidiary is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation, is duly qualified to transact business in every jurisdiction
where, by the nature of its business, such qualification is necessary, and has
all corporate powers and all governmental licenses, authorizations, consents and
approvals required to carry on its business as now conducted, except where the
failure to so qualify, or obtain such licenses, authorizations, consents or
approvals could not be reasonably expected to have or cause a Material Adverse
Effect.
SECTION 4.2. Corporate and Governmental Authorization; No Contravention.
The execution, delivery and performance by the Borrower of this Agreement,
the Notes and the other Loan Documents (i) are within the Borrower's corporate
powers, (ii) have been duly authorized by all necessary corporate action, (iii)
require no action by or in respect of or filing with, any governmental body,
agency or official, (iv) do not contravene, or constitute a default under, any
provision of applicable law or regulation or of the articles of incorporation or
by-laws of the Borrower or, to the best of the Borrower's knowledge, of any
material agreement, judgment, injunction, order, decree or other instrument
binding upon the Borrower or any of its Subsidiaries, and (v) do not result in
the creation or imposition of any Lien on any asset of the Borrower or any of
its Subsidiaries.
SECTION 4.3. Binding Effect.
This Agreement constitutes a valid and binding agreement of the Borrower
enforceable in accordance with its terms, and the Notes and the other Loan
Documents, when executed and delivered in accordance with this Agreement, will
constitute valid and binding obligations of the Bor rower enforceable in
accordance with their respective terms, provided that the enforceability hereof
and thereof is subject in each case to general principles of equity and to
bankruptcy, insolvency and similar laws affecting the enforcement of creditors'
rights generally.
SECTION 4.4. Financial Information; No Material Adverse Effect.
The audited balance sheet of the Borrower and its Consolidated Subsidiaries
as of the Fiscal Year ended closest to December 31, 1996, and the related
consolidated audited statements of income, shareholders' equity and cash flows
of the Borrower and its Consolidated Subsidiaries for the Fiscal Year then
ended, and the unaudited financial statements of the Borrower and its
Consolidated Subsidiaries as of and for the Fiscal Quarter ended closest to
December 31, 1997, copies of which have been delivered to each of the Banks,
fairly present, in conformity with GAAP,
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the financial position of the Borrower and its Consolidated Subsidiaries as of
such dates and the results of its operations and cash flow for such periods
stated; provided, that, (i) the interim statements remain subject to normal
year-end audit adjustments and (ii) during the term of this Agreement after the
Closing Date, future representations as to the matters set forth in this
sentence shall be deemed to refer to the most recent financial statements
delivered pursuant to Sections 5.1.1 and 5.1.2. Since December 31, 1996, there
has been no event, act, condition or occurrence having or which could be
expected to have a Material Adverse Effect, except for matters disclosed in the
quarterly financial statements referred to above; provided that during the term
of this Agreement following the Closing Date, future representations as to
matters set forth in this sentence shall be deemed to refer to the last day of
the most recent audited financial statements delivered by the Bor rower pursuant
to Section 5.1.1.
SECTION 4.5. No Litigation.
There is no action, suit or proceeding pending, or to the knowledge of the
Borrower threatened, against or affecting the Borrower or any of its
Subsidiaries before any court or arbitrator or any governmental body, agency or
official which could have a Material Adverse Effect or which in any manner draws
into question the validity of, or could impair the ability of the Borrower to
perform its obligations under, this Agreement, the Notes or any of the other
Loan Documents.
SECTION 4.6. Compliance with Laws Generally; Compliance with ERISA.
The Borrower and each Subsidiary are in compliance in all material respects
with applicable laws (including, but not limited to, ERISA), regulations and
similar requirements of gov ernmental authorities (including, but not limited
to, PBGC), noncompliance with which could have or cause a Material Adverse
Effect, except where the necessity of such compliance is being contested in good
faith through appropriate proceedings. To the best of the Borrower's knowledge,
(i) the Bor rower and each member of the Controlled Group have fulfilled their
respective obligations under the minimum funding standards of ERISA and the Code
with respect to each Plan and are in compliance in all material respects with
the presently applicable provisions of ERISA and the Code, and have not incurred
any liability to the PBGC or a Plan under Title IV of ERISA; and (ii) neither
the Borrower nor any member of the Controlled Group is or ever has been
obligated to contribute to any Multiemployer Plan.
SECTION 4.7. Taxes.
There have been filed on behalf of the Borrower and its Subsidiaries all
federal, state and local income, excise, property and other tax returns which
are required to be filed by them and all taxes due pursuant to such returns or
pursuant to any assessment received by or on behalf of the Borrower or any
Subsidiary have been paid, except for amounts that either are immaterial or are
being disputed in good faith and by appropriate proceedings. The charges,
accruals and reserves on the books of the Borrower and its Subsidiaries in
respect of taxes or other governmental charges are, in the opinion of the
Borrower, adequate.
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SECTION 4.8. Subsidiaries.
As of the Closing Date, the Borrower has no Subsidiaries, except for the
Subsidiaries set forth on Schedule 4.8, all of which are Consolidated
Subsidiaries.
SECTION 4.9. Not a Holding Company, Public Utility, Investment
Company, Investment Adviser.
Neither the Borrower nor any Subsidiary is a "holding company," or a
"subsidiary company" of a "holding company," or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company," or a "public
utility," within the meaning of the Public Utility Holding Company Act of 1935,
as amended; or a "public utility" within the meaning of the Federal Power Act,
as amended; or an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended; or an "investment adviser" within the meaning of the Investment
Advisers Act of 1940, as amended.
SECTION 4.10. Ownership of Property; Liens.
The Borrower owns Properties, or interests in Properties, sufficient for
the conduct of its business; and none of such Properties is subject to any Lien
except as permitted in Section 5.8.
SECTION 4.11. No Default.
Neither the Borrower nor any of its Subsidiaries is in default under or
with respect to any agreement, instrument or undertaking to which it is a party
or by which it or any of its property is bound which could have or cause a
Material Adverse Effect. No Default has occurred and is con tinuing.
SECTION 4.12. Full Disclosure.
All written information and, to the best of the Borrower's knowledge, all
other information, heretofore furnished by the Borrower to the Agent or any Bank
for purposes of or in connection with this Agreement or any transaction
contemplated hereby is, and all such information hereafter furnished by the
Borrower to the Agent or any Bank will be, true, accurate and complete in every
material respect or based on reasonable estimates on the date as of which such
information is stated or certified. The Borrower has disclosed to the Banks in
writing any and all facts which could reasonably be expected to have or cause a
Material Adverse Effect.
SECTION 4.13. Environmental Matters.
To the best of the Borrower's knowledge, (i) neither the Borrower nor any
Subsidiary is subject to any Environmental Liability which could have or cause a
Material Adverse Effect and neither the Borrower nor any Subsidiary has been
designated as a potentially responsible party under
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CERCLA or under any state statute similar to CERCLA. None of the Properties
located in the United States, owned by either the Borrower or a Subsidiary, has
been identified on any current or proposed (A) National Priorities List under 40
C.F.R. ss. 300, (B) CERCLIS list or (C) any list arising from a state statute
similar to CERCLA; (ii) to the best of the Borrower's knowledge, no Hazardous
Materials have been or are being used, produced, manufactured, processed,
treated, recycled, gener ated, stored, disposed of, managed or otherwise handled
at, or shipped or transported to or from the Properties or are otherwise present
at, in or under the Properties, owned or operated by either the Borrower or a
Subsidiary, or, to the best of the knowledge of the Borrower, at or from any
adjacent site or facility, except for Hazardous Materials, such as cleaning
solvents, pesticides and other materi als used, produced, manufactured,
processed, treated, recycled, generated, stored, disposed of, managed, or
otherwise handled in the ordinary course of business in compliance with all
applicable Environmental Requirements; and (iii) to the best of the Borrower's
knowledge, the Borrower and its Subsidiaries are in compliance with all
Environmental Requirements in connection with the ownership, use and operation
of the Properties and the Borrower's and such Subsidiary's respective
businesses.
SECTION 4.14. Capital Stock.
All Capital Stock, debentures, bonds, notes and all other securities of the
Borrower and its Subsidiaries presently issued and outstanding are validly and
properly issued in accordance with all applicable laws, including but not
limited to, the "Blue Sky" laws of all applicable states and the federal
securities laws.
SECTION 4.15. Margin Stock.
Neither the Borrower nor any of its Subsidiaries is engaged principally, or
as one of its important activities, in the business of purchasing or carrying
any Margin Stock, and no part of the proceeds of the Loan 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, or be used for any purpose which
violates, or which is inconsistent with the provisions of, Regulations G, T, U
or X.
SECTION 4.16. Solvency.
After giving effect to the execution and delivery of the Loan Documents and
the making of the Loan, the Borrower will be Solvent.
SECTION 4.17. Possession of Franchises, Licenses, Etc.
The Borrower and its Subsidiaries possess to the extent material all
franchises, certificates, licenses, permits and other authorizations from
governmental and political subdivisions or regulatory authorities, and all
patents, trademarks, service marks, trade names, copyrights, franchises,
licenses and other rights that are necessary for ownership, maintenance and
operation of any of their respective material Properties and assets, and neither
the Borrower nor any of its
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Subsidiaries is in violation of any thereof, which, individually or in the
aggregate, would or might have or cause a Material Adverse Effect. Without
limiting the generality of the foregoing, and, in any event, the Borrower and
its Subsidiaries possess all Franchise Rights necessary for the ownership,
operation and development of its (or their) franchised restaurant business as
conducted, or contemplated to be conducted, by the Borrower and such
Subsidiaries, including, without limitation, in the case of "Applebee's"
restaurants, franchise agreements for each franchised restaurant location and
exclusive development rights for each designated area in which franchised
restaurants are located or contemplated to be located.
SECTION 4.18. Insurance.
The Borrower and each of its Subsidiaries maintains adequate insurance on,
and in respect of the ownership and operation of, its Properties in at least
such amounts and against at least such risks as are usually insured against in
the same general area by companies of established repute engaged in the same or
similar business.
ARTICLE 5. COVENANTS
The Borrower agrees that, so long as any Bank has any Commitment hereunder
or any amount payable hereunder or under any Note remains unpaid:
SECTION 5.1. Information.
The Borrower will deliver to each of the Banks:
5.1.1 Annual Audit. As soon as available and in any event within ninety
(90) days after the end of each Fiscal Year, a consolidated balance sheet of the
Borrower and its Con solidated Subsidiaries as of the end of such Fiscal Year
and the related consolidated statements of income, shareholders' equity and cash
flows for such Fiscal Year, setting forth in each case in comparative form the
figures for the previous fiscal year, all certified by independent public
accountants of nationally recognized standing, with such certification to be
free of any material exceptions and qualifications; provided that, the
information required by this paragraph may be satis fied by delivery of
information pursuant to Section 5.1.5 or Section 5.1.6;
5.1.2 Interim Statements. As soon as available and in any event within
fifty (50) days after the end of each of the first three (3) Fiscal Quarters of
each Fiscal Year, a con solidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of the end of such Fiscal Quarter and the related
statement of income and statement of cash flows for such quarter and for the
portion of the Fiscal Year ended at the end of such quarter, setting forth in
each case in comparative form the figures for the corresponding quarter and the
corresponding portion of the previous Fiscal Year, all certified (subject to
normal year-end adjustments) as to fairness of presentation, GAAP and
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consistency by the chief financial officer of the Borrower; provided that the
information required by this paragraph may be satisfied by delivery of
information pursuant to Section 5.1.5 or Section 5.1.6;
5.1.3 Compliance Certificates. Simultaneously with the delivery of each set
of financial statements referred to in Sections 5.1.1 and 5.1.2, a certificate,
substantially in the form of Exhibit G (a "Compliance Certificate"), of the
chief financial officer of the Borrower (i) setting forth in reasonable detail
the calculations required to establish (A) the then effective "Applicable
Margin" for Euro-Dollar Rate Loans, (B) the then effective "Applicable Rate" for
commitment fees and (C) whether the Borrower was in compliance with the
requirements of Sections 5.3, 5.4, 5.5, 5.6 and 5.19 on the date of such
financial statements and (ii) stating whether any Default exists on the date of
such certificate and, if any Default then exists, setting forth the details
thereof and the action which the Borrower is taking or proposes to take with
respect thereto;
5.1.4 Default Notice. Promptly (and, in any event, within five (5) Domestic
Business Days) after the Borrower becomes aware of the occurrence of any
Default, a certificate of the chief financial officer of the Borrower setting
forth the details thereof and the action which the Borrower is taking or
proposes to take with respect thereto;
5.1.5 Proxy. Promptly upon the mailing thereof to the shareholders of the
Borrower generally, copies of all financial statements, reports and proxy
statements so mailed;
5.1.6 Registration Statements. Promptly upon the filing thereof, copies of
all registration statements and annual, quarterly or monthly reports which the
Borrower shall have filed with the Securities and Exchange Commission;
5.1.7 ERISA Notices. If and when any member of the Controlled Group (i)
gives or is required to give notice to the PBGC of any reportable event (as
defined in Section 4043 of ERISA) with respect to any Plan which might
constitute grounds for a termination of such Plan under Title IV of ERISA, or
knows that the plan administrator of any Plan has given or is required to give
notice of any such reportable event, a copy of the notice of such reportable
event given or required to be given to the PBGC; (ii) receives notice of
complete or partial withdrawal liability under Title IV of ERISA, a copy of such
notice; or (iii) receives notice from the PBGC under Title IV of ERISA of an
intent to terminate or appoint a trustee to administer any Plan, a copy of such
notice; and
5.1.8 Other Reports. From time to time such additional information
regarding the financial position or business of the Borrower and its
Subsidiaries as the Agent, at the request of any Bank, may reasonably request.
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SECTION 5.2. Inspection of Property, Books and Records.
The Borrower will keep, and require each Subsidiary to keep, proper books
of record and account in which full, true and correct entries in conformity with
GAAP (or, in the case of any non-domestic Subsidiary, such other accounting
standards, rules, regulations and practices applicable to businesses operating
in the locality in which each such Person operates); and permit, and cause each
Subsidiary to permit, representatives of any Bank at such Bank's expense prior
to the occurrence of a Default and at the Borrower's expense after the
occurrence and during the continuance of a Default to visit and inspect any of
their respective properties, to examine and make abstracts from any of their
respective books and records and to discuss their respective affairs, finances
and accounts with their respective officers, employees and independent public
accountants. The Borrower agrees to cooperate and assist in such visits and
inspections in each case at such reasonable times and as often as may reasonably
be desired.
SECTION 5.3. Adjusted Funded Debt/Adjusted Capitalization Ratio.
The Adjusted Funded Debt/Adjusted Capitalization Ratio will not at any time
exceed .65:1.
SECTION 5.4. Minimum Stockholders' Equity.
Stockholders' Equity will at no time be less than the sum of (i)
$180,000,000, as of the Fiscal Quarter ended closest to December 31, 1996 (the
"Base Fiscal Quarter"), plus (ii) fifty percent (50%) of Consolidated Net Income
(if positive) for each Fiscal Quarter subsequent to the Base Fiscal Quarter;
plus, without duplication, (iii) seventy-five percent (75%) of any net proceeds
received by Borrower from any offering of equity securities (other than
Redeemable Preferred Stock) by Borrower subsequent to the Closing Date; plus,
without duplication, (iv) seventy-five percent (75%) of any net proceeds
received by Borrower from any conversion of debt into equity subsequent to the
Closing Date; plus, without duplication, (v) seventy-five percent (75%) of any
adjustment to equity due to any pooling of interests occurring subsequent to
December 31, 1996; plus, without duplication, (vi) seventy-five percent (75%) of
any increase in Stockholders' Equity resulting from the issuance or exchange of
any equity securities in furtherance of any acquisition constituting a permitted
investment under Section 5.19.
SECTION 5.5. Fixed Charge Coverage Ratio.
Borrower's Fixed Charge Coverage Ratio, measured on a rolling four (4)
Fiscal Quar ters' basis as of the end of each Fiscal Quarter, commencing with
the Fiscal Quarter ended closest to December 31, 1997, shall be (i) not less
than 1.80:1, for the Fiscal Quarters ending closest to December 31, 1997, March
31, 1998 and June 30, 1998, (ii) not less than 1.90:1, for the Fiscal Quarter
ending closest to September 30, 1998; and (iii) not less than 2.00:1, for each
Fiscal Quarter ending thereafter.
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SECTION 5.6. Total Funded Debt/EBITDA Ratio.
The ratio which (i) the Total Funded Debt of the Borrower and its
Consolidated Subsidiaries at the end of any Fiscal Quarter, commencing with the
Fiscal Quarter ended closest to December 31, 1997, bears to (ii) the EBITDA of
the Borrower and its Consolidated Subsidiaries, measured on a rolling four (4)
Fiscal Quarters' basis as of the end of such Fiscal Quarter, shall be (i) not
more than 3.80:1, for the Fiscal Quarters ending closest to December 31, 1997
and closest to March 31, 1998, and (ii) not more than 3.50:1, for each Fiscal
Quarter ending thereafter. In computing EBITDA in respect of the foregoing
ratio, (a) any asset or stock dispositions by the Borrower consisting of the
sale of a business line, segment or other group of related stores (including,
particularly, for this purpose, the Applebee's Spinoff) occurring within a
Fiscal Quarter shall be accounted for by reducing EBITDA by the individual
EBITDA attributable to each store within such group for such Fiscal Quarter and
the three (3) preceding Fiscal Quarters; and (b) any asset or stock acquisitions
by the Borrower consisting of the purchase of a business, line, segment or other
group of related stores occurring within a Fiscal Quarter shall be accounted for
by increasing EBITDA by the individual EBITDA attributable to each store within
such group for such Fiscal Quarter and for the three (3) preceding Fiscal
Quarters; in each instance, on an historical basis, in a manner which Borrower
shall determine, but subject to prior review with, and approval by, the Agent.
SECTION 5.7. Negative Pledge.
The Borrower will not, nor will the Borrower permit any Subsidiary to,
create, assume or suffer to exist any Lien on any asset now owned or hereafter
acquired by it, except: (i) those Liens, if any, described on Schedule 5.7,
concerning existing debt of the Borrower, to be set forth and described more
particularly therein, together with any Lien arising out of the refinancing,
extension, renewal or refunding of any debt secured by any such Lien, provided
that such debt is not secured by any additional assets, and the amount of such
debt secured by any such Lien is not increased; (ii) Liens incidental to the
conduct of its business or the ownership of its Properties which (A) do not
secure debt and (B) do not in the aggregate materially detract from the value of
its Properties or materially impair the use thereof or the operation of its
business, including, without limitation, easements, rights of way, restrictive
covenants, zoning and other similar restrictions on real property; (iii)
materialmen's mechanics', warehousemen's carriers', landlords' and other similar
statutory Liens which secure debt or other obligations that are not past due,
or, if past due are being contested in good faith by the Borrower or the
appropriate Subsidiary by appropriate proceedings; (iv) Liens for taxes not
delinquent or taxes being contested in good faith and by appropriate
proceedings; (v) pledges or deposits in connection with worker's compensation,
unemployment insurance and other social security legislation; (vi) deposits to
secure performance of bids, trade contracts, leases, statutory obligations (to
the extent not excepted elsewhere herein); (vii) grants of security and rights
of setoff in accounts, securities and other properties held at banks or
financial institutions to secure the payment or reimbursement under overdraft,
letter of credit, acceptance and other credit facilities; (viii) rights of
setoff, banker's liens and other similar rights arising solely by operation of
law; (ix) Pur chase Money Liens; (x) Liens on any Properties acquired by
Borrower or any Subsidiary subsequent to the Closing Date, to the extent that
(A) such Liens are existing at the time of acquisition, (B) the
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debt secured thereby is not secured by any other Properties of Borrower or such
Subsidiary except the acquired Properties, (C) the amount of such debt so
secured thereby is not increased at or subse quent to the acquisition and (D)
the total amount of all such debt secured by all such acquired Properties does
not exceed at any time, in aggregate amount, fifteen percent (15%) of Tangible
Net Worth; together with any Lien arising out of the refinancing, extension,
renewal or refunding of any debt secured by any such Lien, provided that such
debt is not secured by any additional assets, and the amount of such debt
secured by any such Lien is not increased; (xi) capital leases made in the
ordinary course of business (but excluding, however, sale-leaseback transactions
in any event) in which there is no provision for title to the leased Property to
pass to the Borrower or such Subsidiary at the expiration of the lease term or
as to which no bargain purchase option exists; and (xii) rights of lessors in
respect of Properties leased to the Borrower or its Subsidiaries under operating
leases.
SECTION 5.8. Maintenance of Existence.
Except as permitted in Section 5.10, the Borrower shall, and shall cause
each Subsidiary to, maintain its corporate existence and carry on its business
in substantially the same manner and in substantially the same fields as such
business is now carried on and maintained. Without limiting the generality of
the foregoing, the Borrower shall, and shall cause each Subsidiary to, maintain
at all times in full force and effect all Franchise Rights necessary to the
ownership, operation and development of all franchised restaurant business
conducted, or contemplated to be conducted, by the Borrower and such
Subsidiaries, except with respect to Voluntary Store Closings and except with
respect to any Applebee's Spinoff.
SECTION 5.9. Dissolution.
Neither the Borrower nor any of its Subsidiaries shall suffer or permit
dissolution or liquidation either in whole or in part, except through corporate
reorganization to the extent permitted by Section 5.10.
SECTION 5.10. Consolidations, Mergers and Sales of Assets.
The Borrower will not, nor will it permit any Subsidiary to, consolidate or
merge with or into, or sell, lease or otherwise transfer all or any substantial
part of its assets to, any other Person, or discontinue or eliminate any
business line or segment, provided, however, that subject at all times to
Section 5.19, the Borrower or any Subsidiary may merge with another Person
(which is not the Borrower or such Subsidiary) if (i) such Person was organized
under the laws of the United States of America or one of its states (ii) the
Borrower or such Subsidiary (as the case may be) is the corporation surviving
such merger and (iii) immediately after giving effect to such merger, no Default
shall have occurred and be continuing, and any Subsidiaries of the Borrower may
(i) merge or con solidate with each other or with the Borrower (so long as the
Borrower is the corporation surviving such merger), or (ii) sell assets to each
other or to the Borrower; and, provided, further, that, the Borrower may, upon
giving at least two (2) Business Days' advance written notice to the Agent
thereof, consummate an Applebee's Spinoff if made in accordance with the terms
set forth in the
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definition thereof and provided that Borrower complies with Section 2.9 in
regard thereto respecting coincident mandatory prepayment of the Loan by an
amount equal to the Net Cash Proceeds therefrom.
SECTION 5.11. Use of Proceeds.
The entire proceeds of the Loan will be used by the Borrower to refinance
all existing indebtedness of the Borrower under the Original Credit Agreement,
by extension and renewal thereof, and for no other purpose.
SECTION 5.12. Compliance with Laws; Payment of Taxes.
The Borrower will, and will cause each of its Subsidiaries and each member
of the Controlled Group to, comply in all material respects with applicable laws
(including but not limited to ERISA), regulations and similar requirements of
governmental authorities (including but not limited to PBGC), except where the
necessity of such compliance is being contested in good faith through
appropriate proceedings. The Borrower will, and will cause each of its
Subsidiaries to, pay promptly when due all taxes, assessments governmental
charges, claims for labor, supplies, rent and other obligations which, if
unpaid, might become a Lien against the Property of the Borrower or any
Subsidiary, except liabilities being contested in good faith and against which,
if requested by the Agent, the Borrower will set up reserves in accordance with
GAAP.
SECTION 5.13. Insurance.
The Borrower will maintain, and will cause each of its Subsidiaries to
maintain (either in the name of the Borrower or in such Subsidiary's own name),
with financially sound and reputable insurance companies, insurance on, and in
respect of the ownership and operation of, its Properties in at least such
amounts and against at least such risks as are usually insured against in the
same general area by companies of established repute engaged in the same or
similar business.
SECTION 5.14. Change in Fiscal Year.
The Borrower will not change its Fiscal Year without the consent of the
Required Banks.
SECTION 5.15. Maintenance of Property.
The Borrower shall, and shall cause each Subsidiary to, maintain all of its
Properties in good condition, repair and working order, ordinary wear and tear
excepted.
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SECTION 5.16. Environmental Notices.
The Borrower shall furnish to the Agent, promptly after the Borrower
becomes aware thereof, written notice of all Environmental Liabilities, pending,
threatened Environmental Proceedings, Environmental Notices, Environmental
Judgments and Orders and Environmental Re leases, at, on, in, under or in any
way affecting the Properties or any adjacent property and all facts, events, or
conditions that could reasonably be expected to lead to any of the foregoing.
SECTION 5.17. Environmental Matters.
The Borrower will not, and will not permit any Third Party to, use,
produce, manufac ture, process, treat, recycle, generate, store, dispose of,
manage at, or otherwise handled or ship or transport to or from the Properties
any Hazardous Materials except for Hazardous Materials such as cleaning
solvents, pesticides and other similar materials used, produced, manufactured,
processed, treated, recycled, generated, stored, disposed, managed, or otherwise
handled in the ordinary course of business in compliance with all applicable
Environmental Requirements.
SECTION 5.18. Environmental Releases.
The Borrower agrees that upon the occurrence of an Environmental Release
(except for any Environmental Release which (x) occurred in compliance with all
Environmental Requirements and (y) could not reasonably be expected to have or
cause a Material Adverse Effect), it will act immediately to investigate the
extent of, and to take appropriate remedial action to eliminate, such
Environmental Release, whether or not ordered or otherwise directed to do so by
any Environmental Authority.
SECTION 5.19. Investments.
The Borrower will not make (nor will the Borrower permit any Subsidiary to
make) any investment in any Person or Property (which term "investment," for
purposes hereof, shall mean and include, without limitation, the acquisition of
any property, the issuance, acquisition or exchange of any capital stock, debt
or other obligations or security to, from or with any Person, the making of any
loan, advance, extension of credit, credit accommodation, Guarantee or capital
contribution to or on behalf of any Person, and the leasing or subleasing of any
property to any Person), provided, however, that, notwithstanding the foregoing,
the Borrower (or any Subsidiary) may, from time to time, undertake the
following, without the necessity of obtaining the Required Lenders' prior
written consent thereto:
(i) Current Assets. Acquire current assets for use in, or arising from, the
sale of goods or services in the ordinary course of its business (including, for
this purpose, but without limitation, credit card receivables);
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(ii) Capital Expenditures. Make capital expenditures in the ordinary course
of its business;
(iii) Franchise Fees. Pay franchisee fees and royalties to its franchisors
in the ordinary course of its business;
(iv) Escrow Deposits. Make or maintain escrow deposits for the payment of
taxes, rents, utilities, insurance or like matters in the ordinary course of its
business;
(v) Bank Accounts. Make and maintain deposits of cash in demand deposit
accounts of banks in the ordinary course of its business, and make endorsements
of checks, drafts or other in struments in connection therewith;
(vi) Surplus Cash. Consistent at all times with the Borrower's internal
Statement of Investment Policy, invest surplus cash in (A) obligations of, or
guaranteed by, the United States of America or any agency thereof, (B)
short-term certificates of deposit issued by, and time deposits with, any Bank
or any other financial institution domiciled in the United States of America
with assets of at least $500,000,000, (C) short-term commercial paper rated at
least "A1" by Standard & Poors or "P1" by Moody's, and (D) fixed or adjustable
rate corporate debt securities with a credit rating of at least double A (Aa/AA)
by either Moody's or Standard & Poors, provided that any fixed rate debt
securities have a maturity of one year or less;
(vii) Subsidiaries. Make investments in those Consolidated Subsidiaries of
the Borrower which are wholly-owned, directly or indirectly, by the Borrower, in
the ordinary course of, and pursuant to the reasonable requirements of, the
Borrower's and such Subsidiaries' respective businesses, provided that the
aggregate amount of such investments which may be outstanding at any one time
hereafter, as to all such Subsidiaries, shall not exceed, in any event, (A) ten
percent (10%) of consolidated total assets of Borrower and its Consolidated
Subsidiaries at any time prior to December 30, 1997, (B) seven and one-half
percent (7-1/2%) of consolidated total assets of Borrower and its Consolidated
Subsidiaries on or at any time after December 31, 1997, but prior to June 30,
1998, and (C) five percent (5%) of consolidated total assets of Borrower and its
Consolidated Subsidiaries on or after June 30, 1998; it being understood and
agreed that (a) there shall be excluded from such calculation any investment
deemed made by the Borrower in DF&R Restaurants, Inc., a Texas corporation which
is a wholly-owned, Consolidated Subsidiary of the Borrower, pursuant to the
accounting for the prior acquisition of such corporation by the Borrower as a
pooling of interests; (b) there shall be deducted in any event from the amount
of investments in Subsidiaries which may be made pursuant to this clause (vii)
the aggregate amount of Capitalized Lease Obligations of all Subsidiaries which
are at any time outstanding, if and to the extent not already counted against
such amount as an investment of Borrower; i.e., as a Capitalized Lease
Obligation owing to Borrower as lessor or sublessor; and (c) the provisions of
this clause (vii) shall be the exclusive means by which the Borrower (or any
Subsidiary) may make investments in any Subsidiaries (whether or not
wholly-owned Subsidiaries) and shall override any other provisions of
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this Section 5.19 (including, particularly, clauses (x), (xi) and (xii) below)
which may be construed otherwise to permit such investments.
(viii) Travel Advances. Make travel and similar advances to employees from
time to time in the ordinary course of business;
(ix) Special Life Insurance Program. The Borrower may invest up to Eight
Hundred Fifty Thousand Dollars ($850,000) per Fiscal Year in the making of
annual premiums payable on the split dollar joint survivor life insurance
program implemented, or to be implemented, covering the lives of ▇▇▇ ▇. ▇▇▇▇▇▇,
▇▇. and his spouse ▇▇▇▇ ▇▇▇▇▇▇, with an initial death benefit of Fifty Million
Dollars ($50,000,000), provided, however, that (i) such investments are made
over a period not to exceed ten (10) Fiscal Years and (ii) Borrower maintains at
all times during the effective period of the program a security interest in
policy proceeds and cash values of policies issued as part of the program equal
in amount to not less than its then cumulative premium investments;
(x) Applebee's Franchisees. Make investments in franchisees of "Applebee's"
restaurants, but no investment in ▇▇▇▇▇▇▇▇'▇ International, Inc. (or any Person
which subsequent hereto shall become the franchisor of "Applebee's" restaurants)
shall be permitted to be made subsequent to the Closing Date, notwithstanding
this clause (x) or any other provision of this Section, except with the prior
written consent of the Required Lenders;
(xi) Other Restaurant Concepts. Make investments in other restaurant
concepts, besides "Applebee's," so long as the total amount of each such
investment (either considered in dividually or as part of a series of related,
concurrent investments), does not exceed ten percent (10%) of Borrower's
consolidated total assets immediately before such investment (or the last in a
series of related, concurrent investments) is made; or
(xii) Other Investments Generally. Make other investments, not described in
clauses (i) through (xi) above, provided that all such investments, in the
aggregate, do not exceed at any one time ten percent (10%) of Stockholders'
Equity.
The Borrower shall notify the Agent from time to time, but not less frequently
than quarterly, or at any time at Agent's request, of the nature and amount of
any investments made pursuant to clauses (x), (xi) and (xii) hereof which,
individually or in the aggregate, exceed One Hundred Thousand Dollars
($100,000).
SECTION 5.20. Subsidiary Debt.
Except solely to the extent expressly permitted in clause (vii) of Section
5.19 of this Agreement, the Borrower will not permit any Consolidated Subsidiary
of the Borrower which is a wholly-owned Subsidiary, directly or indirectly, of
the Borrower, to create, incur or suffer to exist any of the following: (i)
indebtedness for borrowed funds; (ii) Capitalized Lease Obligations, provided,
however, that DF&R Restaurants, Inc. and its Subsidiaries may incur Capitalized
Lease
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Obligations in an aggregate amount not to exceed Ten Million Dollars
($10,000,000) at any one time outstanding; (iii) Guarantees; (iv) debts,
liabilities or obligations to any seller incurred to pay the deferred purchase
price of property or services having a deferred purchase price of One Million
Dollars ($1,000,000) or more, excepting, in any event, trade accounts payable
arising in the ordinary course of business and purchase options prior to their
exercise; and (v) debts, liabilities or obligations in respect of Synthetic
Leases.
ARTICLE 6. DEFAULTS
SECTION 6.1. Events of Default.
If one or more of the following events ("Events of Default") shall have
occurred and be continuing:
6.1.1 Non-Payment. The Borrower (i) shall fail to pay when due any
principal of the Loan or (ii) shall fail to pay any interest on the Loan within
five (5) Domestic Business Days after such interest shall become due, or (iii)
shall fail to pay any fee or other amount payable hereunder or under any Loan
Document within five (5) Domestic Business Days after such fee or other amount
becomes due; or
6.1.2 Failure to Observe Certain Covenants. The Borrower shall fail to
observe or perform any covenant contained in Sections 5.3 through 5.9, 5.10,
5.11, 5.12, 5.15 or 5.19, inclusive; or
6.1.3 Failure to Observe Covenants Generally. The Borrower shall fail to
observe or perform any covenant or agreement contained or incorporated by
reference in this Agreement (other than those covered by Sections 6.1.1 and
6.1.2) and such failure shall not have been cured within ten (10) days after the
earlier to occur of (i) written notice thereof has been given to the Borrower by
the Agent at the request of any Bank or (ii) an executive, senior financial or
accounting officer of the Borrower otherwise becomes aware of any such failure;
or
6.1.4 Misrepresentation. Any representation, warranty, certification or
statement made by the Borrower in Article IV of this Agreement or in any
certificate, financial statement or other document delivered pursuant to this
Agreement shall prove to have been incorrect or misleading in any material
respect when made (or deemed made); or
6.1.5 Cross-Default. The Borrower or any Subsidiary shall fail to make any
payment in respect of any debt, liability or obligation outstanding individually
or in the aggregate with all other such debts, liabilities or obligations, equal
to or in excess of Five Hundred Thousand Dollars ($500,000), other than the
Notes, when due or within any applicable grace period; or any event or condition
shall occur which results in the acceleration of the maturity of any such debt,
liability or obligation outstanding of the Borrower or any Subsidiary
individually or in the aggregate
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with all other such debts, liabilities or obligations equal to or in excess of
Five Hundred Thousand Dollars ($500,000) or the mandatory prepayment or purchase
of any such debt, liability or obligation by the Borrower (or its designee) or
such Subsidiary (or its designee) individually or in the aggregate with all
other such debts, liabilities or obligations equal to or in excess of Five
Hundred Thousand Dollars ($500,000) prior to the scheduled maturity thereof, or
enables (or, with the giving of notice or lapse of time or both, would enable)
the holders of any such debt, liability or obligation individually or in the
aggregate with all other such debts, liabilities or obligations equal to or in
excess of Five Hundred Thousand Dollars ($500,000) or any Person acting on such
holders' behalf to accelerate the maturity thereof or require the mandatory
prepayment or purchase thereof prior to the scheduled maturity thereof, without
regard to whether such holders or other Person shall have exercised or waived
their right to do so; or
6.1.6 Voluntary Bankruptcy. The Borrower or any Subsidiary shall commence a
voluntary case or other proceeding seeking liquidation, reorganization or other
relief with respect to itself or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary case
or other proceeding commenced against it, or shall make a general assignment for
the benefit of creditors, or shall fail generally to pay its debts as they
become due, or shall take any corporate action to authorize any of the
foregoing; or
6.1.7 Involuntary Bankruptcy. An involuntary case or other proceeding shall
be commenced against the Borrower or any Subsidiary seeking liquidation,
reorganization or other relief with respect to it or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property, and such
involuntary case or other proceeding shall remain undismissed and unstayed for a
period of sixty (60) days; or an order for relief shall be entered against the
Borrower or any Subsidiary under the federal bankruptcy laws as now or hereafter
in effect; or
6.1.8 ERISA. The Borrower or any member of the Controlled Group shall fail
to pay when due any material amount which it shall have become liable to pay to
the PBGC or to a Plan under Title IV of ERISA; or notice of intent to terminate
a Plan or Plans shall be filed under Title IV of ERISA by the Borrower, any
member of the Controlled Group, any plan administrator or any combination of the
foregoing; or the PBGC shall institute proceedings under Title IV of ERISA to
terminate or to cause a trustee to be appointed to administer any such Plan or
Plans or a proceeding shall be instituted by a fiduciary of any such Plan or
Plans to enforce Section 515 or 4219(c)(5) of ERISA and such proceeding shall
not have been dismissed within thirty (30) days thereafter; or a condition shall
exist by reason of which the PBGC would be entitled to obtain a decree
adjudicating that any such Plan or Plans must be terminated; or
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6.1.9 Judgments. One or more judgments or orders for the payment of money
in an aggregate amount equal to or greater than Five Hundred Thousand Dollars
($500,000) shall be rendered against the Borrower or any Subsidiary and such
judgment or order shall continue unsatisfied and unstayed for a period of thirty
(30) days; or
6.1.10 Tax Liens. A federal tax Lien shall be filed against the Borrower
under Section 6323 of the Code or a Lien of the PBGC shall be filed against the
Borrower or any Subsidiary under Section 4068 of ERISA and in either case such
Lien shall remain undischarged for a period of thirty (30) days after the date
of filing; or
6.1.11 Change of Control. ▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. shall cease to own and
control, beneficially and with power to vote, at least fifteen percent (15%) of
the outstanding shares of the voting common stock of the Borrower; or any Person
(other than ▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.) 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) of
twenty percent (20%) or more of the outstanding shares of the voting common
stock of the Bor rower; or as of any date, a majority of the Board of Directors
of the Borrower consists of individuals who were not either (A) directors of the
Borrower as of the corresponding date of the previous year, (B) selected or
nominated to become directors by a Board of Directors of the Borrower of which a
majority consisted of individuals described in clause (A), or (C) selected or
nominated to become di rectors by the Board of Directors of the Borrower of
which a majority consisted of individuals described in clause (A) and
individuals described in clause (B); or
6.1.12 Loss of Franchise Rights. If any of the Franchise Rights of the
Borrower or its Subsidiaries shall be forfeited, suspended, lost, rejected,
disclaimed, impaired, curtailed or otherwise adversely altered or affected in
any manner, in whole or in any material part, for any reason whatsoever, whether
or not related to the Borrower's or such Subsidiary's performance of its duties
and obligations as franchisee at any time hereafter except with respect to any
Voluntary Store Closing and except in connection with any Applebee's Spinoff; or
there shall occur any default by the Borrower or any such Subsidiary in the
payment, performance or observance of any terms, covenants or conditions of any
franchise or development agreements giving rise to the existence and/or
continuation of any such Franchise Rights, and any grace or cure period relative
thereto granted therein shall have expired without such default being waived or
cured except in connection with any Applebee's Spinoff; or
6.1.13 Material Adverse Effect. The occurrence of any event, act,
occurrence, or condition which the Required Banks determine either does or has a
reasonable probability of causing, or resulting in, a Material Adverse Effect;
then, and in every such event, the Agent shall (i) if requested by the Required
Banks, by notice to the Borrower terminate the Commitments and they shall
thereupon terminate, and (ii) if requested by the Required Banks, by notice to
the Borrower declare the Notes (together with accrued interest thereon) to be,
and the Notes shall thereupon become, immediately due and payable without
presentment,
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demand, protest or other notice of any kind, all of which are hereby waived by
the Borrower, together with interest at the Default Rate accruing on the
principal amount thereof from and after the date of such Event of Default;
provided that if any Event of Default specified in Sections 6.1.6 or 6.1.7 above
occurs with respect to the Borrower or any Subsidiary, without any notice to the
Borrower or any other acts by the Agent or the Banks, the Commitments shall
thereupon terminate and the Notes (together with accrued interest thereon) shall
become immediately due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Borrower, together
with interest thereon at the Default Rate accruing on the principal amount
thereof from and after the date of such Event of Default. Notwithstanding the
foregoing, the Agent shall have available to it all other remedies at law or
equity, and shall exercise any one or all of them at the request of the Required
Banks.
SECTION 6.2. Notice of Default.
The Agent shall give notice to the Borrower of any Default under Section
6.1.3 promptly upon being requested to do so by any Bank and shall thereupon
notify all the Banks thereof.
ARTICLE 7. THE AGENT
SECTION 7.1. Appointment; Powers and Immunities.
Each Bank hereby irrevocably appoints and authorizes the Agent to act as
its agent hereunder and under the other Loan Documents with such powers as are
specifically delegated to the Agent by the terms hereof and thereof, together
with such other powers as are reasonably incidental thereto. The Agent: (a)
shall have no duties or responsibilities except as expressly set forth in this
Agreement and the other Loan Documents, and shall not by reason of this
Agreement or any other Loan Document be a trustee for any Bank; (b) shall not be
responsible to the Banks for any recitals, statements, representations or
warranties contained in this Agreement or any other Loan Document, or in any
certificate or other document referred to or provided for in, or received by any
Bank under, this Agreement or any other Loan Document, or for the validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Loan Document or any other document referred to or provided for herein
or therein or for any failure by the Borrower to perform any of its obligations
hereunder or thereunder; (c) shall not be required to initiate or conduct any
litigation or collection proceedings hereunder or under any other Loan Document
except to the extent requested by the Required Banks, and then only on terms and
conditions satisfactory to the Agent; and (d) shall not be responsible for any
action taken or omitted to be taken by it hereunder or under any other Loan
Document or any other document or instrument referred to or provided for herein
or therein or in connection herewith or therewith, except for its own gross
negligence or willful misconduct. The Agent may employ agents and
attorneys-in-fact and shall not be responsible for the negligence or misconduct
of any such agents or attorneys-in-fact selected by it with reasonable care. The
provi sions of this Article VII are solely for the benefit of the Agent and the
Banks, and the Borrower shall not have any rights as a third party beneficiary
of any of the provisions hereof. In performing its
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functions and duties under this Agreement and under the other Loan Documents,
the Agent shall act solely as agent of the Banks and does not assume and shall
not be deemed to have assumed any obligation towards or relationship of agency
or trust with or for the Borrower. The duties of the Agent shall be ministerial
and administrative in nature, and the Agent shall not have by reason of this
Agreement or any other Loan Document a fiduciary relationship in respect of any
Bank.
SECTION 7.2. Reliance by Agent.
The Agent shall be entitled to rely upon any certification, notice or other
com munication (including any thereof by telephone, telefax, telegram or cable)
believed by it to be genu ine and correct and to have been signed or sent by or
on behalf of the proper Person or Persons, and upon advice and statements of
legal counsel, independent and accountants or other experts selected by the
Agent. As to any matters not expressly provided for by this Agreement or any
other Loan Document, the Agent shall in all cases be fully protected in acting,
or in refraining from acting, hereunder and thereunder in accordance with
instructions signed by the Required Banks, and such instructions of the Required
Banks in any action taken or failure to act pursuant thereto shall be binding on
all of the Banks.
SECTION 7.3. Defaults.
The Agent shall not be deemed to have knowledge of the occurrence of a
Default or an Event of Default (other than the nonpayment of principal of or
interest on the Loan) unless the Agent has received notice from a Bank or the
Borrower specifying such Default or Event of Default and stating that such
notice is a "Notice of Default". In the event that the Agent receives such a
notice of the occurrence of a Default or an Event of Default, the Agent shall
give prompt notice thereof to the Banks. The Agent shall give each Bank prompt
notice of each nonpayment of principal of or interest on the Loan whether or not
it has received any notice of the occurrence of such nonpayment. The Agent shall
(subject to Section 9.6) take such action hereunder with respect to such Default
or Event of Default as shall be directed by the Required Banks, provided that,
unless and until the Agent shall have received such directions, the Agent may
(but shall not be obligated to) take such action, or refrain from taking such
action, with respect to such Default or Event of Default as it shall deem
advisable in the best interests of the Banks.
SECTION 7.4. Rights of Agent as a Bank.
With respect to its pro rata share of the Loan, Wachovia in its capacity as
a Bank here under shall have the same rights and powers hereunder as any other
Bank and may exercise the same as though it were not acting as the Agent, and
the term "Bank" or "Banks" shall, unless the context otherwise indicates,
include Wachovia in its individual capacity. The Agent may (without having to
account therefor to any Bank) accept deposits from, lend money to and generally
engage in any kind of banking, trust or other business with the Borrower (and
any of its Affiliates) as if it were not acting as the Agent, and the Agent may
accept fees and other consideration from the Borrower (in addition to any agency
fees and arrangement fees heretofore agreed to between the Borrower and the
Agent)
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for services in connection with this Agreement or any other Loan Document or
otherwise without having to account for the same to the Banks.
SECTION 7.5. Indemnification.
Each Bank severally agrees to indemnify the Agent, to the extent the Agent
shall not have been reimbursed by the Borrower, ratably in accordance with its
Commitment, for any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses (including, without
limitation, counsel fees and disbursements) or disbursements of any kind and
nature whatsoever which may be imposed on, incurred by or asserted against the
Agent in any way relating to or arising out of this Agreement or any other Loan
Document or any other documents con templated by or referred to herein or
therein or the transactions contemplated hereby or thereby (excluding, unless an
Event of Default has occurred and is continuing, the normal administrative costs
and expenses incident to the performance of its agency duties hereunder) or the
enforcement of any of the terms hereof or thereof or any such other documents;
provided, however that no Bank shall be liable for any of the foregoing to the
extent they arise from the gross negligence or willful misconduct of the Agent.
If any indemnity furnished to the Agent for any purpose shall, in the opinion of
the Agent, be insufficient or become impaired, the Agent may call for additional
indemnity and cease, or not commence, to do the acts indemnified against until
such additional indemnity is furnished.
SECTION 7.6. Payee of Note Treated as Owner.
The Agent may deem and treat the payee of any Note as the owner thereof for
all purposes hereof unless and until a written notice of the assignment or
transfer thereof shall have been filed with the Agent and the provisions of
Section 9.8 have been satisfied. Any requests, authority or consent of any
Person who at the time of making such request or giving such authority or
consent is the holder of any Note shall be conclusive and binding on any
subsequent holder, transferee or assignee of that Note or of any Note or Notes
issued in exchange therefor or replacement thereof.
SECTION 7.7. Nonreliance on Agent and Other Banks.
Each Bank agrees that it has, independently and without reliance on the
Agent or any other Bank, and based on such documents and information as it has
deemed appropriate, made its own credit analysis of the Borrower and decision to
enter into this Agreement and that it will, independently and without reliance
upon the Agent or any other Bank, and based on such documents and information as
it shall deem appropriate at the time, continue to make its own analysis and
decisions in taking or not taking action under this Agreement or any of the
other Loan Documents. The Agent shall not be required to keep itself informed as
to the performance or observance by the Borrower of this Agreement or any of the
other Loan Documents or any other document referred to or provided for herein or
therein or to inspect the properties or books of the Borrower or any other
Person. Except for notices, reports and other documents and information
expressly required to be furnished to the Banks by the Agent hereunder or under
the other Loan Documents, the Agent shall
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not have any duty or responsibility to provide any Bank with any credit or other
information concerning the affairs, financial condition or business of the
Borrower or any other Person (or any of their Affiliates) which may come into
the possession of the Agent.
SECTION 7.8. Failure to Act.
Except for action expressly required of the Agent hereunder or under the
other Loan Documents, the Agent shall in all cases be fully justified in failing
or refusing to act hereunder and thereunder unless it shall receive further
assurances to its satisfaction by the Banks of their indemnification obligations
under Section 7.5 against any and all liability and expense which may be
incurred by the Agent by reason of taking, continuing to take, or failing to
take any such action.
SECTION 7.9. Resignation of Agent.
Subject to the appointment and acceptance of a successor Agent as provided
below, the Agent may resign at any time by giving notice thereof to the Banks.
Upon any such resignation, the Required Banks shall have the right to appoint a
successor Agent. If no successor Agent shall have been so appointed by the
Required Banks and shall have accepted such appointment within thirty (30) days
after the retiring Agent's notice of resignation, then the retiring Agent may,
on behalf of the Banks, appoint a successor Agent. Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Agent, and the retiring Agent shall be discharged
from its duties and obligations hereunder. After any retiring Agent's
resignation or removal hereunder as Agent, the provisions of this Article 7
shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as the Agent hereunder.
ARTICLE 8. CHANGE IN CIRCUMSTANCES; COMPENSATION
SECTION 8.1. Basis for Determining Interest Rate Inadequate or Unfair.
If on or prior to the first day of any Interest Period, the Agent
determines that deposits in Dollars (in the applicable amounts) are not being
offered in the relevant market for such Interest Period, or the Required Banks
advise the Agent that the Adjusted LIBOR Rate, as determined by the Agent, will
not adequately and fairly reflect the cost to such Banks of funding the relevant
Euro-Dollar Rate Loan Tranche for such Interest Period, then, the Agent shall
forthwith give notice thereof to the Borrower and the Banks, whereupon until the
Agent notifies the Borrower that the circumstances giving rise to such
suspension no longer exist, the obligations of the Banks to make the Euro-Dollar
Rate Loan Tranche specified in such notice shall be suspended. Unless the
Borrower notifies the Agent at least two (2) Domestic Business days before the
date of any Borrowing of such Euro-Dollar Rate Loan Tranche for which a Notice
of Borrowing has previously been given that it elects not to borrow on such
date, such Borrowing shall instead be made as a Base Rate Borrowing.
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SECTION 8.2. Illegality.
If, after the date hereof, the adoption of any applicable law, rule or
regulation, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof (any such
agency being referred to as an "Authority" and any such event being referred to
as a "Change of Law"), or compliance by any Bank (or its Lending Office) with
any request or directive (whether or not having the force of law) of any
Authority shall make it unlawful or impossible for any Bank (or its Lending
Office) to make, maintain or fund its Euro-Dollar Rate Loan Tranche and such
Bank shall so notify the Agent, the Agent shall forthwith give notice thereof to
the other Banks and the Borrower, whereupon until such Bank notifies the
Borrower and the Agent that the circumstances giving rise to such suspension no
longer exist, the obligation of such Bank to make Euro-Dollar Rate Loan Tranche
shall be suspended. Before giving any notice to the Agent pursuant to this
Section, such Bank shall designate a different Lending Office if such
designation will avoid the need for giving such notice and will not, in the
judgment of such Bank, be otherwise disadvantageous to such Bank, in any respect
deemed material by such Bank. If such Bank shall determine that it may not
lawfully continue to maintain and fund any of its outstanding Euro-Dollar Rate
Loan Tranches to maturity and shall so specify in such notice, the Borrower
shall immediately prepay in full the then outstanding principal amount of each
Euro-Dollar Rate Loan Tranche of such Bank, together with accrued interest
thereon. Concurrently with prepaying each such Euro-Dollar Rate Loan Tranche,
the Borrower shall borrow, pursuant to Section 2.2.3, a Base Rate Loan Tranche
in an equal principal amount from such Bank (on which interest and principal
shall be payable contemporaneously with the related Euro-Dollar Rate Loan
Tranches of the other Banks), and such Bank shall make such a Base Rate Loan
Tranche.
SECTION 8.3. Increased Cost and Reduced Return.
8.3.1 Change of Law. If after the date hereof, a Change of Law or
compliance by any Bank (or its Lending Office) with any request or directive
(whether or not having the force of law) of any Authority either: (i) shall
subject any Bank (or its Lending Office) to any tax, duty or other charge with
respect to its allocable portion of the Loan, its Note or its obligation to make
the Loan, or shall change the basis of taxation of payments to any Bank (or its
Lending Office) of the principal of or interest on its allocable portion of the
Loan or any other amounts due under this Agreement in respect of its allocable
portion of the Loan or its obligation to make a Loan (except for changes in the
rate of tax on the overall net income of such Bank or its Lending Office imposed
by the jurisdiction in which such Bank's principal executive office or Lending
Office is located); or (ii) shall impose, modify or deem applicable any reserve,
special deposit insurance or similar requirement (including, without limitation,
any such requirement imposed by the Board of Governors of the Federal Reserve
System, but excluding any such requirement included in an applicable Euro-Dollar
Reserve Percentage) against assets of, deposits with or for the account of, or
credit extended by, any Bank (or its Lending Office); or (iii) shall impose on
any Bank (or its Lending Office) or the London Interbank Market any other
similar condition affecting its Loan, its Note or its obligation to make the
Loan; and the result of any of the foregoing is to increase the cost to such
Bank (or its Lending
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Office) of making or maintaining such Loan, or to reduce the amount of any such
received or receiv able by such Bank (or its Lending Office) under this
Agreement or under its Note with respect thereto, by an amount deemed by such
Bank to be material, then, within fifteen (15) days after demand by such Bank
(with a copy to the Agent), the Borrower shall pay to such Bank such additional
amount or amounts as will compensate such Bank for such increased cost or
reduction.
8.3.2 Capital Adequacy. If any Bank shall have determined that after the
date hereof the adoption of any applicable law, rule or regulation regarding
capital adequacy, or any change therein, or any change in the interpretation or
administration thereof, or compliance by any Bank (or its Lending Office) with
any request or directive regarding capital adequacy (whether or not having the
force of law) of any Authority, has or would have the effect of reducing the
rate of return on such Bank's capital as a consequence of its obligations
hereunder to a level below that which such Bank could have achieved but for such
adoption, change or compliance (taking into consideration such Bank's policies
with respect to capital adequacy), by an amount deemed by such Bank to be
material, then from time to time, within fifteen (15) days after demand by such
Bank, the Borrower shall pay to such Bank such additional amount or amounts as
will compensate such Bank for such reduction.
8.3.3 Notice of Determination. Each Bank will promptly notify the Borrower
and the Agent of any event of which it has knowledge, occurring after the date
hereof, which will en title such Bank to compensation pursuant to this Section
and will designate a different Lending Office if such designation will avoid the
need for, or reduce the amount of, such compensation and will not, in the
judgment of such Bank, be otherwise disadvantageous to such Bank, in any respect
deemed material by such Bank. A certificate of any Bank claiming compensation
under this Section and setting forth the additional amount or amounts to be paid
to it hereunder shall be conclusive in the absence of manifest error. In
determining such amount, such Bank may use any reasonable averaging and
attribution methods.
8.3.4 Assignees Covered. The provisions of this Section 8.3 shall be ap
plicable with respect to any Assignee or other Transferee (excluding any
Participants), and any calculations required by such provisions shall be made
based upon the circumstances of such Assignee or other Transferee.
SECTION 8.4. Base Rate Loan Tranche Substituted for Affected Euro-Dollar
Rate Loan Tranche.
If (i) the obligation of any Bank to make or maintain a Euro-Dollar Rate
Loan Tranche has been suspended pursuant to Section 8.2 or (ii) any Bank has
demanded compensation under Sec tion 8.3.1, and the Borrower shall, by at least
five (5) Euro-Dollar Business Days' prior notice to such Bank through the Agent,
have elected that the provisions of this Section shall apply to such Bank, then,
unless and until such Bank notifies the Borrower that the circumstances giving
rise to such suspension or demand for compensation no longer apply: (i) all Loan
Tranches which would oth erwise be made by such Bank as Euro-Dollar Rate Loan
Tranches, shall be made instead as Base Rate
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Loan Tranches (in all cases interest and principal on such Loan Tranches shall
be payable contemporaneously with the related Euro-Dollar Rate Loan Tranche of
the other Banks), and (ii) after each Euro-Dollar Rate Loan Tranche has been
repaid, all payments of principal which would otherwise be applied to repay such
Euro-Dollar Rate Loan Tranches shall be applied to repay its Base Rate Loan
Tranches instead.
SECTION 8.5. Replacement of a Lender.
In addition to the foregoing, if (i) the obligation of any Bank (but not
all Banks) to make available or maintain Euro-Dollar Rate Loan Tranches has been
suspended pursuant to Section 8.2 or (ii) any Bank (but not all Banks) has
demanded compensation under Section 8.3, then, in either such case, the Borrower
shall have the right, at its option, upon giving at least five (5) Euro- Dollar
Business Days' prior notice to such Bank through the Agent, either: (i)
notwithstanding any term of Section 2.7.3 to the contrary, to reduce the
Commitment of such Bank to zero, in which case the Borrower shall reduce, by
repayment or prepayment, as the case may be, its Borrowings from such Bank to
zero effective upon such Commitment reduction becoming effective, and the
Commitment of each remaining Bank shall remained unchanged; or (ii) to obtain
one or more Banks or Assignees willing to replace such Bank, in which case the
Bank which is being replaced shall execute and deliver to such Bank or Assignee
an Assignment and Acceptance in accordance with Section 9.8.3 with respect to
such Bank's entire interest under this Agreement and the Notes.
SECTION 8.6. Compensation.
Upon the request of any Bank, delivered to the Borrower and the Agent, the
Borrower shall pay to such Bank such amount or amounts as shall compensate such
Bank for any loss, cost or expense incurred by such Bank (in connection with the
relevant Interest Period) as a result of: (i) any payment or prepayment (whether
pursuant to Section 8.2 or otherwise) of a Euro-Dollar Rate Loan Tranche on a
date other than the last day of an Interest Period for such Euro-Dollar Rate
Loan Tranche; or (ii) any failure by the Borrower to prepay a Euro-Dollar Rate
Loan Tranche on the date for such prepayment specified in the relevant notice of
prepayment hereunder; or (iii) any failure by the Borrower to borrow a
Euro-Dollar Rate Loan on the date for the Euro-Dollar Borrowing of which such
Euro-Dollar Rate Loan Tranche is a part specified in the applicable Notice of
Borrowing delivered pursuant to Section 2.2. Such compensation shall include,
without limitation, an amount equal to the excess, if any, of (x) the amount of
interest which would have accrued on the amount so paid or prepaid or not
prepaid or borrowed for the period from the date of such payment, prepayment or
failure to prepay or borrow to the last day of the then current Interest Period
for such Euro-Dollar Rate Loan Tranche (or, in the case of a failure to prepay
or borrow, the Interest Period for such Euro-Dollar Rate Loan Tranche which
would have commenced on the date of such failure to prepay or borrow) at the
applicable rate of interest for such Euro-Dollar Rate Loan provided for herein
(excluding, however, therefrom the amount thereof attributable to the imposition
of the Applicable Margin) over (y) the amount of interest (as reasonably
determined by such Bank) such Bank would have paid on deposits in Dollars of
comparable amounts having terms comparable to such period placed with it by
leading banks in the London Interbank Market.
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ARTICLE 9. MISCELLANEOUS
SECTION 9.1. Notices.
All notices, requests and other communications to any party hereunder or
under any Loan Document shall be in writing (including bank wire, telecopier or
similar writing) and shall be given to such party at its address or telecopier
number set forth on the signature pages hereof or such other address or
telecopier number as such party may hereafter specify for the purpose by notice
to each other party. Each such notice, request or other communication shall be
effective (i) if given by telecopier, when such telecopy is transmitted to the
telecopier number specified in this Section and the appropriate confirmation is
received, (ii) if given by mail, seventy-two (72) hours after such communication
is deposited in the United States mails with first class postage prepaid,
addressed as aforesaid or (iii) if given by any other means, when delivered at
the address specified in this Section; provided that notices to the Agent under
Article 2 or Article 8 shall not be effective until received.
SECTION 9.2. No Waivers.
No failure or delay by the Agent or any Bank in exercising any right, power
or privilege hereunder or under any Note shall operate as a waiver thereof nor
shall any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. The
rights and remedies herein provided shall be cumulative and not exclusive of any
rights or remedies provided by law.
SECTION 9.3. Expenses; Documentary Taxes.
The Borrower shall pay (i) all out-of-pocket expenses of the Agent,
including fees and disbursements of special counsel for the Banks and the Agent,
in connection with the preparation of this Agreement and the other Loan
Documents, any waiver or consent hereunder or thereunder or any amendment hereof
or thereof or any Default or alleged Default hereunder or thereunder and (ii) if
a Default occurs, all out-of-pocket expenses incurred by the Agent and any Bank,
including fees and disbursements of counsel (including a reasonable allocation
of the cost of internal counsel), in con nection with such Default and
collection and other enforcement proceedings resulting therefrom, in cluding
out-of-pocket expenses incurred in enforcing this Agreement, the Notes and other
Loan Documents. The Borrower shall indemnify the Agent and each Bank against any
transfer taxes, docu mentary taxes, assessments or charges made by any Authority
by reason of the execution and delivery of this Agreement, the Notes or the
other Loan Documents.
SECTION 9.4. Indemnification.
The Borrower shall indemnify the Agent, the Banks and each affiliate
thereof and their respective directors, officers, employees and agents from, and
hold each of them harmless against, any and all losses, liabilities, claims or
damages to which any of them may become subject, insofar
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as such losses, liabilities, claims or damages arise out of or result from any
actual or proposed use by the Borrower of the proceeds of any extension of
credit by any Bank hereunder or breach by the Borrower of this Agreement, the
Notes or any other Loan Document or from any investigation, litigation or other
proceeding (including any threatened investigation or proceeding) relating to
the foregoing, and the Borrower shall reimburse the Agent and each Bank, and
each affiliate thereof and their respective directors, officers, employees and
agents, upon demand for any expenses (including, without limitation, legal fees)
incurred in connection with any such investigation or proceeding; but excluding
any such losses, liabilities, claims, damages or expenses incurred by reason of
the gross negligence or willful misconduct of the Person to be indemnified. The
indemnification provisions (including, without limitation, provisions for
default interest, to the extent that this Section 9.4 might be construed as
duplicating the Borrower's obligation to pay interest at the Default Rate as
required elsewhere in this Agreement) set forth in this Section 9.4 are meant to
be without duplication of any other indemnification provisions set forth in this
Agreement.
SECTION 9.5. Sharing of Setoffs.
Each Bank agrees that if it shall, by exercising any right of setoff or
counterclaim or otherwise, receive payment of a proportion of the aggregate
amount of principal and interest owing with respect to the Note held by it which
is greater than the proportion received by any other Bank in respect of the
aggregate amount of all principal and interest owing with respect to the Note
held by such other Bank, the Bank receiving such proportionately greater payment
shall purchase such participations in the Notes held by the other Banks owing to
such other Banks, and such other adjustments shall be made, as may be required
so that all such payments of principal and interest with respect to the Notes
held by the Banks owing to such other Banks shall be shared by the Banks pro
rata; provided that (i) nothing in this Section shall impair the right of any
Bank to exercise any right of setoff or counterclaim it may have and to apply
the amount subject to such exercise to the payment of indebtedness of the
Borrower other than its indebtedness under the Notes, and (ii) if all or any
portion of such payment received by the purchasing Bank is thereafter recovered
from such purchasing Bank, such purchase from each other Bank shall be rescinded
and such other Bank shall repay to the purchasing Bank the purchase price of
such participation to the extent of such recovery together with an amount equal
to such other Bank's ratable share (according to the proportion of (x) the
amount of such other Bank's required repayment to (y) the total amount so
recovered from the purchasing Bank) of any interest or other amount paid or
payable by the purchasing Bank in respect of the total amount so recovered. The
Borrower agrees, to the fullest extent it may effectively do so under applicable
law, that any holder of a participation in a Note, acquired pursuant to the
foregoing arrangements, may exercise rights of setoff or counterclaim and other
rights with re spect to such participation as fully as if such holder of a
participation were a direct creditor of the Borrower in the amount of such
participation.
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SECTION 9.6. Amendments and Waivers.
Any provision of this Agreement, the Notes or any other Loan Documents may
be amended or waived if, but only if, such amendment or waiver is in writing and
is signed by the Borrower and the Required Banks (and, if the rights or duties
of the Agent are affected thereby, by the Agent); provided that, no such
amendment or waiver shall, unless signed by all Banks, (i) except as otherwise
provided in Section 8.5, change the Commitment of any Bank or subject any Bank
to any additional obligation, (ii) change the principal of or rate of interest
on the Loan or any fees or other amounts payable hereunder, (iii) change the
date fixed for any payment of principal of or interest on the Loan or any fees
hereunder, (iv) change the amount of principal, interest, fees or other amounts
payable hereunder due on any date fixed for the payment thereof, (v) change the
percentage of the Commitments or of the aggregate unpaid amount of the Notes, or
the percentage of Banks, which shall be required for the Banks or any of them to
take any action under this Section or any other provision of this Agreement,
(vi) change the manner of application of any payments made under this Agreement
or the Notes, (vii) release or substitute all or any substantial part of the
collateral (if any) held as security for the Loan, (viii) release any Guarantee
given to support payment of the Loan; (ix) change any terms of clause (vii) of
Section 5.19; or (x) change any terms of Section 5.20. In connection with the
foregoing, the Borrower will not solicit, request or negotiate for or with
respect to any proposed waiver or amendment of any of the provisions of this
Agreement unless each Bank shall be informed thereof by the Borrower or the
Agent and shall be afforded an opportunity of considering the same and shall be
supplied by the Borrower with sufficient information to enable it to make an
informed decision with respect thereto. Executed or true and correct copies of
any waiver or consent effected pursuant to the provisions of this Agreement
shall be delivered by the requisite percentage of Banks. The Borrower will not,
directly or indirectly, pay or cause to be paid any remuneration, whether by way
of supplemental or additional interest, fee or otherwise, to any Bank (in its
capacity as a Bank) as consideration for or as an inducement to the entering
into by such Bank of any waiver or amendment of any of the terms and provisions
of this Agreement unless such re muneration is concurrently paid, on the same
terms, ratably to all such Banks.
SECTION 9.7. No Margin Stock Collateral.
Each of the Banks represents to the Agent, the Borrower and each of the
other Banks that it in good faith is not, (i) directly or indirectly (by
negative pledge or otherwise), relying upon any Margin Stock as collateral in
the extension or maintenance of the credit provided for in this Agreement or
(ii) entering into this Agreement with an immediate intention to resell its
Commitment or its pro rata share of the Loan.
SECTION 9.8. Successors and Assigns.
9.8.1 No Assignment by Borrower. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns; provided that the Borrower may not assign or otherwise
transfer any of its rights under this Agreement.
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9.8.2 Participation. Any Bank may, without the consent of the Borrower, at
any time sell to one or more Persons (each a "Participant") participating
interests in the allocable portion of the Loan owing to such Bank, any Note held
by such Bank, any Commitment of such Bank hereunder or any other interest of
such Bank hereunder. In the event of any such sale by a Bank of a participating
interest to a Participant, such Bank's obligations under this Agreement shall
remain unchanged, such Bank shall remain solely responsible for the performance
thereof, such Bank shall remain the holder of any such Note for all purposes
under this Agreement, and the Borrower and the Agent shall continue to deal
solely and directly with such Bank in connection with such Bank's rights and
obligations under this Agreement. In no event shall a Bank that sells a
participation be obligated to the Participant to take or refrain from taking any
action hereunder except that such Bank may agree that it will not (except as
provided below), without the consent of the Participant, agree to (i) the change
of any date fixed for the payment of principal of or interest on the Loan, (ii)
the change of the amounts of any principal, interest or fees due on any date
fixed for the payment thereof with respect to the Loan, (iii) the change of the
principal of the Loan, (iv) any change in the rate at which either interest is
payable thereon or (if the Participant is entitled to any part thereof) any fee
is payable hereunder from the rate at which the Participant is entitled to
receive interest or such fee in respect of such participation, (v) the release
or substitution of all or any substantial part of the collateral (if any) held
as security for the Loan, or (vi) the release of any Guarantee given to support
payment of the Loans. Each Bank selling a participating interest in respect of
the Loan, or its Note, Commitment or other interest under this Agreement shall,
within ten (10) Domestic Business Days of such sale, provide the Borrower and
the Agent with written notification stating that such sale has occurred and
identifying the Participant and the interest purchased by such Participant.
Except as otherwise expressly provided in Article 8, the Agent, the Banks and
the Borrower agree that each Participant shall be entitled to the benefits of
Article 8 with respect to its participation in the Loan outstanding from time to
time, but only to the extent that such Bank which sold the relevant
participation would have been entitled thereto pursuant to the terms of this
Agreement.
9.8.3 Assignments. Any Bank may at any time assign to one or more banks or
financial institutions (each an "Assignee") all, or a proportionate part of all,
of its rights and obligations under this Agreement and the Notes, and such
Assignee shall assume all such rights and obligations, pursuant to an Assignment
and Acceptance, executed by such Assignee, such transferor Bank and the Agent
(and, in the case of an Assignee that is not then a Bank, by the Borrower);
provided that (i) no interest may be sold by a Bank pursuant to this Section
unless the Assignee shall agree to assume ratably equivalent portions of the
transferor Bank's Commitment, (ii) the amount of the Commitment of the
transferor Bank subject to such assignment (determined as of the effective date
of the assignment) shall be equal to at least Five Million Dollars ($5,000,000),
(iii) no interest may be sold by a Bank pursuant to this Section to any Assignee
that is not then a Bank or an Affiliate of a Bank without the consent of the
Borrower and the Agent (which consent shall not be unreason ably withheld),
except after the occurrence of, and during the continuance of, an Event of
Default, and (iv) during the term of this Agreement, a Bank may not have more
than two Assignees that are not then Banks at any one time. Upon (A) execution
of the Assignment and Acceptance by such transferor Bank, such Assignee, the
Agent and (if applicable) the Borrower, (B) delivery of an executed copy of the
Assignment and Acceptance of the Borrower and the Agent, (C) payment by
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such Assignee to such transferor Bank of an amount equal to the purchase price
agreed between such transferor Bank and such Assignee, and (D) payment of a
processing and recordation fee of Two Thousand Five Hundred Dollars ($2,500) to
the Agent, such Assignee shall for all purposes be a Bank party to this
Agreement and shall have all the rights and obligations of a Bank under this
Agreement to the same extent as if it were an original party hereto with a
Commitment as set forth in such instrument of assumption, and the transferor
Bank shall be released from its future obligations hereunder to a corresponding
extent, and no further consent or action by the Borrower, the Banks or the Agent
shall be required. Upon the consummation of any transfer to an Assignee pursuant
to this Section 9.8.3, the transferor Bank, the Agent and the Borrower shall
make appropriate arrangements so that, if required, a new Note is issued to such
Assignee.
9.8.4 Disclosures. Subject to the provisions of Section 9.9, the Borrower
authorizes each Bank to disclose to any Participant, Assignee or other
transferee (each a "Transferee") and any prospective Transferee any and all
information in such Bank's possession concerning the Borrower which has been
delivered to such Bank by the Borrower pursuant to this Agreement or which has
been delivered to such Bank by the Borrower in connection with such Bank's
credit evaluation prior to entering into this Agreement.
9.8.5 Status of Transferee. No Transferee shall be entitled to receive any
greater payment under Section 8.3 than the transferor Bank would have been
entitled to receive with respect to the rights transferred, unless such transfer
is made with the Borrower's prior written consent or by reason of the provisions
of Section 8.2 or 8.3 requiring such Bank to designate a different Lending
Office under certain circumstances or at a time when the circumstances giving
rise to such greater payment did not exist.
SECTION 9.9. Confidentiality.
Each Bank and the Agent agrees to exercise its best efforts (and, in any
event, with at least the same degree of care as it ordinarily exercises with
respect to confidential information of its other customers) to keep any
information delivered or made available by the Borrower to it, including,
without limitation, information obtained by the Agent or such Bank by reason of
a visit or investigation by any Person contemplated in Section 5.2, confidential
from any one other than persons employed or retained by such Bank who are or are
expected to become engaged in evaluating, approving, structuring or
administering the Loan; provided, however that nothing herein shall prevent any
Bank from disclosing such information (i) to the Agent or any other Bank, (ii)
upon the order of any court or administrative agency, (iii) upon the request or
demand of any regulatory agency or authority having jurisdiction over such Bank,
(iv) which has been publicly disclosed other than by an act or omission of the
Agent or any Bank except as permitted herein, (v) to the extent reasonably re
quired in connection with any litigation (with respect to this Agreement, any of
the other Loan Docu ments, in connection with any of the foregoing, or any other
obligations of the Borrower or any Subsidiary owing to the Agent or any Bank) to
which the Agent, any Bank or their respective Affili ates may be a party, (vi)
to the extent reasonably required in connection with the exercise of any remedy
hereunder, (vii) to such Bank's legal counsel and independent auditors and
(viii) to any actual
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or proposed Participant, Assignee or other Transferee of all or part of its
rights hereunder which has agreed in writing to be bound by the provisions of
this Section 9.9.
SECTION 9.10. Representation by Banks.
Each Bank hereby represents that it is a commercial lender or financial
institution which makes loans in the ordinary course of its business and that it
will make its pro rata share of the Loan hereunder for its own account in the
ordinary course of such business; provided, however that, subject to Section
9.8, the disposition of a Note or the Notes held by that Bank shall at all times
be within its exclusive control.
SECTION 9.11. Obligations Several.
The obligations of each Bank hereunder are several, and no Bank shall be
responsible for the obligations or commitment of any other Bank hereunder.
Nothing contained in this Agreement and no action taken by Banks pursuant hereto
shall be deemed to constitute the Banks to be a partnership, an association, a
joint venture or any other kind of entity. The amounts payable at any time
hereunder to each Bank shall be a separate and independent debt, and each Bank
shall be entitled to protect and enforce its rights arising out of this
Agreement or any other Loan Document and it shall not be necessary for any other
Bank to be joined as an additional party in any proceeding for such purpose.
SECTION 9.12. GEORGIA LAW.
THIS AGREEMENT, EACH NOTE AND EACH OTHER LOAN DOCUMENT SHALL BE CONSTRUED
IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF GEORGIA.
SECTION 9.13. Interpretation.
No provision of this Agreement or any of the other Loan Documents shall be
construed against or interpreted to the disadvantage of any party hereto by any
court or other governmental or judicial authority by reason of such party having
or being deemed to have structured or dictated such provision.
SECTION 9.14. CONSENT TO JURISDICTION.
THE BORROWER, AND EACH OF THE BANKS AND THE AGENT IR REVOCABLY (A) SUBMITS
TO THE NONEXCLUSIVE PERSONAL JURISDICTION IN THE STATE OF GEORGIA, THE COURTS
THEREOF AND THE UNITED STATES DISTRICT COURTS SITTING THEREIN, FOR THE
ENFORCEMENT OF THIS AGREEMENT, THE NOTES AND THE OTHER LOAN DOCUMENTS, (B)
WAIVES ANY AND ALL PERSONAL RIGHTS UNDER THE LAW OF ANY JURISDICTION TO OBJECT
ON ANY BASIS
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(INCLUDING, WITHOUT LIMITATION, INCONVENIENCE OF FORUM) TO JURISDICTION OR VENUE
WITHIN THE STATE OF GEORGIA FOR THE PURPOSE OF LITIGATION TO ENFORCE THIS
AGREEMENT, THE NOTES OR THE OTHER LOAN DOCUMENTS, AND (C) AGREES THAT SERVICE OF
PROCESS MAY BE MADE UPON IT IN THE MANNER PRESCRIBED IN SECTION 9.1 FOR THE
GIVING OF NOTICE TO THE BORROWER. NOTHING HEREIN CONTAINED, HOWEVER, SHALL
PREVENT THE AGENT FROM BRINGING ANY ACTION OR EXERCISING ANY RIGHTS AGAINST ANY
SECURITY AND AGAINST THE BORROWER PERSONALLY, AND AGAINST ANY ASSETS OF THE
BORROWER, WITHIN ANY OTHER STATE OR JURISDICTION.
SECTION 9.15. Counterparts.
This Agreement may be signed in any number of counterparts, each of which
shall be an original, with the same effect as if the signatures thereto and
hereto were upon the same instru ment.
SECTION 9.16. Survival.
All representations, warranties and covenants made herein shall survive the
execution and delivery of all of the Loan Documents. The terms and provisions of
this Agreement shall con tinue in full force and effect until the payment of the
Notes and termination of the Commitments.
SECTION 9.17. Entire Agreement; Amendment; Severability.
This Agreement shall constitute the entire agreement among the parties
hereto with respect to the subject matter hereof. This Agreement amends and
restates, in its entirety, the Original Credit Agreement, effective as of the
Closing Date, except that, for purposes of Sections 5.4, 5.5 and 5.6, the
effective date of the amendment and restatement of those sections pursuant
hereto shall be deemed to be one (1) Business Day prior to the last day of the
Fiscal Quarter ending closest to December 31, 1997. This Agreement is not
intended to be, and shall not constitute, a novation of the Original Credit
Agreement. Neither this Agreement nor any provision hereof may be changed,
waived, discharged, modified or terminated orally, but only by an instrument in
writing in accordance with Section 9.6. If any provision of any of the Loan
Documents or the application thereof to any party thereto or circumstances shall
be invalid or unenforceable to any extent, the remainder of such Loan Documents
and the application of such provisions to any other party thereto or
circumstance shall not be affected thereby and shall be enforced to the greatest
extent permitted by law.
SECTION 9.18. TIME OF THE ESSENCE.
TIME IS OF THE ESSENCE IN THIS AGREEMENT, THE NOTES AND THE OTHER LOAN
DOCUMENTS.
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SECTION 9.19. Banks Not a Joint Venturer.
Neither this Agreement nor any agreements, instruments, documents or
transactions contemplated hereby (including the Loan Documents), shall in any
respect be interpreted, deemed or construed as making any Bank or the Agent a
partner or joint venturer with the Borrower or as creat ing any similar
relationship or entity.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, under seal, by their respective authorized officers, as of the
day and year first above written.
"BORROWER"
APPLE SOUTH, INC.
(SEAL)
By:_________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇, Chief Financial
Officer and Treasurer
Attest:_____________________________
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Assistant
Secretary
Apple South, Inc.
Corporate Headquarters
▇▇▇▇▇▇▇ at Washington
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇,
Chief Financial Officer
Telecopier Number: (▇▇▇) ▇▇▇-▇▇▇▇
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COMMITMENTS
"BANKS"
$60,000,000.00 WACHOVIA BANK, NATIONAL
ASSOCIATION, as the Agent and as
a Bank
(SEAL)
By:________________________________
▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Vice President
Lending Office:
Wachovia Bank, N.A.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Georgia Corporate
Commercial Group
Telecopier Number: (▇▇▇) ▇▇▇-▇▇▇▇
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$15,000,000 SUNTRUST BANK, ATLANTA
(SEAL)
By:_________________________________
Name:_______________________________
Title:______________________________
By:_________________________________
Name:_______________________________
Title:______________________________
Lending Office:
SunTrust Bank, Atlanta
▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier Number: (▇▇▇) ▇▇▇-▇▇▇▇
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$25,000,000 BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
(SEAL)
By:_________________________________
Name:_______________________________
Title:______________________________
Lending Office:
Bank of America National Trust
and Savings Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇-▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier Number: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Bank of America National Trust
and Savings Association
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier Number: (▇▇▇) ▇▇▇-▇▇▇▇
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$20,000,000 BANQUE PARIBAS
(SEAL)
By:_________________________________
Name:_______________________________
Title:______________________________
By:_________________________________
Name:_______________________________
Title:______________________________
Lending Office:
Banque Paribas
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopier Number: (▇▇▇) ▇▇▇-▇▇▇▇
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$20,000,000 COOPERATIEVE CENTRALE
RAIFFEISEN-BOERENLEENBANK B.A.,
"RABOBANK NEDERLAND,"
NEW YORK BRANCH
By:_________________________________
Name:_______________________________
Title:______________________________
By:_________________________________
Name:_______________________________
Title:______________________________
Lending Office:
Cooperatieve Central
Raiffeisen-Boerenleenbank B.A.
"Rabobank Nederland"
New York Branch
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopier Number: (▇▇▇) ▇▇▇-▇▇▇▇
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$15,000,000 CANADIAN IMPERIAL BANK OF COMMERCE, INC.
By:_________________________________
Name:_______________________________
Title:______________________________
Lending Office:
Canadian Imperial Bank of Commerce, Inc.
2 Paces West
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier Number: (▇▇▇) ▇▇▇-▇▇▇▇
-55-
$10,000,000 CRESTAR BANK
(SEAL)
By:_________________________________
Name:_______________________________
Title:______________________________
Lending Office:
Crestar Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier Number: (▇▇▇) ▇▇▇-▇▇▇▇
-56-
$20,000,000 BANKBOSTON, N.A.
By:_________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇, Director
Lending Office:
Large Corporate -- Restaurant Division
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Mail Stop 01-09-05
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier Number: (▇▇▇) ▇▇▇-▇▇▇▇
-57-
$10,000,000 COMERICA BANK
By:_________________________________
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Account Officer
Lending Office:
Comerica Bank
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
9th Floor, MC 3280
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier Number: (▇▇▇) ▇▇▇-▇▇▇▇
-58-
$5,000,000 AMSOUTH BANK OF ALABAMA
By:_________________________________
Name:_______________________________
Title:______________________________
Lender Office:
AmSouth Bank of Alabama
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier Number: (▇▇▇) ▇▇▇-▇▇▇▇
$200,000,000 Total Commitments
-59-
EXHIBIT A
FORM OF ASSIGNMENT AND ACCEPTANCE
ASSIGNMENT AND ACCEPTANCE
Dated ________ __, 19__
Reference is made t o the Second Amended and Restated Credit Agreement
dated as of March 1, 1998 (together with all amendments and modifications
thereto, the "Credit Agreement" among Apple South, Inc., a Georgia corporation
(the "Borrower"), the Banks (as defined in the Credit Agreement) and Wachovia
Bank, National Association, as Agent (the "Agent"). Terms defined in the Credit
Agreement are used herein with the same meaning.
________________________________________ (the "Assignor") and
________________________________________ (the "Assignee") agree
as follows:
1. The Assignor hereby sells and assigns to the Assignee, and the Assignee
hereby purchases and assumes from the Assignor, a ________% interest in and to
all of the Assignor's rights and obligations under the Credit Agreement as of
the Effective Date (as defined below) (including, without limitation, a _____%
interest (which on the Effective Date hereof is $__________) in the Assignor's
Commitment and a _____ interest (which on the Effective Date hereof is
$__________) in that portion of the Loan owing to the Assignor (which on the
Effective Date hereof is $----------).
2. The Assignor (i) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement or any other instrument or document furnished pursuant thereto, other
than that it is the legal and beneficial owner of the interest being assigned by
it hereunder, that such interest is free and clear of any adverse claim and that
as of the date hereof its Commitment (without giving effect to assignments
thereof which have not yet become effective) is $__________ and the aggregate
outstanding principal amount of that portion of the Loan owing to it (without
giving effect to assignments thereof which have not yet become effective) is
$__________; (ii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or the
performance or observance by the Borrower of any of its obligations under the
Credit Agreement or any other instrument or document furnished pursuant thereto;
and (iii) at taches the Note(s) referred to in paragraph 1 above and requests
that the Agent exchange such Note(s) for [a new Note dated __________, ____ in
the principal amount of $__________ payable to the order of the Assignee) (new
Notes as follows: a Note dated __________, ____ in the principal
-1-
amount of $__________ payable to the order of the Assignor and a Note dated
__________, ____ in the principal amount of $__________ payable to the order of
the Assignee].
3. The Assignee (i) confirms that it has received a copy of the Credit
Agreement, together with copies of the financial statements referred to in
Section 4.4.1 thereof (or any more recent financial statements of the Borrower
delivered pursuant to Sections 5.1.1 or 5.1.2 thereof) and such other documents
and information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and Acceptance; (ii) agrees that it will,
independently and without reliance upon the Agent, the Assignor or any other
Bank and based on such documents and information as it shall deem appropriate at
the time, continue to make its own credit decisions in taking or not taking
action under the Credit Agreement; (iii) confirms that it is a bank or financial
institution; (iv) appoints and authorizes the Agent to take such action as agent
on its behalf and to exercise such powers under the Credit Agreement as are
delegated to the Agent by the terms thereof, together with such powers as are
reasonably incidental thereto; (v) agrees that it will perform in accordance
with their terms all of the obligations which by the terms of the Credit
Agreement are required to be performed by it as a Bank; (vi) specifies as its
Lending Office (and address for notices) the office set forth beneath its name
on the signature pages hereof, (vii) represents and warrants that the execution,
delivery and performance of this Assignment and Acceptance are within its
corporate powers and have been duly authorized by all necessary corporate
action, and (viii) attaches the forms prescribed by the Internal Revenue Service
of the United States certifying as to the Assignee's status for purposes of
determining exemption from United States withholding taxes with respect to all
payments to be made to the Assignee under the Credit Agreement and the Notes or
such other documents as are necessary to indicate that all such payments are
subject to such taxes at a rate reduced by an applicable tax treaty.
4. The Effective Date for this Assignment and Acceptance shall be (the
"Effective Date"). Following the execution of this Assignment and Acceptance, it
will be delivered to the Agent for execution and acceptance by the Agent (and to
the Borrower for execution by the Borrower. If Assignee is organized under the
laws of a jurisdiction outside the United States.
5. Upon such execution and acceptance by the Agent and execution by the
Borrower, if the Assignee is not a Bank prior to the Effective Date, from and
after the Effective Date, (i) the Assignee shall be a party to the Credit
Agreement and, to the extent rights and obligations have been transferred to it
by this Assignment and Acceptance, have the rights and obligations of a Bank
thereunder and (ii) the Assignor shall, to the extent its rights and obligations
have been transferred to the Assignee by this Assignment and Acceptance,
relinquish its rights (other than under Section 8.3 of the Credit Agreement) and
be released from its obligations under the Credit Agreement.
6. Upon such execution and acceptance by the Agent and execution by the
Borrower, if the Assignee is not a Bank prior to the Effective Date, from and
after the Effective Date, the Agent shall make all payments in respect of the
interest assigned hereby to the Assignee. The
-2-
Assignor and Assignee shall make all appropriate adjustments in payments for
periods prior to such acceptance by the Agent directly between themselves.
7. This Assignment and Acceptance shall be governed by, and construed in
accordance with, the laws of the State of Georgia.
[NAME OF ASSIGNOR]
By:
Title:
[NAME OF ASSIGNEE]
By:
Title:
Lending Office:
[Address]
WACHOVIA BANK, NATIONAL
ASSOCIATION, as Agent
By:
Title:
APPLE SOUTH, INC.
If the Assignee is not a
Bank prior to the Effective
Date.
By:
Title:
-3-
EXHIBIT B
FORM OF NOTE
NOTE
Atlanta, Georgia
March 1, 1998
For value received, APPLE SOUTH, INC., a Georgia corporation (the
"Borrower"), promises to pay to the order of ________________________________
(the "Bank"), for the account of its Lending Office, the principal sum of
[______________________________ Dollars ($__________)], representing the Bank's
pro rata share of the Loan made by the Banks to the Borrower pursuant to the
Credit Agreement referred to below, on the dates and in the amounts provided in
the Credit Agreement. The Borrower promises to pay interest on the unpaid
principal amount of this Note on the dates and at the rate or rates provided for
in the Credit Agreement referred to below. Interest on any overdue principal of
and, to the extent permitted by law, overdue interest on the principal amount
hereof shall bear interest at the Default Rate, as provided for in the Credit
Agreement. All such payments of principal and interest shall be made in lawful
money of the United States in Federal or other immediately available funds at
the office of Wachovia Bank, National Association, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, or such other address as may be specified from time
to time pursuant to the Credit Agreement.
All repayments of the principal amount hereof may be recorded by the Bank
and, prior to any transfer hereof, endorsed by the Bank on the schedule attached
hereto, or on a continuation of such schedule attached to and made a part
hereof; provided that the failure of the Bank to make any such recordation or
endorsement shall not affect the obligations of the Borrower hereunder or under
the Credit Agreement.
This Note is one of the Notes referred to in the Second Amended and
Restated Credit Agreement dated as of March 1, 1998, among the Borrower, the
Banks listed on the signature pages thereof and Wachovia Bank, National
Association, as Agent (as the same may be amended and modified from time to
time, the "Credit Agreement"). Terms defined in the Credit Agreement are used
herein with the same meanings. Reference is made to the Credit Agreement for the
provisions for the voluntary and mandatory prepayment and the repayment hereof
and the acceleration of the maturity hereof.
-1-
IN WITNESS WHEREOF, the Borrower has caused this Note to be duly executed,
under seal, by its duly authorized officer as of the day and year first above
written.
APPLE SOUTH, INC.
(SEAL)
By:_______________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇, Chief Financial
Officer and Treasurer
Attest:__________________________
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Assistant
Secretary
-2-
Note (cont'd)
PAYMENTS OF PRINCIPAL
Amount of
Principal Notation
Date Repaid Made By
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
-3-
EXHIBIT C
FORM OF NOTICE OF BORROWING
NOTICE OF BORROWING
________________, 199_
Wachovia Bank, National
Association, as Agent
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Commercial Group
Re: Second Amended and Restated Credit Agreement (as amended or
modified from time to time, the "Credit Agreement") dated as
of March 1, 1998, by and among Apple South, Inc., Wachovia
Bank, National Association, as a Bank and as the Agent, and
the other Banks from time to time party thereto.
Ladies and Gentlemen:
Unless otherwise defined herein, capitalized terms used herein shall
have the meanings attributable thereto in the Credit Agreement.
This Notice of Borrowing is delivered to you pursuant to Section 2.2 of
the Credit Agreement.
The Borrower hereby requests a Borrowing in the aggregate principal
amount of $________________ to be established on ______________, 199__, and for
interest to accrue thereon at the rate established by the Credit Agreement for
(check one):
1. _____ Base Rate Loan Tranche
2. _____ Euro-Dollar Rate Loan Tranche
The duration of the Interest Period with respect thereto in the case of
a Euro-Dollar Rate Loan Tranche shall be (check one):
1. _____ 1 month
2. _____ 2 months
3. _____ 3 months
4. _____ 6 months
-1-
The Borrower has caused this Notice of Borrowing to be executed and
delivered by its duly authorized officer as of this ____ day of __________,
199__.
APPLE SOUTH, INC.
By:
Title:
-2-
EXHIBIT D
FORM OF OPINION OF
COUNSEL FOR THE BORROWER
March 1, 1998
To the Banks and the Agent
Referred to below
c/o Wachovia Bank,
National Association, as Agent
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
We have acted as legal counsel to Apple South, Inc. (the "Borrower") in
connection with the Second Amended and Restated Credit Agreement (the "Credit
Agreement") dated as of March 1, 1998, among the Borrower, the Banks from time
to time parties thereto, and Wachovia Bank, National Association, as Agent.
Terms defined in the Credit Agreement are used herein as therein defined.
We have examined original or copies, certified or otherwise identified to
our satisfaction, of such documents, corporate records, certificates of public
officials and other instruments and have conducted such other investigations of
fact and law as we have deemed necessary or advisable for purposes of this
opinion. We have assumed for purposes of our opinions set forth below that the
executed and delivery of the Credit Agreement by each Bank and by the Agent have
been duly authorized by each Bank and by the Agent.
When facts relevant to these opinions were not independently established by
us, we have relied upon the certificate of the Secretary of the Borrower. We
have assumed the genuineness of all signatures, the authenticity of all
documents delivered to us as originals, the legal capacity of natural persons,
the conformity to original documents of all documents submitted to us as
certified or photostatic copies and the authenticity of the originals of such
letter documents.
Upon the basis of the foregoing, and subject to the further qualifications
and assumptions set forth below, we are of the opinion that:
-1-
1. The Borrower is a corporation duly incorporated, validly existing and in
good standing under the laws of the State of Georgia and has all corporate
powers required to carry on its business as now conducted.
2. The execution, delivery and performance by the Borrower of the Credit
Agreement, the Notes and the Other Agreements (i) are within the Borrower's
corporate powers, (ii) have been duly authorized by all necessary corporate
action, (iii) require no action by or in respect of, or filing with, any
governmental body, agency or official, (iv) do not contravene, or constitute a
default under, any provision of (A) applicable law or regulation or (B) the
certificate of incorporation or by-laws of the Borrower or (C) any material
judgment, injunction, order or decree which to our knowledge is binding upon the
Borrower or (D) any material indenture, mortgage, deed of trust, loan agreement
or other financial agreement or instrument (but not including leases) known to
us which to our knowledge is binding on the Borrower and (V) do not, to our
knowledge, result in the creation or imposition of any Lien on any asset of the
Borrower.
3. The Credit Agreement, the Notes and the Other Agreements constitutes a
valid and binding agreement of the Borrower, enforceable against the Borrower in
accordance with its terms, except as such enforceability may be limited: (i) by
bankruptcy, insolvency, reorganization, fraudulent conveyance, voidable
preference, moratorium or similar laws applicable to creditors' rights or the
collection of debtors' obligations generally and (ii) by general principles of
equity (including, without limitation, the availability of equitable remedies).
4. To our knowledge, there is no action, suit or proceeding pending, or
threatened, against or affecting the Borrower or any of its Subsidiaries before
any court or arbitrator or any governmental body, agency or official in which
there is a reasonable possibility of an adverse decision which could materially
adversely affect the business, consolidated financial position or consolidated
results of operations of the Borrower and its Consolidated Subsidiaries,
considered as a whole, or which in any manner questions the validity or
enforceability of the Credit Agreement or any Note.
5. The Borrower is not an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
We are qualified to practice law in the State of Georgia and do not purport
to be experts on any laws other than the federal laws of the United States and
the laws of the State of Georgia, and this opinion is rendered only with respect
to such laws. We have made no investigation of the laws of any other
jurisdiction.
Very truly yours,
-2-
EXHIBIT E
FORM OF CLOSING CERTIFICATE
APPLE SOUTH, INC.
CLOSING CERTIFICATE
Reference is made to the Second Amended and Restated Credit Agreement ("the
Credit Agreement") dated as of March 1, 1998, among Apple South, Inc., the Banks
listed therein, and Wachovia Bank, N.A., as Agent. Capitalized terms used herein
have the meanings ascribed thereto in the Credit Agreement.
Pursuant to Section 3.1.4 of the Credit Agreement, the undersigned, ▇▇▇▇▇
▇. ▇▇▇▇▇, the duly authorized Chief Financial Officer and Treasurer of Apple
South, Inc., in his aforesaid official capacity and not personally, hereby
certifies to the Agent and the Banks on behalf of the Borrower that (i) no
Default has occurred and is continuing as of the date hereof, and (ii) the
representations and warranties contained in Article IV of the Credit Agreement
are true on and as of the date hereof.
IN WITNESS WHEREOF, the undersigned has executed this Certificate in his
aforesaid official capacity as Chief Financial Officer and not personally as of
March 1, 1998.
By:
▇▇▇▇▇ ▇. ▇▇▇▇▇, as Chief
Financial Officer and
Treasurer, for and on
behalf of Apple
South, Inc.
-1-
EXHIBIT F
FORM OF SECRETARY'S CERTIFICATE
SECRETARY'S CERTIFICATE
The undersigned, being the duly elected, qualified and acting Secretary of
APPLE SOUTH, INC., a Georgia corporation (the "Corporation"), and, in such
capacity, being duly authorized and empowered to issue this certificate on its
behalf, does hereby certify that:
1. On or prior to the date hereof, by unanimous consent of the Board of
Directors of the Corporation, the resolutions set forth and described on Exhibit
A were unanimously adopted and, being the only effective resolutions adopted by
the Board of Directors of this Corporation (or any committee thereof) with
respect to the matters referred to therein, remain unmodified and in full force
and effect as of the date hereof:
2. The following are the names of the duly elected officers of this
Corporation now holding the respective offices indicated, and that the signature
set forth opposite the name of each such officer is the true and genuine
signature of such officer (complete as applicable):
▇▇▇▇▇ ▇. ▇▇▇▇▇, Chief Financial _____________________________
Officer and Treasurer (Signature)
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Assistant Secretary _____________________________
(Signature)
3. Attached hereto as Exhibit B is a true, correct and complete copy of the
Articles of Incorporation of the Corporation as in effect on the date hereof
(including all amendments thereof to date).
4. Attached hereto as Exhibit C is a true, correct and complete copy of the
By-Laws of the Corporation as in effect on the date hereof (including all
amendments thereof to date).
IN WITNESS WHEREOF, I have hereunto set my hand as Assistant Secretary and
the seal of the Corporation as of the 1st day of March, 1998.
[CORPORATE SEAL] ________________________________
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Assistant Secretary
-1-
EXHIBIT G
FORM OF COMPLIANCE CERTIFICATE
COMPLIANCE CERTIFICATE
Reference is made to that certain Second Amended and Restated Credit
Agreement dated as of March 1, 1998 (as modified and supplemented and in effect
from time to time, the "Credit Agreement") among Apple South, Inc., the Banks
from time to time party thereto, and Wachovia Bank, National Association, as a
Bank and as Agent as ascribed thereto in the Credit Agreement.
Pursuant to Section 5.1.3 of the Credit Agreement, the undersigned, the
[Chief Financial Officer/Chief Accounting Officer] of the Borrower, hereby
certifies that (i) attached hereto as Annex 1 are the true and accurate
calculations required to establish whether the Borrower was in compliance with
Sections 5.3, 5.4, 5.5, 5.6 and 5.19 of the Credit Agreement as of the end of
the Fis cal [Quarter/Year] ended __________, 19__, each determined in accordance
with the requirements of the Credit Agreement and (ii) [no Default exists on the
date hereof] [the following Defaults (including the details thereof) exist and
the Borrower is taking or proposes to take the following actions with respect
thereto]:
======================
======================
IN WITNESS WHEREOF, the undersigned has executed this Certificate in his
capacity as [Chief Financial Officer] and not personally as of the ____ day of
__________, 199___.
By:_________________________________
_______________________,
as _________________,
for and on behalf of
Apple South, Inc.
-1-
SCHEDULE 4.8
SUBSIDIARY SCHEDULE
[TO BE COMPLETED BY APPLE SOUTH, INC.]
-1-
SCHEDULE 5.7
DEBT SCHEDULE
Monthly
Description Short-Term Long-Term Total Payment Maturity Security
----------- ---------- --------- ----- ------- -------- --------
[TO BE COMPLETED BY APPLE SOUTH, INC.]