1
EXHIBIT 10(b)
--------------------------------------------------------------------------------
CREDIT AGREEMENT
dated as of December 18, 1996
by and among
LONGHORN STEAKS, INC.
and certain Subsidiaries thereof
listed on the signature pages hereto,
as Borrowers,
the Lenders referred to herein,
FIRST UNION NATIONAL BANK OF GEORGIA,
as Agent
and
FLEET NATIONAL BANK,
as Co-Agent
--------------------------------------------------------------------------------
2
TABLE OF CONTENTS
ARTICLE I DEFINITIONS .................................................................... 1
SECTION 1.1 Definitions............................................................ 1
SECTION 1.2 General................................................................ 12
SECTION 1.3 Other Definitions and Provisions....................................... 13
ARTICLE II REVOLVING CREDIT/TERM FACILITY.................................................. 13
SECTION 2.1 Credit Loans........................................................... 13
SECTION 2.2 Procedure for Advances of Loans........................................ 13
SECTION 2.3 Repayment of Loans..................................................... 14
SECTION 2.4 Notes.................................................................. 15
SECTION 2.5 Permanent Reduction of the Aggregate
Commitment........................................................... 15
SECTION 2.6 Termination of Credit Facility; Term-Out
of Loans ............................................................ 15
SECTION 2.7 Use of Proceeds........................................................ 16
SECTION 2.8 Limitation of Liability................................................ 16
SECTION 2.9 Agreements for Contribution............................................ 16
ARTICLE III GENERAL LOAN PROVISIONS......................................................... 18
SECTION 3.1 Interest............................................................... 18
SECTION 3.2 Notice and Manner of Conversion or
Continuation of Loans................................................ 21
SECTION 3.3 Fees................................................................... 21
SECTION 3.4 Manner of Payment...................................................... 22
SECTION 3.5 Crediting of Payments and Proceeds..................................... 22
SECTION 3.6 Adjustments............................................................ 22
SECTION 3.7 Nature of Obligations of Lenders
Regarding Loans; Assumption by the
Agent.................................................................. 23
SECTION 3.8 Changed Circumstances.................................................. 24
SECTION 3.9 Indemnity.............................................................. 26
SECTION 3.10 Capital Requirements................................................... 26
SECTION 3.11 Taxes.................................................................. 27
SECTION 3.12 Affected Lenders....................................................... 29
ARTICLE IV CLOSING; CONDITIONS OF CLOSING AND BORROWING.................................... 30
SECTION 4.1 Closing................................................................ 30
SECTION 4.2 Conditions to Closing and Initial Loan................................. 30
SECTION 4.3 Conditions to All Loans................................................ 33
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE BORROWERS................................. 34
SECTION 5.1 Representations and Warranties......................................... 34
SECTION 5.2 Survival of Representations and
Warranties, Etc...................................................... 41
ARTICLE VI FINANCIAL INFORMATION AND NOTICES...................................... 42
SECTION 6.1 Financial Statements and Projections................................... 42
3
SECTION 6.2 Officer's Compliance Certificate........................................ 43
SECTION 6.3 Other Reports........................................................... 43
SECTION 6.4 Notice of Litigation and Other Matters.................................. 44
SECTION 6.5 Accuracy of Information................................................. 45
ARTICLE VII AFFIRMATIVE COVENANTS............................................................ 45
SECTION 7.1 Preservation of Corporate Existence and
Related Matters....................................................... 45
SECTION 7.2 Maintenance of Property................................................. 45
SECTION 7.3 Insurance............................................................... 46
SECTION 7.4 Accounting Methods and Financial
Records............................................................... 46
SECTION 7.5 Payment and Performance of Obligations.................................. 46
SECTION 7.6 Compliance With Laws and Approvals...................................... 46
SECTION 7.7 Environmental Laws...................................................... 46
SECTION 7.8 Compliance with ERISA................................................... 47
SECTION 7.9 Compliance With Agreements.............................................. 47
SECTION 7.10 Conduct of Business..................................................... 48
SECTION 7.11 Visits and Inspections.................................................. 48
SECTION 7.12 Additional Borrowers.................................................... 48
SECTION 7.13 Further Assurances...................................................... 48
ARTICLE VIII FINANCIAL COVENANTS.............................................................. 49
SECTION 8.1 Leverage Ratio.......................................................... 49
SECTION 8.2 Minimum Net Worth....................................................... 49
SECTION 8.3 Interest Coverage Ratio................................................. 49
SECTION 8.4 Capital Expenditures; Investments....................................... 49
SECTION 8.5 Debt to Capitalization.................................................. 50
ARTICLE IX NEGATIVE COVENANTS............................................................... 50
SECTION 9.1 Limitations on Debt..................................................... 50
SECTION 9.2 Limitations on Contingent Obligations................................... 51
SECTION 9.3 Limitations on Liens.................................................... 52
SECTION 9.4 Limitations on Loans, Advances,
Investments and Acquisitions.......................................... 53
SECTION 9.5 Limitations on Mergers and Liquidation.................................. 54
SECTION 9.6 Limitations on Sale of Assets........................................... 55
SECTION 9.7 Limitations on Dividends and
Distributions......................................................... 55
SECTION 9.8 Transactions with Affiliates............................................ 56
SECTION 9.9 Certain Accounting Changes.............................................. 56
SECTION 9.10 Amendments; Payments and Prepayments of
Subordinated Debt..................................................... 56
SECTION 9.11 Restrictive Agreements.................................................. 56
ARTICLE X DEFAULT AND REMEDIES............................................................. 57
SECTION 10.1 Events of Default....................................................... 57
SECTION 10.2 Remedies................................................................ 59
SECTION 10.3 Rights and Remedies Cumulative; Non-
Waiver; etc........................................................... 60
ARTICLE XI THE AGENT........................................................................ 60
SECTION 11.1 Appointment............................................................. 60
ii
4
SECTION 11.2 Delegation of Duties..................................................... 61
SECTION 11.3 Exculpatory Provisions................................................... 61
SECTION 11.4 Reliance by the Agent.................................................... 61
SECTION 11.5 Notice of Default........................................................ 62
SECTION 11.6 Non-Reliance on the Agent and Other
Lenders................................................................ 62
SECTION 11.7 Indemnification.......................................................... 63
SECTION 11.8 The Agent in Its Individual Capacity..................................... 63
SECTION 11.9 Resignation of the Agent; Successor
Agent.................................................................. 63
SECTION 11.10 Co-Agent ................................................................ 64
ARTICLE XII MISCELLANEOUS..................................................................... 64
SECTION 12.1 Notices.................................................................. 64
SECTION 12.2 Expenses; Indemnity...................................................... 65
SECTION 12.3 Set-off.................................................................. 66
SECTION 12.4 Governing Law............................................................ 66
SECTION 12.5 Consent to Jurisdiction.................................................. 66
SECTION 12.6 Binding Arbitration; Waiver of Jury
Trial.................................................................. 67
SECTION 12.7 Reversal of Payments..................................................... 68
SECTION 12.8 Punitive Damages......................................................... 68
SECTION 12.9 Accounting Matters....................................................... 68
SECTION 12.10 Successors and Assigns; Participations................................... 69
SECTION 12.11 Amendments, Waivers and Consents......................................... 72
SECTION 12.12 Performance of Duties.................................................... 72
SECTION 12.13 All Powers Coupled with Interest......................................... 72
SECTION 12.14 Survival of Indemnities.................................................. 73
SECTION 12.15 Titles and Captions...................................................... 73
SECTION 12.16 Severability of Provisions............................................... 73
SECTION 12.17 Counterparts............................................................. 73
SECTION 12.18 Longhorn as Agent for Borrowers.......................................... 73
SECTION 12.19 Term of Agreement........................................................ 73
iii
5
EXHIBITS
Exhibit A - Form of Note
Exhibit B - Form of Notice of Borrowing
Exhibit C - Form of Notice of Prepayment
Exhibit D - Form of Notice of Conversion/Continuation
Exhibit E - Form of Officer's Compliance Certificate
Exhibit F - Form of Assignment and Acceptance
Exhibit G - Form of Notice of Account Designation
Exhibit H - Form of Joinder Agreement
SCHEDULES
Schedule 1 - Lenders and Commitments
Schedule 5.1(a) - Jurisdictions of Organization and
Qualification; Subsidiaries and
Capitalization
Schedule 5.1(g) - Intellectual Property Matters
Schedule 5.1(i) - ERISA Plans
Schedule 5.1(k) - Government Regulation
Schedule 5.1(l) - Material Contracts
Schedule 5.1(t) - Debt and Contingent Obligations
Schedule 5.1(u) - Litigation
Schedule 9.1 - Permitted Debt
Schedule 9.2 - Contingent Obligations
Schedule 9.3 - Existing Liens
Schedule 9.4 - Existing Loans, Advances and
Investments
iv
EXHIBITS
6
7
CREDIT AGREEMENT, dated as of the 18th day of December, 1996, by and
among LONGHORN STEAKS, INC., a corporation organized under the laws of Georgia
("Longhorn"), certain Subsidiaries of Longhorn listed on the signature pages
hereto (the "Subsidiary Borrowers" and, together with Longhorn, the
"Borrowers"), the Lenders who are or may become a party to this Agreement, and
FIRST UNION NATIONAL BANK OF GEORGIA, as Agent for the Lenders and FLEET
NATIONAL BANK, as Co-Agent for the Lenders.
STATEMENT OF PURPOSE
The Borrowers have requested, and the Lenders have agreed to extend,
certain Loans to the Borrowers on the terms and conditions of this Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, such parties
hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions. The following terms when used in this
Agreement shall have the meanings assigned to them below:
"Adjustment Date" shall have the meaning assigned thereto in Section
3.1.
"Affiliate" means, with respect to any Person, any other Person (other
than a Subsidiary) which directly or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
such first Person or any of its Subsidiaries. The term "control" means (a) the
power to vote ten percent (10%) or more of the securities or other equity
interests of a Person having ordinary voting power, or (b) the possession,
directly or indirectly, of any other power to direct or cause the direction of
the management and policies of a Person, whether through ownership of voting
securities, by contract or otherwise.
"Agent" means First Union in its capacity as Agent hereunder, and any
successor thereto appointed pursuant to Section 11.9.
"Agent's Office" means the office of the Agent specified in or
determined in accordance with the provisions of Section 12.1.
"Aggregate Commitment" means the aggregate amount of the Lenders'
Commitments hereunder, as such amount may be reduced or
1
8
modified at any time or from time to time pursuant to the terms hereof. On the
Closing Date, the Aggregate Commitment shall be sixty million dollars
($60,000,000).
"Agreement" means this Credit Agreement, as amended, amended and
restated, modified or supplemented from time to time.
"Applicable Law" means all applicable provisions of constitutions,
statutes, laws, rules, treaties, regulations and orders of all Governmental
Authorities and all orders and decrees of all courts and arbitrators.
"Applicable Margin" shall have the meaning assigned thereto in Section
3.1(c).
"Assignment and Acceptance" shall have the meaning assigned thereto in
Section 12.10.
"Base Rate" means, at any time, the higher of (a) the Prime Rate or (b)
the Federal Funds Rate plus 1/2 of 1%; each change in the Base Rate shall take
effect simultaneously with the corresponding change or changes in the Prime Rate
or the Federal Funds Rate.
"Base Rate Loan" means any Loan bearing interest at a rate based upon
the Base Rate as provided in Section 3.1(a).
"Borrowers" means Longhorn Steaks, Inc. and each of its Subsidiaries
that is or becomes a party hereto.
"Business Day" means (a) for all purposes other than as set forth in
clause (b) below, any day other than a Saturday, Sunday or legal holiday on
which banks in Charlotte, North Carolina and New York, New York, are open for
the conduct of their commercial banking business, and (b) with respect to all
notices and determinations in connection with, and payments of principal and
interest on, any LIBOR Rate Loan, any day that is a Business Day described in
clause (a) and that is also a day for trading by and between banks in Dollar
deposits in the London interbank market.
"Capital Asset" means, with respect to Longhorn and its Subsidiaries,
any asset that should, in accordance with GAAP, be classified and accounted for
as a capital asset on a Consolidated balance sheet of Longhorn and its
Subsidiaries.
"Capital Expenditures" means, with respect to Longhorn and its
Subsidiaries for any period, the aggregate cost of all Capital Assets acquired
by Longhorn and its Subsidiaries during such period, as determined in accordance
with GAAP.
2
9
"Capital Lease" means, with respect to Longhorn and its Subsidiaries,
any lease of any property that should, in accordance with GAAP, be classified
and accounted for as a capital lease on a Consolidated balance sheet of Longhorn
and its Subsidiaries.
"Change in Control" shall have the meaning assigned thereto in Section
10.1(i).
"Closing Date" means the date of this Agreement.
"Co-Agent" means Fleet National Bank in its capacity as Co-Agent
hereunder.
"Code" means the Internal Revenue Code of 1986, and the rules and
regulations thereunder, each as amended or supplemented from time to time.
"Commitment" means, as to any Lender, the obligation of such Lender to
make Loans to the Borrowers hereunder in an aggregate principal or face amount
at any time outstanding not to exceed the amount set forth opposite such
Lender's name on Schedule 1 hereto, as the same may be reduced or modified at
any time or from time to time pursuant to the terms hereof.
"Commitment Percentage" means, as to any Lender at any time, the ratio
of (a) the amount of the Commitment of such Lender to (b) the Aggregate
Commitment of all of the Lenders.
"Consolidated" means, when used with reference to financial statements
or financial statement items of Longhorn and its Subsidiaries, such statements
or items on a consolidated basis in accordance with applicable principles of
consolidation under GAAP.
"Contingent Obligation" means, with respect to Longhorn and its
Subsidiaries, without duplication, any obligation, contingent or otherwise, of
any such Person pursuant to which such Person has directly or indirectly
guaranteed any Debt of any other Person and, without limiting the generality of
the foregoing, any obligation, direct or indirect, contingent or otherwise, of
any such Person (a) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Debt (whether arising by virtue of partnership
arrangements, by agreement to keep well, to purchase assets, goods, securities
or services, to take-or-pay, or to maintain financial statement condition or
otherwise) or (b) entered into for the purpose of assuring in any other manner
the obligee of such Debt of the payment thereof or to protect such obligee
against loss in respect thereof (in whole or in part); provided, that the term
Contingent Obligation shall not include
3
10
endorsements for collection or deposit in the ordinary course of business.
Contingent Obligations shall be valued at the full amount of the underlying Debt
guaranteed.
"Credit Facility" means the revolving/term credit facility established
pursuant to Article II hereof.
"Debt" means, with respect to any Person and its Subsidiaries at any
date, the sum, without duplication, of the following calculated in accordance
with GAAP: (a) all liabilities, obligations and indebtedness for borrowed money
including but not limited to obligations evidenced by bonds, debentures, notes
or other similar instruments of any such Person, (b) all obligations to pay the
deferred purchase price of property or services of any such Person (including,
without limitation, all obligations under non-competition agreements), except
trade payables arising in the ordinary course of business not more than 90 days
past due, (c) all obligations of any such Person as lessee under Capital Leases
required under GAAP to be capitalized, (d) all Debt of any other Person secured
by a Lien on any asset of such Person, (e) all Contingent Obligations of any
such Person, (f) all obligations, contingent or otherwise, of any such Person
relative to the undrawn amount of letters of credit and banker's acceptances
issued for the account of any such Person valued at the face amount of such
letters of credit and banker's acceptances, (g) all obligations to redeem,
repurchase, exchange, defease or otherwise make payments in respect of capital
stock or other securities of such Person; provided, that such obligation has
vested and (h) all termination payments which would be due and payable by any
such Person pursuant to Hedging Agreements.
"Default" means any of the events specified in Section 10.1 which with
the passage of time, the giving of notice or any other condition, would
constitute an Event of Default.
"Dollars" or "$" means, unless otherwise qualified, dollars in lawful
currency of the United States.
"EBITDAR" means, with respect to Longhorn and its Subsidiaries for any
period, the sum of (a) Net Income for such period, plus (b) the sum of the
following to the extent deducted in the determination of Net Income: (i) income
and franchise taxes, (ii) Interest Expense, (iii) amortization, depreciation and
other non-cash charges (including amortization of goodwill, transaction
expenses, covenants not to compete and other intangible assets), and (iv) Rental
Expense less (c) any items of gain (or plus any non-cash items of loss) which
were included in determining Net Income and were not realized in the ordinary
4
11
course of business, all determined for such period on a Consolidated basis in
accordance with GAAP.
"EBITR" means, with respect to Longhorn and its Subsidiaries for any
period, the sum of (a) Net Income for such period, plus (b) the sum of the
following to the extent deducted in the determination of Net Income: (i) income
and franchise taxes, (ii) Interest Expense and (iii) Rental Expense less (c) any
items of gain (or plus any non-cash items of loss) which were included in
determining Net Income and were not realized in the ordinary course of business,
all determined for such period on a Consolidated basis in accordance with GAAP.
"Eligible Assignee" means, with respect to any assignment of the
rights, interest and obligations of a Lender hereunder, a Person that is at the
time of such assignment (a) a commercial bank organized under the laws of the
United States or any state thereof, having combined capital and surplus in
excess of $500,000,000, (b) a finance company, insurance company or other
financial institution which in the ordinary course of business extends credit of
the type extended hereunder and that has total assets in excess of
$1,000,000,000, (c) already a Lender hereunder (whether as an original party to
this Agreement or as the assignee of another Lender), (d) the successor (whether
by transfer of assets, merger or otherwise) to all or substantially all of the
commercial lending business of the assigning Lender, or (e) any other Person
that has been approved in writing as an Eligible Assignee by Longhorn and the
Agent.
"Employee Benefit Plan" means any employee benefit plan within the
meaning of Section 3(3) of ERISA which (a) is maintained for employees of any
Borrower or any ERISA Affiliate or (b) has at any time within the preceding six
years been maintained for the employees of any Borrower or any current or former
ERISA Affiliate.
"Environmental Laws" means any and all federal, state and local laws,
statutes, ordinances, rules, regulations, permits, licenses, approvals,
interpretations and orders of courts or Governmental Authorities, relating to
the protection of the environment, including, but not limited to, requirements
pertaining to the use, treatment, storage, disposal, transportation, handling,
reporting, licensing, permitting, investigation or remediation of Hazardous
Materials.
"ERISA" means the Employee Retirement Income Security Act of 1974, and
the rules and regulations thereunder, each as amended or modified from time to
time.
5
12
"ERISA Affiliate" means any Person who together with any Borrower (i)
is treated as a single employer within the meaning of Section 414(b) or (c) of
the Code and (ii) solely for purposes of potential liability under ERISA Section
302(c)(11) and Code Section 412(c)(11) and the lien created under ERISA Section
302(f) or Code Section 412(n), is treated as a single employer within the
meaning of Code Sections 414(b), (c), (m) or (o).
"Eurodollar Reserve Requirements" means, for any day and with respect
to any Lender, the percentage (expressed as a decimal and rounded upwards, if
necessary, to the next higher 1/100th of 1%) which is in effect for such day as
prescribed by the Federal Reserve Board (or any successor) for determining the
actual reserve requirement (including without limitation any basic, supplemental
or emergency reserves) for such Lender in respect of Eurocurrency liabilities as
specified in Regulation D of the Board of Governors of the Federal Reserve
System (or against any other category of liabilities which includes deposits by
reference to which the interest rate on LIBOR Loans is determined).
"Event of Default" means any of the events specified in Section 10.1;
provided, that any requirement for passage of time, giving of notice, or any
other condition, has been satisfied.
"FDIC" means the Federal Deposit Insurance Corporation, or any
successor thereto.
"Federal Funds Rate" means, the rate per annum (rounded upwards, if
necessary, to the next higher 1/100th of 1%) representing the daily effective
federal funds rate as quoted by the Agent and confirmed in Federal Reserve Board
Statistical Release H.15 (519) or any successor or substitute publication
selected by the Agent. If, for any reason, such rate is not available, then
"Federal Funds Rate" shall mean a daily rate which is determined, in the opinion
of the Agent, to be the rate at which federal funds are being offered for sale
in the national federal funds market at 9: 00 a.m. (Charlotte time). Rates for
weekends or holidays shall be the same as the rate for the most immediate
preceding Business Day.
"First Union" means First Union National Bank of Georgia, a national
banking association, and its successors.
"Fiscal Year" means the fiscal year of Longhorn and its Subsidiaries,
ending on the last Sunday of December.
"GAAP" means generally accepted accounting principles, as recognized by
the American Institute of Certified Public Accountants and the Financial
Accounting Standards Board,
6
13
consistently applied and maintained on a consistent basis for Longhorn and its
Subsidiaries throughout the period indicated and consistent with the prior
financial practice of Longhorn and its Subsidiaries.
"Governmental Approvals" means all authorizations, consents, approvals,
licenses and exemptions of, registrations and filings with, and reports to, all
Governmental Authorities.
"Governmental Authority" means any nation, province, state or political
subdivision thereof, and any government or any Person exercising executive,
legislative, regulatory or administrative functions of or pertaining to
government, and any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.
"Hazardous Materials" means any substances or materials (a) which are
or become defined as hazardous wastes, hazardous substances, pollutants,
contaminants, chemical substances or mixtures or toxic substances under any
Environmental Law, (b) which are toxic, explosive, corrosive, flammable,
infectious, radioactive, carcinogenic, mutagenic or otherwise harmful to human
health or the environment and are or become regulated by any Governmental
Authority, (c) the presence of which require investigation or remediation under
any Environmental Law, (d) the discharge or emission or release of which
requires a permit or license under any Environmental Law or other Governmental
Approval, (e) which are materials consisting of underground or aboveground
storage tanks, whether empty, filled or partially filled with any substance, or
(f) which contain asbestos, polychlorinated biphenyls, urea formaldehyde foam
insulation, petroleum hydrocarbons, petroleum derived substances or waste, crude
oil, nuclear fuel, natural gas or synthetic gas.
"Hedging Agreement" means any agreement with respect to an interest
rate swap, collar, cap, floor or a forward rate agreement or other agreement
regarding the hedging of interest rate risk exposure executed in connection with
hedging the interest rate exposure of the Borrowers under this Agreement, and
any confirming letter executed pursuant to such hedging agreement, all as
amended, restated or otherwise modified.
"Interest Expense" means, with respect to Longhorn and its Subsidiaries
for any period, the gross interest expense (including without limitation,
interest expense attributable to Capital Leases and all net obligations pursuant
to Hedging Agreements) of Longhorn and its Subsidiaries, less interest income of
Longhorn and its Subsidiaries, all determined for such period on a Consolidated
basis in accordance with GAAP.
7
14
"Interest Period" shall have the meaning assigned thereto in Section
3.1(b).
"Joinder Agreement" means a Joinder Agreement substantially in the form
of Exhibit H executed by each new Material Subsidiary in accordance with Section
7.12, as amended, restated or otherwise modified.
"Lender" means each Person executing this Agreement as a Lender set
forth on the signature pages hereto (unless such Lender assigns its entire right
and interest hereunder pursuant to Section 12.10) and each Person that hereafter
becomes a party to this Agreement as a Lender pursuant to Section 12.10.
"Lending Office" means, with respect to any Lender, the office of such
Lender maintaining such Lender's Commitment Percentage of the Loans.
"Leverage Ratio" means the ratio calculated pursuant to Section 8.1
hereof.
"LIBOR Rate" means the rate for deposits in Dollars for a period equal
to the Interest Period selected which appears on the Telerate Page 3750 at
approximately 11:00 a.m. London time, two (2) Business Days prior to the
commencement of the applicable Interest Period (rounded upward, if necessary, to
the nearest one-sixteenth of one percent (1/16%)). In the event that such rate
does not appear on Telerate Page 3750, the rate shall be determined by the Agent
to be the arithmetic average (rounded upward, if necessary, to the nearest
one-sixteenth of one percent (1/16%)) of the rate per annum at which Dollars in
the amount of $5,000,000 would be offered to the Agent at approximately 11:00
a.m. London time, two (2) Business Days prior to the commencement of the
applicable Interest Period for settlement in immediately available funds by
leading banks in the London interbank market for a period equal to the Interest
Period selected.
"LIBOR Rate Loan" means any Loan bearing interest at a rate based upon
the LIBOR Rate as provided in Section 3.1(a).
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset.
For the purposes of this Agreement, a Person 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.
"Limited Liability Borrower" shall have the meaning assigned thereto in
Section 2.8.
8
15
"Loan" means any loan made to the Borrowers pursuant to Section 2.1,
and all such Loans collectively as the context requires.
"Loan Documents" means, collectively, this Agreement, the Notes, any
Hedging Agreement between any Borrower and any Lender permitted pursuant to
Section 9.1(b), and each other document, instrument and agreement executed and
delivered by any Borrower or any of their respective Subsidiaries in connection
with this Agreement or otherwise referred to herein or contemplated hereby, all
as may be amended, restated or otherwise modified.
"Material Adverse Effect" means a material adverse effect on (a) the
properties, business, prospects, operations or condition (financial or
otherwise) of the Borrowers and their respective Subsidiaries, taken as a whole,
or (b) the ability of any Borrower or any Subsidiary thereof party to a Loan
Document to perform its obligations under the Loan Documents to which it is a
party.
"Material Contract" means any contract or agreement, written or oral,
of Longhorn or any of its Subsidiaries the failure to comply with which could
reasonably be expected to have a Material Adverse Effect.
"Material Subsidiary" means any Subsidiary of Longhorn with Net
Restaurant Sales in an amount greater than 20% of the Consolidated Net
Restaurant Sales of Longhorn and its Subsidiaries; in each case calculated for
the period of four (4) consecutive fiscal quarters ending on the last day of the
most recently ended fiscal quarter.
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA to which any Borrower or any ERISA Affiliate is making, or
is accruing an obligation to make, contributions within the preceding six years.
"Net Income" means, with respect to Longhorn and its Subsidiaries for
any period, the Consolidated net income (or loss) of Longhorn and its
Subsidiaries for such period determined in accordance with GAAP; provided, that
there shall be excluded from net income (or loss) the income (or loss) of any
Person (other than a Wholly-Owned Subsidiary of such Person) in which such
Person has an ownership interest unless received by such Person in a cash
distribution.
"Net Restaurant Sales" means, with respect to any Person for any
period, net restaurant sales of such Person determined for such period in a
manner consistent with the financial statements
9
16
of the Borrower and its Subsidiaries delivered to the Agent and the Lenders
prior to the Closing Date.
"Net Worth" means, with respect to Longhorn at any date, the
stockholders' equity (including capital stock, additional paid in capital and
retained earnings, after deducting treasury stock) of Longhorn on such date
determined in accordance with GAAP.
"Non-Controlled Joint Venture" shall have the meaning assigned thereto
in Section 8.4.
"Notes" means the separate Revolving Credit Notes made by the Borrowers
payable to the order of each Lender, substantially in the form of Exhibit A
hereto, evidencing the Credit Facility, and any amendments and modifications
thereto, any substitutes therefor, and any replacements, restatements, renewals
or extension thereof, in whole or in part; "Note" means any of such Notes.
"Notice of Account Designation" shall have the meaning assigned thereto
in Section 4.2(e)(i).
"Notice of Borrowing" shall have the meaning assigned thereto in
Section 2.2(a).
"Notice of Conversion/Continuation" shall have the meaning assigned
thereto in Section 3.2.
"Notice of Prepayment" shall have the meaning assigned thereto in
Section 2.3(c).
"Obligations" means, in each case, whether now in existence or
hereafter arising: (a) the principal of and interest on (including interest
accruing after the filing of any bankruptcy or similar petition) the Loans, (b)
all payment and other obligations owing by any Borrower to any Lender or the
Agent under any Hedging Agreement permitted pursuant to Section 9.1 to which a
Lender is a party and (c) all other fees and commissions (including attorney's
fees), charges, indebtedness, loans, liabilities, financial accommodations,
obligations, covenants and duties owing by any Borrower to the Lenders or the
Agent, of every kind, nature and description, direct or indirect, absolute or
contingent, due or to become due, contractual or tortious, liquidated or
unliquidated, and whether or not evidenced by any note, and whether or not for
the payment of money, but only to the extent owing under or in respect of this
Agreement, any Note or any of the other Loan Documents.
"Officer's Compliance Certificate" shall have the meaning assigned
thereto in Section 6.2.
10
17
"Other Taxes" shall have the meaning assigned thereto in Section
3.11(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
agency.
"Pension Plan" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to the provisions of Title IV of ERISA or
Section 412 of the Code and which (a) is maintained for employees of any
Borrower or any ERISA Affiliate or (b) has at any time within the preceding six
years been maintained for the employees of any Borrower or any of their current
or former ERISA Affiliates.
"Person" means an individual, corporation, limited liability company,
partnership, association, trust, business trust, joint venture, joint stock
company, pool, syndicate, sole proprietorship, unincorporated organization,
Governmental Authority or any other form of entity or group thereof.
"Prime Rate" means, at any time, the rate of interest per annum
publicly announced from time to time by First Union as its prime rate. Each
change in the Prime Rate shall be effective as of the opening of business on the
day such change in the Prime Rate occurs. The parties hereto acknowledge that
the rate announced publicly by First Union as its Prime Rate is an index or base
rate and shall not necessarily be its lowest or best rate charged to its
customers or other banks.
"Register" shall have the meaning assigned thereto in Section 12.10(d).
"Rental Expense" means, with respect to Longhorn and its Subsidiaries
for any period, all base rental expenses with respect to operating leases of
Longhorn and its Subsidiaries for such period, determined on a Consolidated
basis in accordance with GAAP.
"Required Lenders" means, at any date, any combination of holders of at
least sixty-six and two-thirds percent (66-2/3%) of the aggregate unpaid
principal amount of the Notes, or if no amounts are outstanding under the Notes,
any combination of Lenders whose Commitment Percentages aggregate at least
sixty-six and two-thirds percent (66-2/3%).
"Revolving Credit Termination Date" means the earliest of the dates
referred to in Section 2.6(a).
"Solvent" means, as to Longhorn and its Subsidiaries on a
11
18
particular date, that any such Person (a) has capital sufficient to carry on its
business and transactions and all business and transactions in which it is about
to engage and is able to pay its debts as they mature, (b) owns property having
a value, both at fair valuation and at present fair saleable value, greater than
the amount required to pay its probable liabilities (including contingencies),
and (c) does not believe that it will incur debts or liabilities beyond its
ability to pay such debts or liabilities as they mature.
"Subordinated Debt" means the collective reference to Debt on Schedule
5.1(t) hereof designated as Subordinated Debt and any other Debt of Longhorn or
any of its Subsidiaries subordinated in right and time of payment to the
Obligations on terms satisfactory to the Required Lenders.
"Subsidiary" means as to any Person, any corporation, partnership or
other entity of which more than fifty percent (50%) of the outstanding capital
stock or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other managers of such corporation,
partnership or other entity is at the time, directly or indirectly, owned by or
the management is otherwise controlled by such Person (irrespective of whether,
at the time, capital stock or other ownership interests of any other class or
classes of such corporation shall have or might have voting power by reason of
the happening of any contingency). Unless otherwise qualified, references to
"Subsidiary" or "Subsidiaries" herein shall refer to those of the Borrowers.
"Taxes" shall have the meaning assigned thereto in Section 3.11(a).
"Termination Event" means: (a) a "Reportable Event" described in
Section 4043 of ERISA, or (b) the withdrawal of any Borrower or any ERISA
Affiliate from a Pension Plan during a plan year in which it was a "substantial
employer" as defined in Section 4001(a)(2) of ERISA, or (c) the termination of a
Pension Plan, the filing of a notice of intent to terminate a Pension Plan or
the treatment of a Pension Plan amendment as a termination under Section 4041 of
ERISA, or (d) the institution of proceedings to terminate, or the appointment of
a trustee with respect to, any Pension Plan by the PBGC, or (e) any other event
or condition which would constitute grounds under Section 4042(a) of ERISA for
the termination of, or the appointment of a trustee to administer, any Pension
Plan, or (f) the partial or complete withdrawal of any Borrower or any ERISA
Affiliate from a Multiemployer Plan, or (g) the imposition of a Lien pursuant to
Section 412 of the Code or Section 302 of ERISA, or (h) any event or condition
which results in the reorganization or insolvency of
12
19
a Multiemployer Plan under Sections 4241 or 4245 of ERISA, or (i) any event or
condition which results in the termination of a Multiemployer Plan under Section
4041A of ERISA or the institution by PBGC of proceedings to terminate a
Multiemployer Plan under Section 4042 of ERISA.
"Term-Out Amount" shall have the meaning assigned thereto in Section
2.6(b).
"Term-Out Maturity Date" means December 18, 2001
"Total Capital" means, as of any date, the sum of Net Worth as of such
date plus the Consolidated Debt of Longhorn and its Subsidiaries as of such
date.
"United States" means the United States of America.
"Wholly-Owned" means, with respect to a Subsidiary, a Subsidiary all of
the shares of capital stock or other ownership interests of which are, directly
or indirectly, owned or controlled by Longhorn and/or one or more of its
Wholly-Owned Subsidiaries.
SECTION 1.2 General. Unless otherwise specified, a reference in
this Agreement to a particular section, subsection, Schedule or Exhibit is a
reference to that section, subsection, Schedule or Exhibit of this Agreement.
Wherever from the context it appears appropriate, each term stated in either the
singular or plural shall include the singular and plural, and pronouns stated in
the masculine, feminine or neuter gender shall include the masculine, the
feminine and the neuter. Any reference herein to "Charlotte time" shall refer to
the applicable time of day in Charlotte, North Carolina.
SECTION 1.3 Other Definitions and Provisions.
(a) Use of Capitalized Terms. Unless otherwise defined therein, all
capitalized terms defined in this Agreement shall have the defined meanings when
used in this Agreement, the Notes and the other Loan Documents or any
certificate, report or other document made or delivered pursuant to this
Agreement.
(b) Miscellaneous. The words "hereof", "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement.
13
20
ARTICLE II
REVOLVING CREDIT/TERM FACILITY
SECTION 2.1 Credit Loans. Subject to the terms and conditions of this
Agreement, each Lender severally agrees to make Loans to the Borrowers from
time to time from the Closing Date through the Revolving Credit Termination
Date as requested by the Borrowers in accordance with the terms of Section 2.2;
provided, that (a) the aggregate principal amount of all outstanding Loans
(after giving effect to any amount requested) shall not exceed the Aggregate
Commitment and (b) the principal amount of outstanding Loans from any Lender to
the Borrowers shall not at any time exceed such Lender's Commitment. Each Loan
by a Lender shall be in a principal amount equal to such Lender's Commitment
Percentage of the aggregate principal amount of Loans requested on such
occasion. Subject to the terms and conditions hereof, the Borrowers may borrow,
repay and reborrow Loans hereunder until the Revolving Credit Termination Date.
SECTION 2.2 Procedure for Advances of Loans.
(a) Requests for Borrowing. Longhorn, on behalf of the Borrowers, shall
give the Agent irrevocable prior written notice (or telephonic notice, confirmed
in writing), such written notice or written confirmation to be in the form
attached hereto as Exhibit B (a "Notice of Borrowing") not later than 11:00 a.m.
(Charlotte time) (i) one Business Day before each Base Rate Loan and (ii) at
least three (3) Business Days before each LIBOR Rate Loan, of its intention to
borrow, specifying (A) the date of such borrowing, which shall be a Business
Day, (B) the amount of such borrowing, which shall be (x) with respect to Base
Rate Loans in an aggregate principal amount of $500,000 or a whole multiple of
$100,000 in excess thereof and (y) with respect to LIBOR Rate Loans in an
aggregate principal amount of $1,000,000 or a whole multiple of $500,000 in
excess thereof, (C) whether the Loans are to be LIBOR Rate Loans or Base Rate
Loans, and (D) in the case of a LIBOR Rate Loan, the duration of the Interest
Period applicable thereto. Notices received after 11:00 a.m. (Charlotte time)
shall be deemed received on the next Business Day. The Agent shall promptly
notify the Lenders of each Notice of Borrowing.
(b) Disbursement of Loans. Not later than 2:00 p.m. (Charlotte time) on
the proposed borrowing date, each Lender will make available to the Agent, for
the account of the Borrowers, at the office of the Agent in funds immediately
available to the Agent, such Lender's Commitment Percentage of the Loans to be
made on such borrowing date. The Borrowers hereby irrevocably authorize the
Agent to disburse the proceeds of each borrowing requested pursuant to this
Section 2.2 in immediately available funds by crediting such proceeds to a
deposit account of Longhorn maintained with the Agent or by wire transfer to
such account as may be agreed upon by Longhorn and the Agent from time to time.
14
21
Subject to Section 3.7 hereof, the Agent shall not be obligated to disburse the
portion of the proceeds of any Loan requested pursuant to this Section 2.2 to
the extent that any Lender has not made available to the Agent its Commitment
Percentage of such Loan.
SECTION 2.3 Repayment of Loans.
(a) Repayment on Termination Date. The Borrowers shall repay the
outstanding principal amount of all Loans in full, together with all accrued but
unpaid interest thereon, on the Revolving Credit Termination Date, or, if the
election is made pursuant to Section 2.6, on the Term-Out Maturity Date.
(b) Mandatory Repayment of Excess Loans. If at any time the outstanding
principal amount of all Loans exceeds the Aggregate Commitment, the Borrowers
shall repay immediately upon notice from the Agent, by payment to the Agent for
the account of the Lenders, the Loans in an amount equal to such excess. Each
such repayment shall be accompanied by any amount required to be paid pursuant
to Section 3.9 hereof.
(c) Optional Repayments. The Borrowers may at any time and from time to
time repay the Loans, in whole or in part, upon at least three (3) Business
Days' irrevocable notice to the Agent with respect to LIBOR Rate Loans and one
(1) Business Day irrevocable notice with respect to Base Rate Loans, in the form
attached hereto as Exhibit C (a "Notice of Prepayment") specifying the date and
amount of repayment and whether the repayment is of LIBOR Rate Loans, Base Rate
Loans, or a combination thereof, and, if of a combination thereof, the amount
allocable to each. Upon receipt of such notice, the Agent shall promptly notify
each Lender. If any such notice is given, the amount specified in such notice
shall be due and payable on the date set forth in such notice. Partial
repayments shall be in an aggregate amount of $500,000 or a whole multiple of
$100,000 in excess thereof with respect to Base Rate Loans and $1,000,000 or a
whole multiple of $500,000 in excess thereof with respect to LIBOR Rate Loans.
Each such repayment shall be accompanied by any amount required to be paid
pursuant to Section 3.9 hereof.
(d) Limitation on Repayment of LIBOR Rate Loans. The Borrowers may not
repay any LIBOR Rate Loan on any day other than on the last day of the Interest
Period applicable thereto unless such repayment is accompanied by any amount
required to be paid pursuant to Section 3.9 hereof.
SECTION 2.4 Notes. Each Lender's Loans and the obligation of the
Borrowers to repay such Loans shall be evidenced by a Note executed by the
Borrowers existing on the
15
22
Closing Date payable to the order of such Lender representing the Borrowers'
obligation to pay such Lender's Commitment or, if less, the aggregate unpaid
principal amount of all Loans made and to be made by such Lender to the
Borrowers hereunder, plus interest and all other fees, charges and other amounts
due thereon. Each Note shall be dated the date hereof and shall bear interest on
the unpaid principal amount thereof at the applicable interest rate per annum
specified in Section 3.1.
SECTION 2.5 Permanent Reduction of the Aggregate Commitment.
(a) The Borrowers shall have the right at any time and from time to
time, upon at least five (5) Business Days prior written notice to the Agent, to
permanently reduce, in whole at any time or in part from time to time, without
premium or penalty, the Aggregate Commitment in an aggregate principal amount
not less than $1,000,000 or any whole multiple of $500,000 in excess thereof.
(b) Each permanent reduction permitted pursuant to this Section 2.5
shall be accompanied by a payment of principal sufficient to reduce the
aggregate outstanding Loans of the Lenders after such reduction to the Aggregate
Commitment as so reduced. Any reduction of the Aggregate Commitment to zero
shall be accompanied by payment of all outstanding Obligations and, if such
reduction is permanent, termination of the Commitments and Credit Facility. If
the reduction of the Aggregate Commitment requires the repayment of any LIBOR
Rate Loan, such reduction may be made only on the last day of the then current
Interest Period applicable thereto unless such repayment is accompanied by any
amount required to be paid pursuant to Section 3.9 hereof.
SECTION 2.6. Termination of Credit Facility; Term-Out of Loans.
(a) The Credit Facility shall terminate on the earliest of (i) December
18, 1999, (ii) the date of permanent reduction of the Aggregate Commitment in
whole pursuant to Section 2.5 and (iii) the date of termination by the Agent on
behalf of the Lenders pursuant to Section 10.2(a).
(b) Upon the date set forth in Section 2.6(a)(i) above, so long as each
condition set forth in Section 4.3 hereof has been satisfied as of such date,
Longhorn, on behalf of the Borrowers, may elect to term out the aggregate
principal balance of Loans then outstanding (the "Term-Out Amount"). If
Longhorn, on behalf of the Borrowers, so elects, the Term-Out Amount shall be
payable in eight (8) equal consecutive quarterly principal installments,
commencing on March 31, 2000 and continuing on the last Business
16
23
Day of each calendar quarter thereafter. On the Term-Out Maturity Date, all
outstanding principal of the Loans, together with all accrued but unpaid
interest thereon, shall be due and payable in full.
SECTION 2.7 Use of Proceeds. The Borrowers shall use the proceeds of
the Loans (a) to finance acquisitions permitted hereunder and (b) for working
capital and general corporate requirements of the Borrowers and their
Subsidiaries, including the payment of certain fees and expenses incurred in
connection with the transactions.
SECTION 2.8 Limitation of Liability. The Obligations of the Borrowers
under this Agreement and the Notes shall be joint and several; provided, that
the Obligations of any non-Wholly-Owned Subsidiary which is a Borrower (a
"Limited Liability Borrower") shall be limited to an amount equal to (a) the
aggregate proceeds of the Loans received by such Limited Liability Borrower,
directly or indirectly through an advance by Longhorn or another Borrower plus
(b) the aggregate interest of Longhorn in the capital and profits of such
Limited Liability Borrower. Notwithstanding any other provision of this
Agreement or any other Loan Document to the contrary, no Person (other than
Longhorn or any of its Subsidiaries) that is a general partner or otherwise
owns any equity interest in any Limited Liability Borrower (such Person
referred to as a "Non-Recourse Partner") shall have any liability or other
obligation whatsoever with respect to any of the Obligations if (i) such
Non-Recourse Partner owns 25% or less of the total equity ownership interest in
such Limited Liability Borrower or (ii) such Non-Recourse Partner has made
capital contributions to such Limited Liability Borrower at least pro rata in
accordance with its respective equity ownership interest in such Limited
Liability Borrower. If a Non-Recourse Partner shall not satisfy both of the
conditions specified in the immediately preceding clauses (i) and (ii), then
the Obligations of such Non-Recourse Partner shall be limited to an amount
equal to the amount of the capital contribution required to be made by such
Non-Recourse Partner so that its capital contributions shall be at least pro
rata in accordance with its respective equity ownership interest in such
Limited Liability Borrower.
SECTION 2.9 Agreements for Contribution.
(a) To the extent any Borrower is required, by reason of its
Obligations hereunder, to pay to the Agent and the Lenders an amount greater
than the amount of Loans actually made available to or for the benefit of such
Borrower, such Borrower shall have an enforceable right of contribution against
the remaining Borrowers, and the remaining Borrowers shall be jointly and
17
24
severally liable (subject to the limitations set forth in subsection (e) below),
for repayment of the full amount of such excess payment. Subject only to the
subordination provided in the following subsection (d), such Borrower further
shall be subrogated to any and all rights of the Agent and the Lenders against
the remaining Borrowers to the extent of such excess payment.
(b) To the extent that any Borrower would, but for the operation of
this Section 2.9 and by reason of its Obligations hereunder or its obligations
to other Borrowers under this Section 2.9, be rendered insolvent for any purpose
under Applicable Law, each of the Borrowers hereby agrees (subject to the
limitations set forth in subsection (e) below) to indemnify such Borrower and
commits to make a contribution to such Borrower's capital in an amount at least
equal to the amount necessary to prevent such Borrower from having been rendered
insolvent by reason of the incurring of any such obligations.
(c) To the extent that any Borrower would, but for the operation of
this Section 2.9, be rendered insolvent under any Applicable Law by reason of
its incurring of obligations to any other Borrower under the foregoing
subsections (a) and (b) above, such Borrower shall, in turn, have rights of
contribution and indemnity, to the full extent provided in the foregoing
subsections (a) and (b) above, against the remaining Borrowers, such that all
Obligations of all of the Borrowers hereunder and under this Section 2.9 shall
be allocated in a manner such that no Borrower shall be rendered insolvent for
any purpose under Applicable Law by reason of its incurring of such obligations.
(d) The rights of any Borrower to contribution, subrogation and
indemnity under this Section 2.9 or under Applicable Law shall in all events and
all respects be subject and subordinate to the rights of the Agent and the
Lenders under this Agreement and subject to the prior full, final and
indefeasible payment to the Agent and the Lenders of all Obligations and no such
right may be exercised until all of such Obligations have been fully, finally
and indefeasibly paid and such payments are in no event subject to avoidance
under Title 11 of the United States Code or any other Applicable Law.
(e) Notwithstanding anything to the contrary set forth in this Section
2.9, no Limited Liability Borrower shall have any obligation of contribution or
indemnity to any other Borrower pursuant to this Section 2.9 in an amount
greater than such Limited Liability Borrower's Obligations as limited pursuant
to Section 2.8.
18
25
ARTICLE III
GENERAL LOAN PROVISIONS
SECTION 3.1 Interest.
(a) Interest Rate Options. Subject to the provisions of this Section
3.1, at the election of Longhorn, on behalf of the Borrowers, the aggregate
principal balance of the Notes or any portion thereof shall bear interest at the
Base Rate or the LIBOR Rate plus, in each case, the Applicable Margin as set
forth below; provided, that the LIBOR Rate shall not be available until three
(3) Business Days after the Closing Date. Longhorn, on behalf of the Borrowers,
shall select the rate of interest and Interest Period, if any, applicable to any
Loan at the time a Notice of Borrowing is given pursuant to Section 2.2 or at
the time a Notice of Conversion/Continuation is given pursuant to Section 3.2.
Each Loan or portion thereof bearing interest based on the Base Rate shall be a
"Base Rate Loan" and each Loan or portion thereof bearing interest based on the
LIBOR Rate shall be a "LIBOR Rate Loan". Any Loan or any portion thereof as to
which Longhorn, on behalf of the Borrowers, has not duly specified an interest
rate as provided herein shall be deemed a Base Rate Loan.
(b) Interest Periods. In connection with each LIBOR Rate Loan,
Longhorn, on behalf of the Borrowers, by giving notice at the times described in
Section 3.1(a), shall elect an interest period (each, an "Interest Period") to
be applicable to such Loan, which Interest Period shall be a period of one (1),
two (2), three (3), or six (6) months; provided, that:
(i) the Interest Period shall commence on the date of advance of
or conversion to any LIBOR Rate Loan and, in the case of immediately successive
Interest Periods, each successive Interest Period shall commence on the date on
which the next preceding Interest Period expires;
(ii) if any Interest Period would otherwise expire on a day that
is not a Business Day, such Interest Period shall expire on the next succeeding
Business Day; provided, that if any Interest Period with respect to a LIBOR Rate
Loan would otherwise expire on a day that is not a Business Day but is a day of
the month after which no further Business Day occurs in such month, such
Interest Period shall expire on the next preceding Business Day;
(iii) any Interest Period with respect to a LIBOR Rate Loan that
begins on the last Business Day of a calendar month (or on a day for which there
is no numerically corresponding day in
19
26
the calendar month at the end of such Interest Period) shall end on the last
Business Day of the relevant calendar month at the end of such Interest Period;
(iv) no Interest Period shall extend beyond the Revolving Credit
Termination Date; provided, that if the Borrowers elect to term out the Loans
pursuant to Section 2.6(b), Interest Periods with respect to the Term-Out Amount
may be extended beyond the Revolving Credit Termination Date, so long as such
Interest Periods shall not extend beyond the Term-Out Maturity Date; and
(v) there shall be no more than five (5) Interest Periods
outstanding at any time.
(c)Applicable Margin. The Applicable Margin provided for in
Section 3.1(a) with respect to the Loans (the "Applicable Margin") shall:
(i) for the period commencing on the Closing Date and ending on
the date immediately preceding the initial Adjustment Date (as
hereinafter defined) following the delivery of the financial
statements for the fiscal quarter ending September 29, 1996 and
the accompanying Officer's Compliance Certificate, be 0.75% in the
case of LIBOR Rate Loans and 0.00% in the case of Base Rate Loans;
(ii) for the period commencing on the initial Adjustment Date
following delivery of the financial statements for the fiscal
quarter ending September 29, 1996 and the accompanying Officer's
Compliance Certificate and ending on the Revolving Credit
Termination Date, be determined by reference to the Leverage Ratio
in accordance with the following chart:
Applicable Margin Per Annum
Leverage Ratio Base Rate + LIBOR Rate +
-------------- ----------------------------
greater than or
equal to 2.75 0.00% 1.25%
greater than or
equal to 2.25 but less
than 2.75 0.00% 1.00%
less than 2.25 0.00% 0.75%
(iii) for the period commencing on the Revolving Credit
Termination Date and ending on the Term-Out Maturity Date,
20
27
be equal to the sum of (A) the rate determined by reference to the
Leverage Ratio in accordance with the chart above plus (B) 0.25%.
Adjustments, if any, in the Applicable Margin shall be made by the Agent on the
tenth (10th) Business Day (the "Adjustment Date") after receipt by the Agent of
financial statements for Longhorn and its Subsidiaries delivered under Section
6.1(a) or (b), as applicable, and the accompanying Officer's Compliance
Certificate setting forth the Leverage Ratio of Longhorn and its Subsidiaries as
of the most recent fiscal quarter end. The Agent agrees to give the Borrowers
and the Lenders notice of any adjustment in the Applicable Margin within two (2)
Business Days of such adjustment; provided, that the Agent's failure to give
such notice shall not result in any liability to the Agent or in any way effect
the validity of any such adjustment. In the event Longhorn fails to deliver such
financial statements and certificate within the time required by Sections 6.1(a)
and 6.2 hereof, the Applicable Margin shall be the highest Applicable Margin set
forth above until the delivery of such financial statements and certificate
unless at such time the outstanding principal balance of the Loans are bearing
interest at the "default rate" set forth in Section 3.1(d) below in which case
the Applicable Margin shall not be increased pursuant to this sentence.
(d) Default Rate. Upon the occurrence and during the continuance of an
Event of Default, (i) the Borrowers shall no longer have the option to request
LIBOR Rate Loans, (ii) all outstanding LIBOR Rate Loans shall bear interest at a
rate per annum two percent (2%) in excess of the rate then applicable to LIBOR
Rate Loans until the end of the applicable Interest Period and thereafter at a
rate equal to two percent (2%) in excess of the rate then applicable to Base
Rate Loans, and (iii) all outstanding Base Rate Loans shall bear interest at a
rate per annum equal to two percent (2%) in excess of the rate then applicable
to Base Rate Loans. Interest shall continue to accrue on the Notes after the
filing by or against any Borrower of any petition seeking any relief in
bankruptcy or under any act or law pertaining to insolvency or debtor relief,
whether state, federal or foreign.
(e) Interest Payment and Computation. Accrued and unpaid interest on
each Base Rate Loan shall be payable in arrears on the last Business Day of each
calendar quarter commencing March 31, 1997; accrued and unpaid interest on each
LIBOR Rate Loan shall be payable on the last day of each Interest Period
applicable thereto, and if such Interest Period extends over three (3) months,
at the end of each three (3) month interval during such Interest Period. All
interest rates, fees and
21
28
commissions provided hereunder shall be computed on the basis of a 360-day year
and assessed for the actual number of days elapsed.
(f) Maximum Rate. In no contingency or event whatsoever shall the
aggregate of all amounts deemed interest hereunder or under any of the Notes
charged or collected pursuant to the terms of this Agreement or pursuant to any
of the Notes exceed the highest rate permissible under any Applicable Law which
a court of competent jurisdiction shall, in a final determination, deem
applicable hereto. In the event that such a court determines that the Lenders
have charged or received interest hereunder in excess of the highest applicable
rate, the rate in effect hereunder shall automatically be reduced to the maximum
rate permitted by Applicable Law and the Lenders shall at the Agent's option
promptly refund to the Borrowers any interest received by Lenders in excess of
the maximum lawful rate or shall apply such excess to the principal balance of
the Obligations. It is the intent hereof that the Borrowers not pay or contract
to pay, and that neither the Agent nor any Lender receive or contract to
receive, directly or indirectly in any manner whatsoever, interest in excess of
that which may be paid by the Borrowers under Applicable Law.
SECTION 3.2 Notice and Manner of Conversion or Continuation of Loans.
Provided that no Event of Default has occurred and is then continuing, the
Borrowers shall have the option to (a) convert at any time all or any portion
of their outstanding Base Rate Loans in an aggregate principal amount equal to
$1,000,000 or any whole multiple of $500,000 in excess thereof into one or more
LIBOR Rate Loans or (b) upon the expiration of any Interest Period, (i) convert
all or any part of their outstanding LIBOR Rate Loans in an aggregate principal
amount equal to $500,000 or a whole multiple of $100,000 in excess thereof into
Base Rate Loans or (ii) continue such LIBOR Rate Loans as LIBOR Rate Loans.
Whenever the Borrowers desire to convert or continue Loans as provided above,
Longhorn, on behalf of the Borrowers, shall give the Agent irrevocable prior
written notice in the form attached as Exhibit D (a "Notice of Conversion/
Continuation") not later than 11:00 a.m. (Charlotte time) three (3) Business
Days before the day on which a proposed conversion or continuation of such Loan
is to be effective specifying (A) the Loans to be converted or continued, and,
in the case of any LIBOR Rate Loan to be converted or continued, the last day
of the Interest Period thereof, (B) the effective date of such conversion or
continuation (which shall be a Business Day), (C) the principal amount of such
Loans to be converted or continued, and (D) the Interest Period to be
applicable to such converted or continued LIBOR Rate Loan. The Agent shall
promptly notify the Lenders of such Notice of Conversion/Continuation.
22
29
SECTION 3.3 Fees.
(a) Commitment Fee. Commencing on the Closing Date, the Borrowers shall
pay to the Agent, for the account of the Lenders, a non-refundable commitment
fee at a rate per annum equal to 0.25% on the average daily unused portion of
the Aggregate Commitment. The commitment fee shall be payable in arrears on the
last Business Day of each calendar quarter during the term of this Agreement
commencing March 31, 1997 and on the Revolving Credit Termination Date. Such
commitment fee shall be distributed by the Agent to the Lenders pro rata in
accordance with the Lenders' respective Commitment Percentages.
(b) Agent's and Other Fees. In order to compensate the Agent for
structuring and syndicating the Loans and for its obligations hereunder, the
Borrowers agree to pay to the Agent, for its account, the fees set forth in the
separate fee letter agreement executed by Longhorn dated October 30, 1996.
SECTION 3.4 Manner of Payment. Each payment by the Borrowers on
account of the principal of or interest on the Loans or of any fee, commission
or other amounts payable to the Lenders under this Agreement or any Note shall
be made not later than 1:00 p.m. (Charlotte time) on the date specified for
payment under this Agreement to the Agent at the Agent's Office for the account
of the Lenders (other than as set forth below) pro rata in accordance with
their respective Commitment Percentages, in Dollars, in immediately available
funds and shall be made without any set-off, counterclaim or deduction
whatsoever. Any payment received after such time but before 2:00 p.m.
(Charlotte time) on such day shall be deemed a payment on such date for the
purposes of Section 10.1, but for all other purposes shall be deemed to have
been made on the next succeeding Business Day. Any payment received after 2:00
p.m. (Charlotte time) shall be deemed to have been made on the next succeeding
Business Day for all purposes. Upon receipt by the Agent of each such payment,
the Agent shall distribute to each Lender at its address for notices set forth
herein its pro rata share of such payment in accordance with such Lender's
Commitment Percentage and shall wire advice of the amount of such credit to
each Lender. Each payment to the Agent of Agent's fees or expenses shall be
made for the account of the Agent and any amount payable to any Lender under
Sections 3.8, 3.9, 3.10, 3.11 or 12.2 shall be paid to the Agent for the
account of the applicable Lender. Other than as set forth in Section 3.1(b), if
the due date of any payment under this Agreement or any other Loan Document
would otherwise fall on a day which is not a Business Day such date shall be
extended to the next succeeding Business Day and interest shall be payable for
the period of such extension.
23
30
SECTION 3.5 Crediting of Payments and Proceeds. In the event that the
Borrowers shall fail to pay any of the Obligations when due and the Obligations
have been accelerated pursuant to Section 10.2, all payments received by the
Lenders upon the Notes and the other Obligations and all net proceeds from the
enforcement of the Obligations shall be applied first to all expenses then due
and payable by the Borrowers hereunder, then to all indemnity obligations then
due and payable by the Borrowers hereunder, then to all Agent's fees then due
and payable, then to all commitment and other fees and commissions then due and
payable, then to accrued and unpaid interest on the Notes and any termination
payments due in respect of a Hedging Agreement with any Lender permitted
pursuant to Section 9.1 (pro rata in accordance with all such amounts due) and
then to the principal amount of the Notes.
SECTION 3.6 Adjustments. If any Lender (a "Benefitted Lender") shall
at any time receive any payment of all or part of its Loans or interest
thereon, or if any Lender shall at any time receive any collateral in respect
to its Loans (whether voluntarily or involuntarily, by setoff or otherwise) in
a greater proportion than any such payment to and collateral received by any
other Lender, if any, in respect of such other Lender's Loans, or interest
thereon, such Benefitted Lender shall purchase for cash from the other Lenders
such portion of each such other Lender's Loans, or shall provide such other
Lenders with the benefits of any such collateral, or the proceeds thereof, as
shall be necessary to cause such Benefitted Lender to share the excess payment
or benefits of such collateral or proceeds ratably with each of the Lenders;
provided, that if all or any portion of such excess payment or benefits is
thereafter recovered from such Benefitted Lender, such purchase shall be
rescinded, and the purchase price and benefits returned to the extent of such
recovery, but without interest. The Borrowers agree that each Lender so
purchasing a portion of another Lender's Loans may exercise all rights of
payment (including, without limitation, rights of set-off) with respect to such
portion as fully as if such Lender were the direct holder of such portion.
SECTION 3.7 Nature of Obligations of Lenders Regarding Loans;
Assumption by the Agent. The obligations of the Lenders under this Agreement to
make the Loans are several and are not joint or joint and several. Unless the
Agent shall have received notice from a Lender prior to a proposed borrowing
date that such Lender will not make available to the Agent such Lender's ratable
portion of the amount to be borrowed on such date (which notice shall not
release such Lender of its obligations hereunder), the Agent may assume that
such Lender has made such portion available
24
31
to the Agent on the proposed borrowing date in accordance with Section 2.2(b)
and the Agent may, in reliance upon such assumption, make available to the
Borrowers on such date a corresponding amount. If such amount is made available
to the Agent on a date after such borrowing date, such Lender shall pay to the
Agent on demand an amount, until paid, equal to the product of (a) the amount of
such Lender's Commitment Percentage of such borrowing, times (b) the daily
average Federal Funds Rate during such period as determined by the Agent, times
(c) a fraction the numerator of which is the number of days that elapse from and
including such borrowing date to the date on which such Lender's Commitment
Percentage of such borrowing shall have become immediately available to the
Agent and the denominator of which is 360. A certificate of the Agent with
respect to any amounts owing under this Section shall be conclusive, absent
manifest error. If such Lender's Commitment Percentage of such borrowing is not
made available to the Agent by such Lender within three (3) Business Days of
such borrowing date, the Agent shall be entitled to recover such amount made
available by the Agent with interest thereon at the rate per annum applicable to
Base Rate Loans hereunder, on demand, from the Borrowers. The failure of any
Lender to make its Commitment Percentage of any Loan available shall not relieve
it or any other Lender of its obligation, if any, hereunder to make its
Commitment Percentage of such Loan available on such borrowing date, but no
Lender shall be responsible for the failure of any other Lender to make its
Commitment Percentage of such Loan available on the borrowing date.
SECTION 3.8 Changed Circumstances.
(a) Circumstances Affecting LIBOR Rate Availability. If with respect to
any Interest Period the Agent shall reasonably determine that, by reason of
circumstances affecting the foreign exchange and interbank markets generally,
deposits in eurodollars, in the applicable amounts are not being quoted via
Telerate Page 3750 or offered to the Agent or any Lender for such Interest
Period, then the Agent shall forthwith give notice thereof to the Borrowers.
Thereafter, until the Agent notifies the Borrowers that such circumstances no
longer exist (which the Agent agrees to do; provided, that the Agent shall have
no liability for any failure to do so), the obligation of the Lenders to make
LIBOR Rate Loans and the right of the Borrowers to convert any Loan to or
continue any Loan as a LIBOR Rate Loan shall be suspended, and the Borrowers
shall repay in full (or cause to be repaid in full) the then outstanding
principal amount of each such LIBOR Rate Loans together with accrued interest
thereon, on the last day of the then current Interest Period applicable to such
LIBOR Rate Loan or convert the then
25
32
outstanding principal amount of each such LIBOR Rate Loan to a Base Rate Loan as
of the last day of such Interest Period.
(b) Laws Affecting LIBOR Rate Availability. If, after the date hereof,
the introduction of, or any change in, any Applicable Law 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, or compliance by any Lender (or any of their respective Lending
Offices) with any request or directive (whether or not having the force of law)
of any such Governmental Authority, central bank or comparable agency, shall
make it unlawful or impossible for any of the Lenders (or any of their
respective Lending Offices) to honor its obligations hereunder to make or
maintain any LIBOR Rate Loan, such Lender shall promptly give notice thereof to
the Agent and the Agent shall promptly give notice to the Borrowers and the
other Lenders. Thereafter, until the Agent notifies the Borrowers that such
circumstances no longer exist (which the Agent agrees to do; provided, that the
Agent shall have no liability for any failure to do so), (i) the obligations of
the Lenders to make LIBOR Rate Loans and the right of the Borrowers to convert
any Loan or continue any Loan as a LIBOR Rate Loan shall be suspended and
thereafter the Borrowers may select only Base Rate Loans hereunder, and (ii) if
any of the Lenders may not lawfully continue to maintain a LIBOR Rate Loan to
the end of the then current Interest Period applicable thereto as a LIBOR Rate
Loan, the applicable LIBOR Rate Loan shall immediately be converted to a Base
Rate Loan for the remainder of such Interest Period.
(c) Increased Costs. If, after the date hereof, the introduction of, or
any change in, any Applicable Law, or in the interpretation or administration
thereof by any Governmental Authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by any of the
Lenders (or any of their respective Lending Offices) with any request or
directive (whether or not having the force of law) of such Governmental
Authority, central bank or comparable agency:
(i) shall subject any of the Lenders (or any of their respective
Lending Offices) to any tax, duty or other charge with respect to any Note or
shall change the basis of taxation of payments to any of the Lenders (or any of
their respective Lending Offices) of the principal of or interest on any Note or
any other amounts due under this Agreement in respect thereof (except for
changes in the rate of or additional taxes imposed on or measured by the overall
net income of any of the Lenders or any of their respective Lending Offices
imposed by the jurisdiction in which such Lender is organized or is or should be
qualified to do business or such Lending Office is located); or
26
33
(ii) shall impose, modify or deem applicable any reserve
(including, without limitation, any imposed by the Board of Governors of the
Federal Reserve System but excluding any such reserve included in the definition
of Eurodollar Reserve Requirements), special deposit, insurance or capital or
similar requirement against assets of, deposits with or for the account of, or
credit extended by any of the Lenders (or any of their respective Lending
Offices) or shall impose on any of the Lenders (or any of their respective
Lending Offices) or the foreign exchange and interbank markets any other
condition affecting any Note;
and the result of any of the foregoing is to increase the costs to any of the
Lenders of maintaining any LIBOR Rate Loan or to reduce the yield or amount of
any sum received or receivable by any of the Lenders under this Agreement or
under the Notes in respect of a LIBOR Rate Loan, then such Lender shall promptly
notify the Agent, and the Agent shall promptly notify the Borrowers of such fact
and demand compensation therefor and, within fifteen (15) days after such notice
by the Agent, the Borrowers shall pay to such Lender such additional amount or
amounts as will compensate such Lender or Lenders for such increased cost or
reduction. Each Lender agrees to notify the Borrowers of any event occurring
after the Closing Date entitling such Lender to compensation under any of the
preceding subsections of this Section as promptly as practicable; provided, that
except as otherwise limited by the next sentence, the failure of any Lender to
give such notice shall not result in any liability to such Lender or release the
Borrowers from any of their obligations hereunder. A Lender shall only be
entitled to compensation under any of the preceding subsections of this Section
for events occurring during the 120-day period ending on the date the Borrowers
receive the notice described in the immediately preceding sentence. Such Lender
agrees to furnish to the Borrowers a certificate setting forth the basis and
amount of each request by such Lender for compensation under this Section, which
certificate shall be prima facie evidence of the matters stated therein.
Determinations by any Lender of the effect of any of the events described in
this subsection shall be made on a reasonable basis and in good faith, based
upon the assumption that such Lender funded its Commitment Percentage of the
LIBOR Rate Loans in the London interbank market, and using any reasonable
attribution or averaging methods which such Lender deems appropriate and
practical.
(d) Eurodollar Reserve Requirements. In the event that any Lender shall
determine at any time that by reason of Regulation D, such Lender is required to
maintain Eurodollar Reserve Requirements during any period that it has any LIBOR
Rate Loans
27
34
outstanding, then such Lender shall promptly notify the Borrowers by written
notice (or telephonic notice promptly confirmed in writing) specifying the
additional amounts reasonably determined by the Lender to be required to
indemnify such Lender against the cost of maintaining such Eurodollar Reserve
Requirements (such written notice to provide a computation of such additional
amounts) and the Borrowers shall directly pay to such Lender such specified
amounts as additional interest.
SECTION 3.9 Indemnity. The Borrowers hereby indemnify each of the
Lenders against any loss or expense which may arise or be attributable to each
Lender's obtaining, liquidating or employing deposits or other funds acquired
to effect, fund or maintain any Loan (a) as a consequence of any failure by the
Borrowers to make any payment when due of any amount due hereunder in
connection with a LIBOR Rate Loan, (b) due to any failure of the Borrowers to
borrow on a date specified therefor in a Notice of Borrowing or Notice of
Continuation/Conversion or (c) due to any payment, prepayment or conversion of
any LIBOR Rate Loan on a date other than the last day of the Interest Period
therefor other than as a result of Section 3.8(b)(ii). Any Lender requesting
indemnification under this Section shall furnish to the Borrowers a certificate
setting forth the basis and amount of such request, which certificate shall be
prima facie evidence of the matters stated therein. Determinations by any
Lender of the amount of any claim for indemnification under this Section shall
be made on a reasonable basis and in good faith, based upon the assumption that
such Lender funded its Commitment Percentage of the LIBOR Rate Loans in the
London interbank market, and using any reasonable attribution or averaging
methods which such Lender deems appropriate and practical.
SECTION 3.10 Capital Requirements. If either (a) the introduction of,
or any change in, or in the interpretation of, any Applicable Law or (b)
compliance with any guideline or request issued after the date hereof from any
central bank or comparable agency or other Governmental Authority (whether or
not having the force of law), has or would have the effect of reducing the rate
of return on the capital of, or has affected or would affect the amount of
capital required to be maintained by, any Lender or any corporation controlling
such Lender as a consequence of, or with reference to the Commitments and other
commitments of this type, below the rate which the Lender or such other
corporation could have achieved but for such introduction, change or
compliance, then within five (5) Business Days after written demand by any such
Lender, the Borrowers shall pay to such Lender from time to time as specified
by such Lender additional amounts sufficient to compensate such Lender or other
corporation for such reduction. Any Lender requesting
28
35
compensation under this Section shall furnish to the Borrowers a certificate
setting forth the basis and amount of such request, which certificate shall be
prima facie evidence of the matters stated therein. Determinations by any Lender
of the amount of any claim for compensation under this Section shall be made on
a reasonable basis and in good faith.
SECTION 3.11 Taxes.
(a) Payments Free and Clear. Any and all payments by the
Borrowers hereunder or under the Notes shall be made free and clear of and
without deduction for any and all present or future taxes, levies, imposts,
deductions, charges or withholding, and all liabilities with respect thereto
excluding, (i) in the case of each Lender and the Agent, income and franchise
taxes imposed by the jurisdiction under the laws of which such Lender or the
Agent (as the case may be) is organized or is or should be qualified to do
business or any political subdivision thereof and (ii) in the case of each
Lender, income and franchise taxes imposed by the United States of America, any
political subdivision thereof, the jurisdiction of such Lender's Lending Office
or any political subdivision thereof (all such non-excluded taxes, levies,
imposts, deductions, charges, withholdings and liabilities being hereinafter
referred to as "Taxes"). If the Borrowers shall be required by law to deduct any
Taxes from or in respect of any sum payable hereunder or under any Note to any
Lender or the Agent, (A) the sum payable shall be increased as may be necessary
so that after making all required deductions (including deductions applicable to
additional sums payable under this Section 3.11) such Lender or the Agent (as
the case may be) receives an amount equal to the amount such party would have
received had no such deductions been made, (B) the Borrowers shall make such
deductions, (C) the Borrowers shall pay the full amount deducted to the relevant
taxing authority or other authority in accordance with applicable law, and (D)
the Borrowers shall deliver to the Agent evidence of such payment to the
relevant taxing authority or other authority in the manner provided in Section
3.11(d).
(b) Stamp and Other Taxes. In addition, the Borrowers shall
pay any present or future stamp, registration, recordation or documentary taxes
or any other similar fees or charges or excise or property taxes, levies of the
United States or any state or political subdivision thereof or any applicable
foreign jurisdiction which arise from any payment made hereunder or from the
execution, delivery or registration of, or otherwise with respect to, this
Agreement, the Loans, the other Loan Documents, or the perfection of any rights
or security interest in respect thereto (hereinafter referred to as "Other
Taxes").
29
36
(c) Indemnity. The Borrowers shall indemnify each Lender and
the Agent for the full amount of Taxes and Other Taxes (including, without
limitation, any Taxes and Other Taxes imposed by any jurisdiction on amounts
payable under this Section 3.11) paid by such Lender or the Agent (as the case
may be) and any liability (including penalties, interest and expenses) arising
therefrom or with respect thereto, whether or not such Taxes or Other Taxes were
correctly or legally asserted. Such indemnification shall be made within thirty
(30) days from the date such Lender or the Agent (as the case may be) makes
written demand therefor.
(d) Evidence of Payment. Within thirty (30) days after the
date of any payment of Taxes or Other Taxes, Longhorn, on behalf of the
Borrowers, shall furnish to the Agent, at its address referred to in Section
12.1, the original or a certified copy of a receipt evidencing payment thereof
or other evidence of payment satisfactory to the Agent.
(e) Delivery of Tax Forms. Each Lender organized under the
laws of a jurisdiction other than the United States or any state thereof shall
deliver to the Borrowers, with a copy to the Agent, on the Closing Date or
concurrently with the delivery of the relevant Assignment and Acceptance, as
applicable, (i) two United States Internal Revenue Service Forms 4224 or Forms
1001, as applicable (or successor forms) properly completed and certifying in
each case that such Lender is entitled to a complete exemption from withholding
or deduction for or on account of any United States federal income taxes, and
(ii) an Internal Revenue Service Form W-8 or W-9 or successor applicable form,
as the case may be, to establish an exemption from United States backup
withholding taxes. Each such Lender further agrees to deliver to the Borrowers,
with a copy to the Agent, a Form 1001 or 4224 and Form W-8 or W-9, or successor
applicable forms or manner of certification, as the case may be, on or before
the date that any such form expires or becomes obsolete or after the occurrence
of any event requiring a change in the most recent form previously delivered by
it to the Borrowers, certifying in the case of a Form 1001 or 4224 that such
Lender is entitled to receive payments under this Agreement without deduction or
withholding of any United States federal income taxes (unless in any such case
an event (including without limitation any change in treaty, law or regulation)
has occurred prior to the date on which any such delivery would otherwise be
required which renders such forms inapplicable or the exemption to which such
forms relate unavailable and such Lender notifies the Borrowers and the Agent
that it is not entitled to receive payments without deduction or withholding of
United States federal income taxes) and, in the case of a Form W-8 or W-9,
establishing an exemption from United States backup withholding tax.
30
37
(f) Survival. Without prejudice to the survival of any other
agreement of the Borrowers hereunder, the agreements and obligations of the
Borrowers contained in this Section 3.11 shall survive the payment in full of
the Obligations and the termination of the Commitments.
(g) Change of Lending Office, etc. Any Lender claiming
additional amounts payable pursuant to this Section 3.11 shall use reasonable
efforts (consistent with its internal policy and legal and regulatory
restrictions) to file any certificate or document requested by the Borrowers or
to change the jurisdiction of its Lending Office if the making of such filing or
change would avoid the need for or reduce the amount of any such additional
amounts which may thereafter accrue and would not, in the judgment of such
Lender, be disadvantageous to such Lender.
(h) Tax Credits. In the event that an additional payment is
made under Section 3.11(a) or (c) for the account of any Lender and such Lender
receives or is granted a credit against or release or remission for, or
repayment of, any tax paid or payable by it in respect of or calculated with
reference to the deduction or withholding giving rise to such payment, such
Lender shall, to the extent that it can do so without prejudice to the retention
of the amount of such credit, relief, remission or repayment, pay to the
Borrowers such amount as is attributable to such deduction or withholding as
will leave such Lender (after such payment) in no better or worse position than
it would have been in if the Borrowers had not been required to make such
deduction or withholding.
SECTION 3.12 Affected Lenders. If any Lender requests compensation
pursuant to Section 3.8(c), 3.8(d), 3.10 or 3.11, or the obligation of the
Lenders to make LIBOR Rate Loans or to continue, or to convert Base Rate Loans
into, LIBOR Rate Loans shall be suspended pursuant to Section 3.8(a) or (b) due
to an event affecting any Lender, then, so long as there does not then exist
any Default or Event of Default, the Borrowers may either (a) demand that such
Lender (the "Affected Lender"), and upon such demand the Affected Lender shall
promptly, assign its Commitment to another financial institution subject to and
in accordance with the provisions of Section 12.10(b) for a purchase price
equal to the aggregate principal balance of Loans then owing to the Affected
Lender plus any accrued but unpaid interest thereon, accrued but unpaid fees
and any other amounts owing to the Affected Lender hereunder, or (b) pay to the
Affected Lender the aggregate principal balance of Loans then owing to the
Affected Lender plus any accrued but unpaid interest thereon, accrued but
unpaid fees and any other amounts owing to the Affected Lender hereunder,
whereupon the Affected Lender shall no
31
38
longer be a party hereto or have any rights or obligations hereunder or under
any of the other Loan Documents and the Aggregate Commitment shall immediately
and permanently be reduced by an amount equal to the amount of the Affected
Lender's Commitment. The Agent shall cooperate in effectuating the replacement
of an Affected Lender under this Section, but at no time shall the Agent be
obligated in any way whatsoever to initiate any such replacement. The exercise
by the Borrowers of their rights under this Section shall be at the Borrowers'
sole cost and expense (including with respect to the assignment fee required
pursuant to Section 12.10(b)(v)), and at no cost or expense to the Agent, the
Affected Lender or any of the other Lenders.
ARTICLE IV
CLOSING; CONDITIONS OF CLOSING AND BORROWING
SECTION 4.1. Closing. The closing shall take place at the offices of
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, L.L.P., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ at 10:00 a.m. on December 18, 1996, or on
such other date as the parties hereto shall mutually agree.
SECTION 4.2. Conditions to Closing and Initial Loan. The obligation of
the Lenders to close this Agreement and to make the initial Loan is subject to
the satisfaction of each of the following conditions:
(a) Executed Loan Documents. This Agreement and the Notes
shall have been duly authorized, executed and delivered to the Agent by the
parties thereto, shall be in full force and effect and no Default shall exist
thereunder, and the Borrowers shall have delivered original counterparts thereof
to the Agent.
(b) Closing Certificates; etc.
(i) Officer's Certificate of the Borrowers. The Agent shall
have received a certificate from the chief executive officer or chief financial
officer of Longhorn, on behalf of the Borrowers, in form and substance
satisfactory to the Agent, to the effect that all representations and warranties
of the Borrowers contained in this Agreement and the other Loan Documents are
true, correct and complete in all material respects; that the Borrowers are not
in violation of any of the covenants contained in this Agreement and the other
Loan Documents; that, after giving effect to the transactions contemplated by
this Agreement, no Default or Event of Default has occurred and is continuing;
and that the Borrowers have satisfied each of the closing conditions.
32
39
(ii) Certificate of Secretaries of the Borrowers. The Agent
shall have received a certificate of the secretary or assistant secretary of
each Borrower certifying that attached thereto is a true and complete copy of
the articles of incorporation of such Borrower and all amendments thereto,
certified as of a recent date by the appropriate Governmental Authority in its
jurisdiction of incorporation; that attached thereto is a true and complete copy
of the bylaws of such Borrower as in effect on the date of such certification;
that attached thereto is a true and complete copy of resolutions duly adopted by
the Board of Directors of such Borrower authorizing the borrowings contemplated
hereunder and the execution, delivery and performance of this Agreement and the
other Loan Documents; and as to the incumbency and genuineness of the signature
of each officer of such Borrower.
(iii) Certificates of Good Standing. The Agent shall have
received a long-form certificate as of a recent date of the good standing of
each Borrower under the laws of the jurisdiction of organization of such
Borrower and each other jurisdiction where such Borrower is qualified to do
business and a certificate of the relevant taxing authorities of such
jurisdictions certifying that such Borrower has filed required tax returns and
owes no delinquent taxes.
(iv) Opinions of Counsel. The Agent shall have received
favorable opinions of counsel to the Borrowers addressed to the Agent and the
Lenders with respect to the Borrowers, the Loan Documents and such other matters
as the Lenders shall reasonably request.
(v) Tax Forms. The Agent shall have received on behalf of
the Borrowers the United States Internal Revenue Service forms required by
Section 3.11(e) hereof.
(c) Consents; Defaults.
(i) Governmental and Third Party Approvals. All necessary
approvals, authorizations and consents, if any are required, of any Person, any
shareholder of any Borrower, and of all Governmental Authorities and courts
having jurisdiction with respect to the transactions contemplated by this
Agreement and the other Loan Documents shall have been obtained.
(ii) Permits and Licenses. All permits and licenses,
including permits and licenses required under Applicable Laws, necessary to the
conduct of business by the Borrowers shall have been obtained and remain in full
force and effect.
33
40
(iii) No Injunction, Etc. No action, proceeding,
investigation, regulation or legislation shall have been instituted, threatened
or proposed before any Governmental Authority to enjoin, restrain, or prohibit,
or to obtain substantial damages in respect of, or which is related to or arises
out of this Agreement or the other Loan Documents or the consummation of the
transactions contemplated hereby or thereby, or which, in the Agent's
discretion, would make it inadvisable to consummate the transactions
contemplated by this Agreement and such other Loan Documents.
(iv) No Material Adverse Change. Since December 31, 1995,
there shall not have occurred any event, condition or state of facts that could
reasonably be expected to have a Material Adverse Effect.
(v) No Event of Default. No Default or Event of Default
shall have occurred and be continuing.
(d) Financial Matters.
(i) Financial Statements. The Agent and each Lender shall
have received recent annual and interim financial statements and other financial
information with respect to the Longhorn and its Subsidiaries prepared in
accordance with GAAP. Without limitation of the foregoing, the Agent and each
Lender shall have received audited financial statements for the Fiscal Year
ended December 31, 1995 and unaudited financial statements for the nine month
period ending September 30, 1996.
(ii) Financial Condition Certificate. Longhorn, on behalf of
the Borrowers, shall have delivered to the Agent a certificate, in form and
substance satisfactory to the Agent, and certified as accurate by the chief
executive officer or chief financial officer of Longhorn, that (A) Longhorn and
each of its Subsidiaries are Solvent, (B) the payables of Longhorn and each
other Borrower are current and not more than ninety (90) days past due the
invoice date, (C) attached thereto is a pro forma balance sheet of Longhorn and
its Subsidiaries setting forth on a pro forma basis the financial condition of
Longhorn and its Subsidiaries on a Consolidated basis as of November 24, 1996
and reflecting on a pro forma basis the effect of the transactions contemplated
herein, including all fees and expenses in connection therewith, and evidencing
compliance on a pro forma basis with the covenants contained in Articles VIII
and IX hereof and (D) attached thereto are the financial projections previously
delivered to the Agent representing the good faith opinions of Longhorn and
senior management thereof as to the projected results contained therein.
34
41
(iii) Payment at Closing. There shall have been paid by the
Borrowers to the Agent and the Lenders the fees set forth or referenced in
Section 3.3 and any other accrued and unpaid fees or commissions due hereunder
(including, without limitation, legal fees and expenses), and to any other
Person such amount as may be due thereto in connection with the transactions
contemplated hereby, including all taxes, fees and other charges in connection
with the execution, delivery, recording, filing and registration of any of the
Loan Documents.
(e) Miscellaneous.
(i) Notice of Borrowing. The Agent shall have received a
Notice of Borrowing from Longhorn, on behalf of the Borrowers, in accordance
with Section 2.2(a), and a written notice in the form attached hereto as Exhibit
G (a "Notice of Account Designation") specifying the account or accounts to
which the proceeds of any Loans made after the Closing Date are to be disbursed.
(ii) Proceedings and Documents. All opinions, certificates
and other instruments and all proceedings in connection with the transactions
contemplated by this Agreement shall be satisfactory in form and substance to
the Lenders. The Lenders shall have received copies of all other instruments and
other evidence as the Lenders may reasonably request, in form and substance
satisfactory to the Lenders, with respect to the transactions contemplated by
this Agreement and the taking of all actions in connection therewith.
(iii) Due Diligence and Other Documents. Longhorn, on behalf
of the Borrowers, shall have delivered to the Agent such other documents,
certificates and opinions as the Agent reasonably requests, certified by a
secretary or assistant secretary of the applicable Borrower as a true and
correct copy thereof.
SECTION 4.3. Conditions to All Loans. The obligations of the Lenders
to make any Loan are subject to the satisfaction of the following conditions
precedent on the relevant borrowing date:
(a) Continuation of Representations and Warranties. The representations
and warranties contained in Article V shall be true and correct in all material
respects on and as of such borrowing date with the same effect as if made on and
as of such date except to the extent that such representations and warranties
expressly relate to an earlier date (in which case
35
42
such representations and warranties shall have been true and correct in all
material respects on and as of such earlier date).
(b) No Existing Default. No Default or Event of Default shall have
occurred and be continuing hereunder on the borrowing date with respect to such
Loan or after giving effect to the Loans to be made on such date.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE BORROWERS
SECTION 5.1 Representations and Warranties. To induce the Agent to
enter into this Agreement and the Lenders to make the Loans, the Borrowers
hereby represent and warrant to the Agent and Lenders that:
(a) Organization; Power; Qualification. Each of Longhorn and
its Subsidiaries is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation or formation, has the power
and authority to own its properties and to carry on its business as now being
and hereafter proposed to be conducted and is duly qualified and authorized to
do business in each jurisdiction in which the character of its properties or the
nature of its business requires such qualification and authorization, except
where the failure to so qualify could not reasonably be expected to have a
Material Adverse Effect. The jurisdictions in which Longhorn and its
Subsidiaries are organized and qualified to do business as of the Closing Date
are described on Schedule 5.1 (a).
(b) Ownership. Each Subsidiary of Longhorn as of the Closing
Date is listed on Schedule 5.1 (a). The capitalization of Longhorn and its
Subsidiaries as of the Closing Date consists of the number of shares,
authorized, issued and outstanding, of such classes and series, with or without
par value, (or in the case of Subsidiaries which are not corporations,
comparable information regarding equity interests therein) described on Schedule
5.1(a). All outstanding shares or other equity interests have been duly
authorized and validly issued and, with respect to capital stock, are fully paid
and nonassessable. The holders of the capital stock or other equity interests of
the Subsidiaries of Longhorn as of the Closing Date and the amount of capital
stock or other equity interest owned by each as of the Closing Date are
described on Schedule 5.1(a). As of the Closing Date, there are no outstanding
stock purchase warrants, subscriptions, options, securities, instruments or
other rights of any type or nature
36
43
whatsoever, which are convertible into, exchangeable for or otherwise provide
for or permit the issuance of capital stock or other equity interest of Longhorn
or its Subsidiaries, except as described on Schedule 5.1(a).
(c) Authorization of Agreement, Loan Documents and Borrowing. Each of
Longhorn and its Subsidiaries has the right, power and authority and has taken
all necessary corporate and other action to authorize the execution, delivery
and performance of this Agreement and each of the other Loan Documents to which
it is a party in accordance with their respective terms. This Agreement and each
of the other Loan Documents have been duly executed and delivered by the duly
authorized officers of Longhorn and each of its Subsidiaries party thereto, and
each such document constitutes the legal, valid and binding obligation of
Longhorn or its Subsidiary party thereto, enforceable in accordance with its
terms, except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar state or federal debtor relief laws from
time to time in effect which affect the enforcement of creditors' rights in
general and the availability of equitable remedies.
(d) Compliance of Agreement, Loan Documents and Borrowing with Laws,
Etc. The execution, delivery and performance by Longhorn and its Subsidiaries of
the Loan Documents to which each such Person is a party, in accordance with
their respective terms, the borrowings hereunder and the transactions
contemplated hereby do not and will not, by the passage of time, the giving of
notice or otherwise, (i) require any Governmental Approval or violate any
Applicable Law relating to Longhorn or any of its Subsidiaries, (ii) conflict
with, result in a breach of or constitute a default under the articles of
incorporation, bylaws or other organizational documents of Longhorn or any of
its Subsidiaries or any indenture, agreement or other instrument to which such
Person is a party or by which any of its properties may be bound or any
Governmental Approval relating to such Person, or (iii) result in or require the
creation or imposition of any Lien upon or with respect to any property now
owned or hereafter acquired by such Person other than Liens arising under the
Loan Documents.
(e) Compliance with Law; Governmental Approvals. Each of Longhorn and
its Subsidiaries (i) has all Governmental Approvals required by any Applicable
Law for it to conduct its business, each of which is in full force and effect,
is final and not subject to review on appeal and is not the subject of any
pending or, to the best of its knowledge, threatened attack by direct or
collateral proceeding, except for such Governmental Approvals the absence of
which could not reasonably be expected to have a Material Adverse Effect and
(ii) is in compliance with
37
44
each Governmental Approval applicable to it and in compliance with all other
Applicable Laws relating to it or any of its respective properties, except in
each case where the failure to so comply could not reasonably be expected to
have a Material Adverse Effect.
(f) Tax Returns and Payments. Each of Longhorn and its Subsidiaries has
duly filed or caused to be filed all material federal, state, local and other
tax returns required by Applicable Law to be filed, and has paid, or made
adequate provision for the payment of, all material federal, state, local and
other taxes, assessments and governmental charges or levies upon it and its
property, income, profits and assets which are due and payable except any
nonpayment permitted under Section 7.5. No Governmental Authority has asserted
any Lien or other material claim against Longhorn or any Subsidiary thereof with
respect to unpaid taxes which could reasonably be expected to have a Material
Adverse Effect. The charges, accruals and reserves on the books of Longhorn and
its Subsidiaries in respect of federal, state, local and other taxes for all
Fiscal Years and portions thereof since the organization of Longhorn and its
Subsidiaries are in the judgment of Longhorn and its Subsidiaries adequate, and
the Borrowers do not anticipate any additional taxes or assessments for any of
such years, the result of which could reasonably be expected to have a Material
Adverse Effect.
(g) Intellectual Property Matters. Except for matters existing on the
Closing Date and set forth on Schedule 5.1(g), each of Longhorn and its
Subsidiaries owns or possesses rights to use all franchises, licenses,
copyrights, copyright applications, patents, patent rights or licenses, patent
applications, trademarks, trademark rights, trade names, trade name rights,
copyrights and rights with respect to the foregoing which are required to
conduct its business, except where the failure to so own or possess such rights
could not reasonably be expected to have a Material Adverse Effect. No event has
occurred which permits, or after notice or lapse of time or both would permit,
the revocation or termination of any such rights, and except for matters
existing on the Closing Date and set forth on Schedule 5.1(g), neither Longhorn
nor any Subsidiary thereof is liable to any Person for infringement under
Applicable Law with respect to any such rights as a result of its business
operations, the result of which could reasonably be expected to have a Material
Adverse Effect.
(h) Environmental Matters. Except for matters which, individually or in
the aggregate, could not reasonably be expected to have a Material Adverse
Effect,
38
45
(i) The properties of Longhorn and its Subsidiaries do not contain, and
to their knowledge have not previously contained, any Hazardous Materials in
amounts or concentrations which (A) constitute or constituted a violation of, or
(B) could give rise to liability under, applicable Environmental Laws;
(ii) Such properties and all operations conducted in connection
therewith are in compliance, and have been in compliance, with all applicable
Environmental Laws, and there is no contamination by Hazardous Materials at,
under or about such properties or such operations which could interfere with the
continued operation of such properties or impair the fair saleable value
thereof;
(iii) Neither Longhorn nor any Subsidiary thereof has received any
notice of violation, alleged violation, noncompliance, liability or potential
liability regarding environmental matters or compliance with applicable
Environmental Laws with regard to any of their properties or the operations
conducted in connection therewith, nor does Longhorn or any Subsidiary thereof
have knowledge or reason to believe that any such notice will be received or is
being threatened;
(iv) Hazardous Materials have not been transported or disposed of for,
on behalf of, for the benefit of, or for the account of Longhorn or any
Subsidiary thereof from the properties of Longhorn and its Subsidiaries in
violation of, or in a manner or to a location which could give rise to liability
under, applicable Environmental Laws, nor have any Hazardous Materials been
generated, treated, stored or disposed of at, on or under any of such properties
in violation of, or in a manner that could give rise to liability under, any
applicable Environmental Laws;
(v) No judicial proceedings or governmental or administrative action is
pending, or, to the knowledge of Longhorn or any of its Subsidiaries threatened,
under any applicable Environmental Law to which Longhorn or any Subsidiary
thereof is or will be named as a party with respect to such properties or
operations conducted in connection therewith, nor are there any consent decrees
or other decrees, consent orders, administrative orders or other orders, or
other administrative or judicial requirements outstanding under any applicable
Environmental Law with respect to such properties or such operations; and
(vi) There has been no release, or to the best of the knowledge of
Longhorn and its Subsidiaries, the threat of release, of Hazardous Materials at
or from such properties, in
39
46
violation of or in amounts or in a manner that could give rise to liability
under applicable Environmental Laws.
(i) ERISA. Except for matters which, individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect:
(i) As of the Closing Date, no Borrower nor any ERISA Affiliate
maintains or contributes to, or has any obligation under, (a) any Pensions Plans
or Multiemployer Plans or (B) any Employee Benefit Plans intended to comply with
Section 401(a) of the Code other than those identified on Schedule 5.1(i);
(ii) each Borrower and each ERISA Affiliate is in compliance in
all material respects with all applicable provisions of ERISA and the
regulations and published interpretations thereunder with respect to all
Employee Benefit Plans except for any required amendments f or which the
remedial amendment period as defined in Section 401 (b) of the Code has not yet
expired. Each Employee Benefit Plan that is intended to be qualified under
Section 401(a) of the Code has been determined by the Internal Revenue Service
to be so qualified, and each trust related to such plan has been determined to
be exempt under Section 501(a) of the Code. No liability has been incurred by
any Borrower or any ERISA Affiliate which remains unsatisfied for any taxes or
penalties with respect to any Employee Benefit Plan or any Multiemployer Plan;
(iii) No Pension Plan has been terminated, nor has any accumulated
funding deficiency (as defined in Section 412 of the Code) been incurred
(without regard to any waiver granted under Section 412 of the Code), nor has
any funding waiver from the Internal Revenue Service been received or requested
with respect to any Pension Plan, nor has any Borrower or any ERISA Affiliate
failed to make any contributions or to pay any amounts due and owing as required
by Section 412 of the Code, Section 302 of ERISA or the terms of any Pension
Plan prior to the due dates of such contributions under Section 412 of the Code
or Section 302 of ERISA, nor has there been any event requiring any disclosure
under Section 4041(c)(3)(C) or 4063(a) of ERISA with respect to any Pension
Plan;
(iv) No Borrower nor any ERISA Affiliate has: (A) incurred any
liability to the PBGC which remains outstanding other than the payment of
premiums and there are no premium payments which are due and unpaid, (B) failed
to make a required contribution or payment to a Multiemployer Plan, or (C)
failed to make a required installment or other required payment under Section
412 of the Code;
40
47
(v) No Termination Event has occurred or is reasonably expected to
occur; and
(vi) No proceeding, claim, lawsuit and/or investigation is
existing or, to the best knowledge of the Borrowers after due inquiry,
threatened concerning or involving any (A) employee welfare benefit plan (as
defined in Section 3 (1) of ERISA) currently maintained or contributed to by any
Borrower or (B) Pension Plan maintained by any Borrower.
(vii)No Borrower has engaged in a nonexempt prohibited transaction
described in ERISA Section 406 or Code Section 4975.
(j) Margin Stock. Neither Longhorn nor any Subsidiary thereof is
engaged principally or as one of its activities in the business of extending
credit for the purpose of "purchasing" or "carrying" any "margin stock" (as each
such term is defined or used in Regulations G and U of the Board of Governors of
the Federal Reserve System). No part of the proceeds of any of the Loans will be
used for purchasing or carrying margin stock or for any purpose which violates,
or which would be inconsistent with, the provisions of Regulation G, T, U or X
of such Board of Governors.
(k) Government Regulation. Except as set forth on Schedule 5.1(k),
neither Longhorn nor any Subsidiary thereof is an "investment company" or a
company "controlled" by an "investment company" (as each such term is defined or
used in the Investment Company Act of 1940, as amended) and neither Longhorn nor
any Subsidiary thereof is, or after giving effect to any Loan will be, subject
to regulation under the Public Utility Holding Company Act of 1935 or the
Interstate Commerce Act, each as amended, or any other Applicable Law which
limits its ability to incur or consummate the transactions contemplated hereby.
(l) Material Contracts. Schedule 5.1(l) sets forth a complete and
accurate list of all Material Contracts of Longhorn and its Subsidiaries in
effect as of the Closing Date not listed on any other Schedule hereto; other
than as set forth in Schedule 5.1(l), each such Material Contract is, and after
giving effect to the consummation of the transactions contemplated by the Loan
Documents will be, in full force and effect in accordance with the terms
thereof. Longhorn and its Subsidiaries have delivered to the Agent a true and
complete copy of each Material Contract required to be listed on Schedule
5.1(l).
(m) Employee Relations. Each of Longhorn and its Subsidiaries has an
adequate work force in place and is not, as
41
48
of the Closing Date, party to any collective bargaining agreement nor has any
labor union been recognized as the representative of its employees. The
Borrowers know of no pending, threatened or contemplated strikes, work stoppage
or other collective labor disputes involving their employees or the employees of
their Subsidiaries.
(n) Burdensome Provisions. Neither Longhorn nor any Subsidiary thereof
is a party to any indenture, agreement, lease or other instrument, or subject to
any corporate or partnership restriction, Governmental Approval or Applicable
Law which is so unusual or burdensome as in the foreseeable future could be
reasonably expected to have a Material Adverse Effect. Longhorn and its
Subsidiaries do not presently anticipate that future expenditures needed to meet
the provisions of any statutes, orders, rules or regulations of a Governmental
Authority will be so burdensome as to have a Material Adverse Effect.
(o) Financial Statements. The (i) audited Consolidated balance sheets
of Longhorn and its Subsidiaries as of December 31, 1995 and the related
statements of income and retained earnings and cash flows for the Fiscal Year
then ended and (ii) unaudited Consolidated balance sheet of Longhorn and its
Subsidiaries as of September 29, 1996 and related unaudited interim statements
of income and retained earnings, copies of which have been furnished to the
Agent and each Lender, are complete and correct and fairly present in all
material respects, the assets, liabilities and financial position of Longhorn
and its Subsidiaries as at such dates, and the results of the operations and
changes of financial position for the periods then ended. All such financial
statements, including the related schedules and notes thereto, have been
prepared in accordance with GAAP. Longhorn and its Subsidiaries have no Debt,
obligation or other unusual forward or long-term commitment which is not fairly
reflected in the foregoing financial statements or in the notes thereto.
(p) No Material Adverse Change. Since December 31, 1995 (and with
reference back to such date only) there has been no material adverse change in
the properties, business, operations, prospects, or condition (financial or
otherwise) of Longhorn and its Subsidiaries, taken as a whole, and no event has
occurred or condition arisen that could reasonably be expected to have a
Material Adverse Effect.
(q) Solvency. As of the Closing Date and after giving effect to each
Loan made hereunder, Longhorn and each of its Subsidiaries will be Solvent.
49
(r) Titles to Properties. Each of Longhorn and its Subsidiaries has
such title to the real property owned by it as is necessary or desirable to the
conduct of its business and valid and legal title to all of its personal
property and assets, including, but not limited to, those reflected on the
balance sheets of Longhorn and its Subsidiaries delivered pursuant to Section
5.1(o), except those which have been disposed of by Longhorn or its Subsidiaries
subsequent to such date which dispositions have been in the ordinary course of
business or as otherwise expressly permitted hereunder.
(s) Liens. None of the properties and assets of Longhorn or any
Subsidiary thereof is subject to any Lien, except Liens permitted pursuant to
Section 9.3. No financing statement under the Uniform Commercial Code of any
state which names Longhorn or any Subsidiary thereof or any of their respective
trade names or divisions as debtor and which has not been terminated, has been
filed in any state or other jurisdiction and neither Longhorn nor any Subsidiary
thereof has signed any such financing statement or any security agreement
authorizing any secured party thereunder to file any such financing statement,
except to perfect those Liens permitted by Section 9.3 hereof.
(t) Debt and Contingent Obligations. Schedule 5.1(t) is a complete and
correct listing of all Debt and Contingent Obligations as of the Closing Date of
Longhorn and its Subsidiaries in excess of $250,000. Longhorn and its
Subsidiaries have performed and are in material compliance with all of the terms
of such Debt and Contingent Obligations and all instruments and agreements
relating thereto.
(u) Litigation. Except for matters existing on the Closing Date and
set forth on Schedule 5.1(u), there are no actions, suits or proceedings pending
nor, to the knowledge of the Borrowers, threatened against or in any other way
relating adversely to or affecting Longhorn or any Subsidiary thereof or any of
their respective properties in any court or before any arbitrator of any kind or
before or by any Governmental Authority which, if adversely determined,
individually or in the aggregate could reasonably be expected to have a Material
Adverse Effect.
(v) Absence of Defaults. No event has occurred or is continuing which
(i) constitutes a Default or an Event of Default, or (ii) constitutes, or which
with the passage of time or giving of notice or both would constitute, a default
or event of default by Longhorn or any Subsidiary thereof under any Material
Contract or judgment, decree or order to which Longhorn or any of its
Subsidiaries is a party or by which Longhorn or any of its Subsidiaries or any
of their respective properties may be bound, which could reasonably be expected
to have a Material
43
50
Adverse Effect or which would require Longhorn or any of its Subsidiaries to
make any payment thereunder in excess of $250,000 prior to the scheduled
maturity date therefor.
(w) Accuracy and Completeness of Information. All written information,
reports and other papers and data produced by or on behalf of Longhorn or any
Subsidiary thereof and furnished to the Lenders were, at the time the same were
so furnished, complete and correct in all material respects to the extent
necessary to give the recipient a true and accurate knowledge of the subject
matter. No document furnished or written statement made to the Agent or the
Lenders by Longhorn or any Subsidiary thereof in connection with the
negotiation, preparation or execution of this Agreement or any of the Loan
Documents contains or will contain any untrue statement of a fact material to
the creditworthiness of Longhorn or any of its Subsidiaries or omits or will
omit to state a fact necessary in order to make the statements contained therein
not materially misleading. Longhorn and its Subsidiaries are not aware of any
events or circumstances which they have not disclosed in writing to the Agent
having a Material Adverse Effect, or insofar as the Borrowers can now foresee,
could reasonably be expected to have a Material Adverse Effect.
SECTION 5.2 Survival of Representations and Warranties, Etc. All
representations and warranties set forth in this Article V and all
representations and warranties of the Borrowers or any of their respective
Subsidiaries contained in any certificate, or any of the Loan Documents
(including but not limited to any such representation or warranty made in or in
connection with any amendment thereto) shall constitute representations and
warranties made under this Agreement. All representations and warranties made
under this Agreement shall be made or deemed to be made at and as of the
Closing Date, shall survive the Closing Date and shall not be waived by the
execution and delivery of this Agreement, any investigation made by or on
behalf of the Lenders or any borrowing hereunder.
ARTICLE VI
FINANCIAL INFORMATION AND NOTICES
Until all the Obligations have been finally and indefeasibly paid and
satisfied in full and the Commitments terminated, unless consent has been
obtained in the manner set forth in Section 12.11 hereof, Longhorn, on behalf of
the Borrowers, will furnish or cause to be furnished to the Agent at the Agent's
Office at the address set forth in Section 12.1 hereof and to the Lenders at
their respective addresses as set forth on Schedule 1, or such
44
51
other office as may be designated by the Agent and Lenders from time to time:
SECTION 6.1 Financial Statements and Projections.
(a) Quarterly Financial Statements. As soon as practicable and in any
event within forty-five (45) days after the end of each fiscal quarter, an
unaudited Consolidated balance sheet of Longhorn and its Subsidiaries as of the
close of such fiscal quarter and unaudited Consolidated statements of income,
retained earnings and cash flows for the fiscal quarter then ended and that
portion of the Fiscal Year then ended, including the notes thereto, all in
reasonable detail setting forth in comparative form the corresponding figures
for the preceding Fiscal Year and prepared by Longhorn in accordance with GAAP
and, if applicable, containing disclosure of the effect on the financial
position or results of operations of any change in the application of accounting
principles and practices during the period, and certified by the chief financial
officer of Longhorn to present fairly in all material respects the financial
condition of Longhorn and its Subsidiaries as of their respective dates and the
results of operations of Longhorn and its Subsidiaries for the respective
periods then ended, subject to normal year end adjustments.
(b) Annual Financial Statements. As soon as practicable and in any
event within ninety (90) days after the end of each Fiscal Year, an audited
Consolidated balance sheet of Longhorn and its Subsidiaries as of the close of
such Fiscal Year and audited Consolidated statements of income, retained
earnings and cash flows for the Fiscal Year then ended, including the notes
thereto, all in reasonable detail setting forth in comparative form the
corresponding figures for the preceding Fiscal Year and prepared by an
independent certified public accounting firm acceptable to the Agent in
accordance with GAAP and, if applicable, containing disclosure of the effect on
the financial position or results of operation of any change in the application
of accounting principles and practices during the year, and accompanied by a
report thereon by such certified public accountants that is not qualified with
respect to scope limitations imposed by Longhorn or any of its Subsidiaries or
with respect to accounting principles followed by Longhorn or any of its
Subsidiaries not in accordance with GAAP.
(c) Annual Business Plan and Financial Projections. As soon as
practicable and in any event within thirty (30) days prior to the beginning of
each Fiscal Year, a business plan of Longhorn and its Subsidiaries for the
ensuing Fiscal Year, such plan to be prepared in a manner consistent with GAAP
and to include, on a quarterly basis, the following: a quarterly
45
52
operating and capital budget, a projected income statement, statement of cash
flows and balance sheet and a report containing management's discussion and
analysis of such projections, accompanied by a certificate from the chief
financial officer of Longhorn to the effect that, to the best of such officer's
knowledge, such projections are good faith estimates of the financial condition
and operations of Longhorn and its Subsidiaries for such Fiscal Year.
SECTION 6.2 Officer's Compliance Certificate. At each time financial
statements are delivered pursuant to Sections 6.1(a) or (b) and at such other
times as the Agent shall reasonably request, a certificate of the chief
financial officer or the treasurer of Longhorn in the form of Exhibit E
attached hereto (an "Officer's Compliance Certificate"):
(a) stating that such officer has reviewed the financial statements of
Longhorn and its Subsidiaries as of the end of the fiscal quarter or Fiscal Year
most recently ended, as applicable, and such statements fairly present in all
material respects the financial condition of Longhorn and its Subsidiaries as of
the dates indicated and the results of their operations and cash flows for the
periods indicated;
(b) stating that to such officer's knowledge, no Default or Event of
Default exists, or, if such is not the case, specifying such Default or Event of
Default and its nature, when it occurred, whether it is continuing and the steps
being taken by the Borrowers with respect to such Default or Event of Default;
and
(c) setting forth as at the end of such fiscal quarter or Fiscal Year,
as applicable, (i) the calculations required to establish whether or not
Longhorn and its Subsidiaries were in compliance with the financial covenants
set forth in Article VIII hereof and (ii) the calculation of the Applicable
Margin pursuant to Section 3.1(c) as at the end of such period.
SECTION 6.3 Other Reports.
(a) Promptly upon receipt thereof, copies of all reports, if any,
submitted to Longhorn or any other Borrower or the Board of Directors thereof by
their respective independent public accountants in connection with their
auditing function, including, without limitation, any management report and any
management responses thereto; and
(b) Promptly but in any event within ten (10) Business Days after the
filing thereof, a copy of (i) each report or other filing made by Longhorn or
any of its Subsidiaries with the
46
53
Securities and Exchange Commission ("SEC") and required by the SEC to be
delivered to the shareholders of Longhorn or any of its Subsidiaries, and (ii)
each report made by Longhorn or any of its Subsidiaries to the SEC on Form 8-K
and each final registration statement of Longhorn or any of its Subsidiaries
filed with the SEC (excluding any registration statement on Form S-8 or its
equivalent); and
(c) Such other information regarding the operations, business affairs
and financial condition of Longhorn or any of its Subsidiaries as the Agent or
any Lender may reasonably request.
SECTION 6.4 Notice of Litigation and Other Matters. Prompt (but in no
event later than ten (10) days after the Chief Executive Officer, Chief
Financial Officer, Vice President of Marketing, Vice President of Operations or
Vice President of Real Estate and Development of Longhorn or the President of
Bugaboo Creek Steakhouse, Inc. obtains knowledge thereof) telephonic and
written notice of:
(a) the commencement of all proceedings and investigations by or
before any Governmental Authority and all actions and proceedings in any court
or before any arbitrator against or involving any Borrower or any Subsidiary
thereof or any of their respective properties, assets or businesses which if
determined adversely to such Borrower or such Subsidiary, individually or in the
aggregate could reasonably be expected to have a Material Adverse Effect;
(b) any notice of any violation received by any Borrower or any
Subsidiary thereof from any Governmental Authority including, without
limitation, any notice of violation of Environmental Laws, which in any such
case could reasonably be expected to have a Material Adverse Effect;
(c) any labor controversy that has resulted in, or threatens to result
in, a strike against any Borrower or any Subsidiary thereof;
(d) any attachment, judgment, lien, levy or order exceeding $250,000
that may be assessed against any Borrower or any Subsidiary thereof;
(e) any Default or Event of Default, or any event which constitutes or
which with the passage of time or giving of notice or both would constitute a
default or event of default under any Material Contract to which any Borrower or
any Subsidiary thereof is a party or by which any Borrower or any
47
54
Subsidiary thereof or any of their respective properties may be bound;
(f) (i) any unfavorable determination letter from the Internal Revenue
Service regarding the qualification of an Employee Benefit Plan under Section
401(a) of the Code (along with a copy thereof), (ii) all notices received by any
Borrower or any ERISA Affiliate of the PBGC's intent to terminate any Pension
Plan or to have a trustee appointed to administer any Pension Plan, (iii) all
notices received by any Borrower or any ERISA Affiliate from a Multiemployer
Plan sponsor concerning the imposition or amount of withdrawal liability
pursuant to Section 4202 of ERISA and (iv) any Borrower obtaining knowledge or
reason to know that any Borrower or any ERISA Affiliate has filed or intends to
file a notice of intent to terminate any Pension Plan under a distress
termination within the meaning of Section 4041(c) of ERISA; and
(g) any event which makes any of the representations set forth in
Section 5.1 inaccurate in any material respect.
SECTION 6.5 Accuracy of Information. All written information, reports,
statements and other papers and data furnished by or on behalf of any Borrower
to the Agent or any Lender (other than financial forecasts) whether pursuant to
this Article VI or any other provision of this Agreement, shall be, at the time
the same is so furnished, complete and correct in all material respects to the
extent necessary to give the Agent or any Lender complete, true and accurate
knowledge of the subject matter based on the Borrowers' knowledge thereof.
ARTICLE VII
AFFIRMATIVE COVENANTS
Until all of the Obligations have been finally and indefeasibly paid
and satisfied in full and the Commitments terminated, unless consent has been
obtained in the manner provided for in Section 12.11, each Borrower will, and
will cause each of its Subsidiaries to:
SECTION 7.1 Preservation of Corporate Existence and Related
Matters. Except as permitted by Section 9.5, preserve and maintain its
separate existence as a corporation, partnership or other applicable form of
business entity and all rights, franchises, licenses and privileges necessary
to the conduct of its business, and qualify and remain qualified as a foreign
corporation, partnership or other such entity and authorized to do business in
each jurisdiction in which the failure to so
48
55
qualify could reasonably be expected to have a Material Adverse Effect.
SECTION 7.2 Maintenance of Property. Protect and preserve all
properties useful in and material to its business, including copyrights,
patents, trade names and trademarks; maintain in good working order and
condition all buildings, equipment and other tangible real and personal
property; and from time to time make or cause to be made all renewals,
replacements and additions to such property necessary for the conduct of its
business, so that the business carried on in connection therewith may be
properly and advantageously conducted at all times; except in each case where
the failure to take such action could not reasonably be expected to have a
Material Adverse Effect.
SECTION 7.3 Insurance. Maintain insurance with financially sound and
reputable insurance companies against such risks and in such amounts as are
customarily maintained by similar businesses and as may be required by
Applicable Law, and on the Closing Date and from time to time thereafter deliver
to the Agent upon its request a detailed list of the insurance then in effect,
stating the names of the insurance companies, the amounts and rates of the
insurance, the dates of the expiration thereof and the properties and risks
covered thereby.
SECTION 7.4 Accounting Methods and Financial Records. Maintain a
system of accounting, and keep such books, records and accounts (which shall be
true and complete in all material respects) as may be required or as may be
necessary to permit the preparation of financial statements in accordance with
GAAP and in compliance with the regulations of any Governmental Authority
having jurisdiction over it or any of its properties.
SECTION 7.5 Payment and Performance of Obligations. Pay and perform
all Obligations under this Agreement and the other Loan Documents, and pay or
perform (a) all material taxes, assessments and other governmental charges that
may be levied or assessed upon it or any of its property, and (b) all other
material indebtedness, obligations and liabilities in accordance with customary
trade practices; provided, that such Borrower or such Subsidiary may contest
any item described in clauses (a) and (b) of this Section 7.5 in good faith so
long as adequate reserves are maintained with respect thereto in accordance
with GAAP.
SECTION 7.6 Compliance With Laws and Approvals. Observe and remain in
compliance with all Applicable Laws and maintain in full force and effect all
Governmental Approvals, in each case applicable to the conduct of its business
except where the
49
56
failure to do so could not reasonably be expected to have a Material Adverse
Effect.
SECTION 7.7 Environmental Laws. In addition to and without limiting
the generality of Section 7.6, (a) comply with, and use reasonable efforts to
ensure such compliance by all tenants and subtenants, if any, with, all
applicable Environmental Laws and obtain and comply with and maintain, and use
reasonable efforts to ensure that all tenants and subtenants obtain and comply
with and maintain, any and all licenses, approvals, notifications,
registrations or permits required by Environmental Laws applicable to Longhorn,
its Subsidiaries and the conduct of their respective business, except where the
failure to do so could not reasonably be expected to have a Material Adverse
Effect, (b) conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required of Longhorn and
its Subsidiaries under applicable Environmental Laws, and promptly comply with
all lawful orders and directives of any Governmental Authority regarding
Environmental Laws issued to Longhorn or any Subsidiary thereof, except where
the failure to do so could not reasonably be expected to have a Material
Adverse Effect, and (c) defend, indemnify and hold harmless the Agent and the
Lenders, and their respective parents, Subsidiaries, Affiliates, employees,
agents, officers and directors, from and against any claims, demands,
penalties, fines, liabilities, settlements, damages, costs and expenses of
whatever kind or nature known or unknown, contingent or otherwise, arising out
of, or in any way relating to the violation of, noncompliance with or liability
under any Environmental Laws applicable to the operations of such Borrower or
such Subsidiary, or any orders, requirements or demands of Governmental
Authorities related thereto, including, without limitation, reasonable
attorney's fees actually incurred, consultant's fees, investigation and
laboratory fees, response costs, court costs and litigation expenses, except to
the extent that any of the foregoing directly result from the gross negligence
or willful misconduct of the party seeking indemnification therefor.
SECTION 7.8 Compliance with ERISA. In addition to and without limiting
the generality of Section 7.6, and to the extent any of the following,
individually or in the aggregate, results or could reasonably be expected to
result in a Material Adverse Effect, (a) comply in all material respects with
all applicable provisions of ERISA and the regulations and published
interpretations thereunder with respect to all Employee Benefit Plans, (b) not
take any action or fail to take action the result of which could be a liability
to the PBGC or to a Multiemployer Plan, (c) not participate in any prohibited
transaction that could result in any material civil penalty under ERISA or tax
50
57
under the Code, (d) operate each Employee Benefit Plan in such a
manner that will not incur any material tax liability under Section 4980B of the
Code or any liability to any qualified beneficiary as defined in Section 4980B
of the Code and (e) furnish to the Agent upon the Agent's request such
additional information about any Employee Benefit Plan as may be reasonably
requested by the Agent.
SECTION 7.9 Compliance With Agreements. Comply in all respects with
each term, condition and provision of all leases, agreements and other
instruments entered into in the conduct of its business including, without
limitation, any Material Contract except where the failure to comply could not
reasonably be expected to have a Material Adverse Effect; provided, that such
Borrower or such Subsidiary may contest any such lease, agreement or other
instrument in good faith through applicable proceedings so long as adequate
reserves are maintained in accordance with GAAP.
SECTION 7.10 Conduct of Business. Engage only in businesses in
substantially the same fields as the businesses conducted on the Closing Date.
SECTION 7.11 Visits and Inspections. Permit representatives of the
Agent or any Lender, from time to time, upon reasonable prior notice, during
normal business hours and, so long as no Default or Event of Default shall have
occurred and be continuing, at the sole cost of the Agent or such Lender, to
(a) visit and inspect its properties; (b) inspect, audit and make extracts from
its books, records and files, including, but not limited to, management letters
prepared by independent accountants; and (c) discuss with its principal
officers, and its independent accountants, its business, assets, liabilities,
financial condition, results of operations and business prospects.
SECTION 7.12. Additional Borrowers. Upon the creation of any Material
Subsidiary permitted by this Agreement or upon any Subsidiary becoming a
Material Subsidiary, cause to be executed and delivered to the Agent within ten
(10) Business Days after the creation of such Material Subsidiary or within ten
(10) Business Days after the date upon which financial statements are required
to be delivered pursuant to Section 6.1 which financial statements would
evidence that a Subsidiary has become a Material Subsidiary, as applicable, (a)
the joinder agreement attached as Exhibit H hereto executed by such new
Subsidiary, (b) the closing documents and certificates required of each of the
Borrowers pursuant to Section 4.2(b) and (e) hereof with respect to such new
Subsidiary and (c) such other documents reasonably requested by the Agent in
order that such Subsidiary shall become bound by
51
58
all of the terms, covenants and agreements contained in the Loan Documents. Upon
satisfaction of the conditions set forth in this Section 7.12, such Subsidiary
shall become a Borrower hereunder and under the other Loan Documents, as of such
date, as if an original signatory hereto and to the other Loan Documents. Upon
delivery to the Agent and the Lenders by Longhorn of the financial statements
required to be delivered pursuant to Section 6.1, which financial statements
evidence that a Subsidiary previously deemed to be a Material Subsidiary has
ceased to be a Material Subsidiary, the Agent and the Lenders shall execute such
release or cancellation documents necessary to evidence that such Subsidiary is
no longer liable for the Obligations hereunder.
SECTION 7.13 Further Assurances. Make, execute and deliver all such
additional and further acts, things, deeds and instruments as the Agent or any
Lender may reasonably require to document and consummate the transactions
contemplated hereby and to vest completely in and insure the Agent and the
Lenders their respective rights under this Agreement, the Notes and the other
Loan Documents.
ARTICLE VIII
FINANCIAL COVENANTS
Until all of the Obligations have been finally and indefeasibly paid
and satisfied in full and the Commitments terminated, unless consent has been
obtained in the manner set forth in Section 12.11 hereof, Longhorn and its
Subsidiaries on a Consolidated basis will not:
SECTION 8.1. Leverage Ratio. As of the end of any fiscal quarter,
permit the ratio of (a) the sum of (i) the Consolidated Debt of Longhorn and
its Subsidiaries as of such date plus (ii) the product of Rental Expense for
the period of four (4) consecutive fiscal quarters ending on such date
multiplied by eight (8) to (b) EBITDAR for the period of four (4) consecutive
fiscal quarters ending on such date, to exceed 3.25 to 1.00.
SECTION 8.2 Minimum Net Worth. Permit, at any time, Net Worth to be
less than (a) $109,000,000 plus (b) 50% of cumulative quarterly Consolidated
Net Income of Longhorn and its Subsidiaries commencing on September 30, 1996
(without deduction for any quarterly losses) plus (c) 100% of the net proceeds
received by Longhorn or any of its Subsidiaries of any equity issuance by
Longhorn or any of its Subsidiaries subsequent to the Closing Date.
SECTION 8.3. Interest Coverage Ratio. As of the end of any fiscal
quarter, permit the ratio of (a) EBITR for the period of
52
59
four (4) consecutive fiscal quarters ending on such date to (b) the sum of
Interest Expense for such period plus Rental Expense for such period, to be less
than 2.50 to 1.00.
SECTION 8.4. Capital Expenditures; Investments. Permit Capital
Expenditures and investments in joint ventures permitted pursuant to Section
9.4(e) to be greater than the following amounts in the aggregate during the
following Fiscal Years:
Fiscal Year Capital Expenditures
----------- --------------------
1997 $55,000,000
1998 $70,000,000
1999 and each
fiscal year
thereafter $85,000,000
; provided, that (a) investments in any single Non-Controlled Joint Venture
shall not exceed $3,500,000, (b) investments in Non-Controlled Joint Ventures
shall not exceed $20,000,000 in the aggregate on any date of determination and
(c) in no event shall more than sixty percent (60%) of aggregate Capital
Expenditures and investments permitted in any Fiscal Year be used for Capital
Expenditures or investments with respect to restaurants in any one specific
restaurant concept (e.g. Longhorn Steakhouse, Bugaboo Creek Steak House or The
Capital Grille). For the purposes of this Section 8.4 "Non-Controlled Joint
Venture" shall mean a joint venture in which (a) Longhorn and its Subsidiaries
own less than fifty percent (50%) of the outstanding capital stock or other
ownership interests having ordinary voting power to elect a majority of the
board of directors or other managers of such Person or (b) Longhorn and its
Subsidiaries own fifty percent (50%) of the outstanding capital stock or other
ownership interests having ordinary voting power to elect a majority of the
board of directors or other managers of such Person and are not otherwise in
control of the management of such Person.
SECTION 8.5. Debt to Capitalization. As of the end of any fiscal
quarter, permit the ratio of (a) the sum of (i) the Consolidated Debt of
Longhorn and its Subsidiaries as of such date plus (ii) the product of Rental
Expense for the period of four (4) consecutive fiscal quarters ending on such
date multiplied by eight (8) to (b) the sum of (i) Total Capital as of such
date plus (ii) the product of Rental Expense for the period of four (4)
consecutive fiscal quarters ending on such date multiplied by eight (8), to
exceed 0.55 to 1.00.
ARTICLE IX
NEGATIVE COVENANTS
53
60
Until all of the Obligations have been finally and indefeasibly paid
and satisfied in full and the Commitments terminated, unless consent has been
obtained in the manner set forth in Section 12.11 hereof, no Borrower will nor
will permit any of its Subsidiaries to:
SECTION 9.1 Limitations on Debt. Create, incur, assume or suffer to
exist any Debt except:
(a) the Obligations;
(b) Debt incurred in connection with a Hedging Agreement with a
counterparty and upon terms and conditions reasonably satisfactory to the Agent;
(c) Debt existing on the Closing Date and not otherwise permitted
under this Section 9.1, as set forth on Schedule 9.1 and the renewal and
refinancing (but not the increase) thereof;
(d) Debt of Longhorn and its Subsidiaries incurred in connection
with Capitalized Leases in an aggregate amount not to exceed $500,000 on any
date of determination;
(e) purchase money Debt of Longhorn and its Subsidiaries in an
aggregate amount not to exceed $500,000 on any date of determination;
(f) Debt consisting of Contingent Obligations permitted by Section
9.2;
(g) Debt owing to First Union pursuant to a line of credit
facility in an amount not to exceed $2,000,000 and Debt owing to First Union in
connection with letters of credit in an amount not to exceed $1,000,000;
(h) intercompany Debt permitted pursuant to Section 9.4(c);
(i) Debt of a Subsidiary outstanding at the time such Subsidiary
becomes a Subsidiary; provided, that (i) such Debt shall not have been incurred
in contemplation of such Subsidiary becoming a Subsidiary and (ii) immediately
after such Subsidiary becomes a Subsidiary no Default or Event of Default shall
exist;
(j) Debt incurred by Longhorn or one or more of its Subsidiaries
in connection with the purchase of joint venture interests in Persons in which
Longhorn and its Subsidiaries
54
61
already own an equity interest in an aggregate amount not to exceed $4,000,000
on any date of determination; and
(k) unsecured Debt not otherwise permitted hereunder in an
aggregate amount not to exceed $500,000 on any date of determination;
provided, that none of the instruments or agreements evidencing the Debt
permitted to be incurred by this Section shall, by covenant, subordination
provisions or other agreement, restrict, limit or otherwise encumber the ability
of any Subsidiary of any Borrower to make any payment to any Borrower or any of
its Subsidiaries (in the form of dividends, intercompany advances or otherwise)
for the purpose of enabling the Borrowers to pay the Obligations.
SECTION 9.2 Limitations on Contingent Obligations. Create, incur,
assume or suffer to exist any Contingent Obligations except:
(a) Contingent Obligations in favor of the Agent for the benefit
of the Agent and the Lenders;
(b) Contingent Obligations in an amount not to exceed $500,000 on
any date of determination;
(c) Contingent Obligations with respect to Debt permitted pursuant
to Section 9.1; and
(d) Contingent Obligations existing on the Closing Date and not
otherwise permitted under this Section 9.2, as set forth on Schedule 9.2.
SECTION 9.3 Limitations on Liens. Create, incur, assume or suffer to
exist, any Lien on or with respect to any of its assets or properties
(including without limitation shares of capital stock or other ownership
interests), real or personal, whether now owned or hereafter acquired, except:
(a) Liens for taxes, assessments and other governmental charges or
levies (excluding any Lien imposed pursuant to any of the provisions of ERISA or
Environmental Laws) not yet due or as to which the period of grace (not to
exceed thirty (30) days), if any, related thereto has not expired or which are
being contested in good faith and by appropriate proceedings if adequate
reserves are maintained to the extent required by GAAP;
(b) the claims of materialmen, mechanics, carriers, warehousemen,
processors or landlords for labor, materials,
55
62
supplies or rentals incurred in the ordinary course of business, (i) which are
not overdue for a period of more than thirty (30) days or (ii) which are being
contested in good faith and by appropriate proceedings;
(c) Liens consisting of deposits or pledges made in the ordinary
course of business in connection with, or to secure payment of, obligations
under workers' compensation, unemployment insurance or similar legislation;
(d) Liens constituting encumbrances in the nature of zoning
restrictions, easements and rights or restrictions of record on the use of real
property, which in the aggregate are not substantial in amount and which do not,
in any case, detract from the value of such property or impair the use thereof
in the ordinary conduct of business;
(e) Liens of the Agent for the benefit of the Agent and the
Lenders;
(f) any Lien existing on property of a Person immediately prior to
its being consolidated with or merged into any Borrower or a Subsidiary or its
becoming a Subsidiary, or any Lien existing on any property acquired by any
Borrower or any Subsidiary at the time such property is so acquired (so long as
the Debt secured thereby shall have been assumed and is otherwise permitted
under Section 9.1 or 9.2); provided, that (i) no such Lien shall have been
created or assumed in contemplation of such consolidation or merger or such
Person's becoming a Subsidiary or such acquisition of property, and (ii) each
such Lien shall extend solely to the item or items of property so acquired;
(g) Liens not otherwise permitted by this Section 9.3 and in
existence on the Closing Date and described on Schedule 9.3; and
(h) Liens securing Debt permitted under Sections 9.1(d), (e) and
(j); provided, that (i) such Liens shall be created substantially simultaneously
with the acquisition or lease of the related asset, (ii) such Liens do not at
any time encumber any property other than the property financed by such Debt,
(iii) the amount of Debt secured thereby is not increased and (iv) the principal
amount of Debt secured by any such Lien shall at no time exceed ninety percent
(90%) of the original purchase price or lease payment amount of such property at
the time it was acquired.
SECTION 9.4 Limitations on Loans, Advances, Investments and
Acquisitions. Purchase, own, invest in or otherwise acquire, directly or
indirectly, any capital stock,
56
63
interests in any partnership or joint venture (including without limitation the
creation or capitalization of any Subsidiary), evidence of Debt or other
obligation or security, substantially all or a portion of the business or assets
of any other Person or any other investment or interest whatsoever in any other
Person, or make or permit to exist, directly or indirectly, any loans, advances
or extensions of credit to, or any investment in cash or by delivery of property
in, any Person, or enter into, directly or indirectly, any commitment or option
in respect of the foregoing except:
(a) investments in Subsidiaries existing on the Closing Date and
the other existing loans, advances and investments described on Schedule 9.4;
(b) investments in (i) marketable direct obligations issued or
unconditionally guaranteed by the United States of America or any agency thereof
maturing within 120 days from the date of acquisition thereof, (ii) commercial
paper maturing no more than 120 days from the date of creation thereof and
currently having the highest rating obtainable from either Standard & Poor's
Ratings Services, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. or ▇▇▇▇▇'▇
Investors Service, Inc., (iii) certificates of deposit maturing no more than 120
days from the date of creation thereof issued by commercial banks incorporated
under the laws of the United States of America, each having combined capital,
surplus and undivided profits of not less than $500,000,000 and having a rating
of "A" or better by a nationally recognized rating agency; provided, that the
aggregate amount invested in such certificates of deposit shall not at any time
exceed $5,000,000 for any one such certificate of deposit and $10,000,000 for
any one such bank, or (iv) time deposits maturing no more than 30 days from the
date of creation thereof with commercial banks or savings banks or savings and
loan associations each having membership either in the FDIC or the deposits of
which are insured by the FDIC and in amounts not exceeding the maximum amounts
of insurance thereunder;
(c) loans or advances by Longhorn or any other Borrower whose
liability has not been limited pursuant to Section 2.8 to any Subsidiary of
Longhorn; provided, that Longhorn controls, either directly or indirectly, the
ability of such Subsidiary to make payments to Longhorn or such Borrower (in the
form of dividends, intercompany advances, or otherwise);
(d) acquisitions by Longhorn or any of its Subsidiaries (whether
by the acquisition of equity interests, assets or any combination thereof) if
each such acquisition meets all of the following requirements: (i) the Person
whose equity interest is to be acquired shall be or, as a result of such
57
64
acquisition shall become, a Subsidiary, (ii) the Person whose equity interest is
to be acquired shall engage in a business or the assets being acquired are to be
used in a business described in Section 7.10, (iii) no Default or Event of
Default shall have occurred and be continuing both before and after giving
effect to the acquisition, (iv) the fair market value of all consideration paid
(including, without limitation, cash consideration paid, Debt assumed and the
value of any stock transferred in any "pooling of interests" or otherwise in
connection with such acquisition or investment) in connection with any
individual acquisition shall not exceed $10,000,000 and (v) the fair market
value of all consideration paid (including, without limitation, cash
consideration paid, Debt assumed and the value of any stock transferred in any
"pooling of interests" or otherwise in connection with such acquisition) in
connection with all such acquisitions in the aggregate shall not exceed
$25,000,000 in any Fiscal Year;
(e) investments by Longhorn or any of its Subsidiaries in joint
ventures engaged in a business described in Section 7.10; provided, that the
aggregate amount of investments made pursuant hereto, together with aggregate
Capital Expenditures, shall not exceed the limitations set forth in Section 8.4;
(f) loans by Longhorn to any Person with which Longhorn is
diligently and in good faith negotiating a joint venture agreement in an
aggregate amount not to exceed $2,000,000; and
(g) loans and advances to employees in the ordinary course of
business in an aggregate amount not to exceed $500,000 at any time.
SECTION 9.5 Limitations on Mergers and Liquidation. Merge,
consolidate or enter into any similar combination with any other Person or
liquidate, wind-up or dissolve itself (or suffer any liquidation or
dissolution) except:
(a) any Wholly-Owned Subsidiary of Longhorn which is not a
Borrower may merge with or wind-up into Longhorn or any other Wholly-owned
Subsidiary of Longhorn; and
(b) any Subsidiary may merge into the Person such Subsidiary was
formed to acquire in connection with an acquisition permitted by Section 9.4(d).
SECTION 9.6 Limitations on Sale of Assets. Convey, sell, lease,
assign, transfer or otherwise dispose of any of its property, business or
assets (including, without limitation, the
58
65
sale of any receivables and leasehold interests and any saleleaseback or similar
transaction), whether now owned or hereafter acquired except:
(a) the sale of inventory in the ordinary course of business;
(b) the sale of obsolete assets no longer used or usable in the
business of Longhorn or any of its Subsidiaries;
(c) the transfer of assets to Longhorn or any Wholly-Owned
Subsidiary of Longhorn pursuant to Section 9.5(a);
(d) the sale or discount without recourse of accounts receivable
arising in the ordinary course of business in connection with the compromise or
collection thereof;
(e) the transfer of assets by any Subsidiary who is not a Borrower
to any Wholly-Owned Subsidiary of Longhorn; and
(f) the sale, lease, assignment or transfer of restaurants by
Longhorn or any Subsidiary thereof to any non-Wholly-Owned Subsidiary; provided,
that each such sale or transfer shall not include more than ten (10)
restaurants; and
(g) the sale, lease, assignment or transfer of restaurants not
otherwise permitted hereunder; provided, that the aggregate number of
restaurants so sold in any period of four (4) consecutive fiscal quarters shall
not exceed five (5).
SECTION 9.7 Limitations on Dividends and Distributions. Declare or
pay any dividends upon any of its capital stock; purchase, redeem, retire or
otherwise acquire, directly or indirectly, any shares of its capital stock, or
make any distribution of cash, property or assets among the holders of shares
of its capital stock, or make any change in its capital structure that could
reasonably be expected to have a Material Adverse Effect; provided, that:
(a) Longhorn or any Subsidiary may pay dividends in shares of its
own capital stock;
(b) any Subsidiary may pay cash dividends or make cash
distributions to any Borrower;
(c) any Subsidiary may make cash distributions to its equity
holders; provided, that such distributions are made to each equity holder pro
rata in accordance with its equity ownership interest; and
59
66
(d) Longhorn or any Subsidiary thereof may purchase joint venture
interests to the extent permitted or required pursuant to any joint venture
agreement to which such Person is a party; provided, that such acquisition would
otherwise be permitted pursuant to Section 9.4(d).
SECTION 9.8 Transactions with Affiliates. To the extent not otherwise
expressly permitted herein, directly or indirectly: (a) make any loan or
advance to, or purchase or assume any note or other obligation to or from, any
of its officers, directors, shareholders or other Affiliates, or to or from any
member of the immediate family of any of its officers, directors, shareholders
or other Affiliates, or subcontract any operations to any of its Affiliates, or
(b) enter into, or be a party to, any transaction with any of its Affiliates,
except pursuant to the reasonable requirements of its business and upon fair
and reasonable terms that are fully disclosed to the Required Lenders and are
no less favorable to it than it would obtain in a comparable arm's length
transaction with a Person not its Affiliate.
SECTION 9.9 Certain Accounting Changes. Change its Fiscal Year end, or
make any change in its accounting treatment and reporting practices except as
required by GAAP.
SECTION 9.10 Amendments; Payments and Prepayments of Subordinated
Debt. Amend or modify (or permit the modification or amendment of) any of the
terms or provisions of any Subordinated Debt, or cancel or forgive, make any
voluntary or optional payment or prepayment on, or redeem or acquire for value
(including without limitation by way of depositing with any trustee with
respect thereto money or securities before due for the purpose of paying when
due) any Subordinated Debt.
SECTION 9.11 Restrictive Agreements. Enter into any Debt which
contains any negative pledge on assets or any covenants more restrictive than
the provisions of Articles VII, VIII and IX hereof, or which restricts, limits
or otherwise encumbers its ability to incur Liens on or with respect to any of
its assets or properties other than the assets or properties securing such
Debt.
ARTICLE X
DEFAULT AND REMEDIES
60
67
SECTION 10.1 Events of Default. Each of the following shall
constitute an Event of Default, whatever the reason for such event and whether
it shall be voluntary or involuntary or be effected by operation of law or
pursuant to any judgment or order of any court or any order, rule or regulation
of any Governmental Authority or otherwise:
(a) Default in Payment of Principal of Loans. The Borrowers
shall default in any payment of principal of any Loan or Note when and as due
(whether at maturity, by reason of acceleration or otherwise).
(b) Other Payment Default. The Borrowers shall default in the
payment when and as due (whether at maturity, by reason of acceleration or
otherwise) of interest on any Loan or Note or the payment of any other
Obligation, and such default shall continue unremedied for three (3) Business
Days.
(c) Misrepresentation. Any representation or warranty made or
deemed to be made by any Borrower or any of its Subsidiaries under this
Agreement, any Loan Document or any amendment hereto or thereto, shall at any
time prove to have been incorrect or misleading in any material respect when
made or deemed made.
(d) Default in Performance of Certain Covenants. The Borrowers
shall default in the performance or observance of any covenant or agreement
contained in Sections 6.2 and 6.4(e) or Articles VIII or IX (excluding Sections
9.8 and 9.9) of this Agreement.
(e) Default in Performance of Other Covenants and Conditions.
Any Borrower or any Subsidiary thereof shall default in the performance or
observance of any term, covenant, condition or agreement contained in this
Agreement (other than as specifically provided for otherwise in this Section
10.1) or any other Loan Document and such default shall continue for a period of
thirty (30) days after written notice thereof has been given to the Borrowers by
the Agent.
(f) Hedging Agreement. Any termination payment shall be due by
the Borrowers under any Hedging Agreement and such amount is not paid within ten
(10) Business Days of the due date thereof.
(g) Debt Cross-Default. Any Borrower or any of its
Subsidiaries shall (i) default in the payment of any Debt (other than the Notes)
the aggregate outstanding amount of which Debt is in excess of $500,000 beyond
the period of grace if any, provided in the instrument or agreement under which
such Debt was created,
61
68
or (ii) default in the observance or performance of any other agreement or
condition relating to any Debt (other than the Notes) the aggregate outstanding
amount of which Debt is in excess of $500,000 or contained in any instrument or
agreement evidencing, securing or relating thereto or any other event shall
occur or condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of such Debt (or a
trustee or agent on behalf of such holder or holders) to cause, with the giving
of notice if required, any such Debt to become due prior to its stated maturity
(any applicable grace period having expired).
(h) Other Cross-Defaults. Any Borrower or any of its
Subsidiaries shall default in the payment when due, or in the performance or
observance, of any obligation or condition of any Material Contract unless, but
only as long as, the existence of any such default is being contested by such
Borrower or such Subsidiary in good faith by appropriate proceedings and
adequate reserves in respect thereof have been established on the books of such
Borrower or such Subsidiary to the extent required by GAAP.
(i) Change in Control. Any person or group of persons shall
obtain "beneficial ownership" (within the meaning of Section 13 (d) of the
Securities Exchange Act of 1934, as amended) in one or more series of
transactions of more than thirty percent (30%) of the voting power of Longhorn
entitled to vote in the election of members of the board of directors of
Longhorn or there shall have occurred under any indenture or other instrument
evidencing any Debt in excess of $500,000 any "change in control" (as defined in
such indenture or other evidence of Debt) obligating any Borrower to repurchase,
redeem or repay all or any part of the Debt or capital stock provided for
therein (any such event, a "Change in Control").
(j) Voluntary Bankruptcy Proceeding. Any Borrower or any
Material Subsidiary shall (i) commence a voluntary case under the federal
bankruptcy laws (as now or hereafter in effect), (ii) file a petition seeking to
take advantage of any other laws, domestic or foreign, relating to bankruptcy,
insolvency, reorganization, winding up or composition for adjustment of debts,
(iii) consent to or fail to contest in a timely and appropriate manner any
petition filed against it in an involuntary case under such bankruptcy laws or
other laws, (iv) apply for or consent to, or fail to contest in a timely and
appropriate manner, the appointment of, or the taking of possession by, a
receiver, custodian, trustee, or liquidator of itself or of a substantial part
of its property, domestic or foreign, (v) admit in writing its inability to pay
its debts as they become due, (vi) make a general assignment for the benefit
62
69
of creditors, or (vii) take any corporate action for the purpose of authorizing
any of the foregoing.
(k) Involuntary Bankruptcy Proceeding. A case or other
proceeding shall be commenced against any Borrower or any Material Subsidiary in
any court of competent jurisdiction seeking (i) relief under the federal
bankruptcy laws (as now or hereafter in effect) or under any other laws,
domestic or foreign, relating to bankruptcy, insolvency, reorganization, winding
up or adjustment of debts, or (ii) the appointment of a trustee, receiver,
custodian, liquidator or the like for such Borrower or Material Subsidiary or
for all or any substantial part of their respective assets, domestic or foreign,
and such case or proceeding shall continue without dismissal or stay for a
period of sixty (60) consecutive days, or an order granting the relief requested
in such case or proceeding (including, but not limited to, an order for relief
under such federal bankruptcy laws) shall be entered.
(l) Termination Event. The occurrence of any of the following
events that, individually or in the aggregate, results in or could reasonably be
expected to result in a Material Adverse Effect: (i) any Borrower or any ERISA
Affiliate fails to make full payment when due of all amounts which, under the
provisions of any Pension Plan or Section 412 of the Code, such Borrower or any
ERISA Affiliate is required to pay as contributions thereto, (ii) an accumulated
funding deficiency in excess of $250,000 occurs or exists, whether or not
waived, with respect to any Pension Plan, (iii) a Termination Event or (iv) any
Borrower or any ERISA Affiliate as employer under one or more Multiemployer
Plans makes a complete or partial withdrawal from any such Multiemployer Plan
and the plan sponsor of any such Multiemployer Plan notifies such withdrawing
employer that such employer has incurred a withdrawal liability requiring
payments in an amount exceeding $250,000.
(n) Judgment. A judgment or order for the payment of money
which causes the aggregate amount of all such judgments to exceed $250,000 in
any Fiscal Year (excluding any amounts which any Borrower's insurance carrier
has affirmatively agreed in writing are covered by insurance) shall be entered
against any Borrower or any Subsidiary thereof by any court and such judgment or
order shall continue without discharge or stay for a period of thirty (30) days.
SECTION 10.2 Remedies. Upon the occurrence of an Event of Default,
with the consent of the Required Lenders, the Agent may, or upon the request of
the Required Lenders, the Agent shall, by notice to the Borrowers:
63
70
(a) Acceleration; Termination of Facilities. Declare the
principal of and interest on the Loans and the Notes at the time outstanding,
and all other amounts owed to the Lenders and to the Agent under this Agreement
or any of the other Loan Documents and all other Obligations, to be forthwith
due and payable, whereupon the same shall immediately become due and payable
without presentment, demand, protest or other notice of any kind, all of which
are expressly waived, anything in this Agreement or the other Loan Documents to
the contrary notwithstanding, and terminate the Credit Facility and any right of
the Borrowers to request borrowings thereunder; provided, that upon the
occurrence of an Event of Default specified in Section 10.1(j) or (k), the
Credit Facility shall be automatically terminated and all Obligations shall
automatically become due and payable.
(b) Other Rights. Exercise on behalf of the Lenders all of its
other rights and remedies under this Agreement, the other Loan Documents and
Applicable Law, in order to satisfy all of the Borrowers' Obligations.
SECTION 10.3 Rights and Remedies Cumulative; Non-Waiver; etc. The
enumeration of the rights and remedies of the Agent and the Lenders set forth
in this Agreement is not intended to be exhaustive and the exercise by the
Agent and the Lenders of any right or remedy shall not preclude the exercise of
any other rights or remedies, all of which shall be cumulative, and shall be in
addition to any other right or remedy given hereunder or under the Loan
Documents or that may now or hereafter exist in law or in equity or by suit or
otherwise. No delay or failure to take action on the part of the Agent or any
Lender in exercising any right, power or privilege shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or
privilege preclude other or further exercise thereof or the exercise of any
other right, power or privilege or be construed to be a waiver of any Event of
Default. No course of dealing between any Borrower, the Agent and the Lenders
or their respective agents or employees shall be effective to change, modify or
discharge any provision of this Agreement or any of the other Loan Documents or
to constitute a waiver of any Event of Default.
ARTICLE XI
THE AGENT
SECTION 11.1 Appointment. Each of the Lenders hereby irrevocably
designates and appoints First Union as Agent of such Lender under this
Agreement and the other Loan Documents and each such Lender irrevocably
authorizes First Union as Agent for such
64
71
Lender, to take such action on its behalf under the provisions of this Agreement
and the other Loan Documents and to exercise such powers and perform such duties
as are expressly delegated to the Agent by the terms of this Agreement and such
other Loan Documents, together with such other powers as are reasonably
incidental thereto. Notwithstanding any provision to the contrary elsewhere in
this Agreement or such other Loan Documents, the Agent shall not have any duties
or responsibilities, except those expressly set forth herein and therein, or any
fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or the other Loan Documents or otherwise exist against the Agent.
SECTION 11.2 Delegation of Duties. The Agent may execute any of its
respective duties under this Agreement and the other Loan Documents by or
through agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Agent shall not be
responsible for the negligence or misconduct of any agents or attorneys-in-fact
selected by the Agent with reasonable care.
SECTION 11.3 Exculpatory Provisions. Neither the Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact, Subsidiaries or
Affiliates shall be (a) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or the
other Loan Documents (except for actions occasioned solely by its or such
Person's own gross negligence or willful misconduct), or (b) responsible in any
manner to any of the Lenders for any recitals, statements, representations or
warranties made by any Borrower or any of its Subsidiaries or any officer
thereof contained in this Agreement or the other Loan Documents or in any
certificate, report, statement or other document referred to or provided for
in, or received by the Agent under or in connection with, this Agreement or the
other Loan Documents or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or the other Loan Documents or
for any failure of any Borrower or any of its Subsidiaries to perform its
obligations hereunder or thereunder. The Agent shall not be under any
obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement, or to inspect the properties, books or records of any Borrower or
any of their respective Subsidiaries.
SECTION 11.4 Reliance by the Agent. The Agent shall be entitled to
rely, and shall be fully protected in relying, upon any note, writing,
resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, telecopy, telex or
65
72
teletype message, statement, order or other document or conversation believed by
it to be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel (including,
without limitation, counsel to the Borrowers), independent accountants and other
experts selected by the Agent. The Agent may deem and treat the payee of any
Note as the owner thereof for all purposes unless such Note shall have been
transferred in accordance with Section 12.10 hereof. The Agent shall be fully
justified in failing or refusing to take any action under this Agreement and the
other Loan Documents unless it shall first receive such advice or concurrence of
the Required Lenders (or, when expressly required hereby or by the relevant
other Loan Document, all the Lenders) as it deems appropriate or it shall first
be indemnified to its satisfaction by the Lenders against any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action except for its own gross negligence or willful misconduct.
The Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement and the Notes in accordance with a request of the
Required Lenders (or, when expressly required hereby, all the Lenders), and such
request and any action taken or failure to act pursuant thereto shall be binding
upon all the Lenders and all future holders of the Notes.
SECTION 11.5 Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless it has received notice from a Lender or the Borrowers
referring to this Agreement, describing 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, it shall promptly give notice thereof to the Lenders.
The Agent shall take such action with respect to such Default or Event of
Default as shall be reasonably directed by the Required Lenders; 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 Lenders.
SECTION 11.6 Non-Reliance on the Agent and Other Lenders. Each Lender
expressly acknowledges that neither the Agent nor any of its respective
officers, directors, employees, agents, attorneys-in-fact, Subsidiaries or
Affiliates has made any representations or warranties to it and that no act by
the Agent hereinafter taken, including any review of the affairs of Longhorn or
any of its Subsidiaries, shall be deemed to constitute any representation or
warranty by the Agent to any Lender. Each Lender represents to the Agent that
it has,
66
73
independently and without reliance upon the Agent or any other Lender, and based
on such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of Longhorn and its
Subsidiaries and made its own decision to make its Loans hereunder and enter
into this Agreement. Each Lender also represents that it will, independently and
without reliance upon the Agent or any other Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit analysis, appraisals and decisions in taking or not taking action
under this Agreement and the other Loan Documents, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of
Longhorn and its Subsidiaries. Except for notices, reports and other documents
expressly required to be furnished to the Lenders by the Agent hereunder or by
the other Loan Documents, the Agent shall not have any duty or responsibility to
provide any Lender with any credit or other information concerning the business,
operations, property, financial and other condition or creditworthiness of any
Borrower or any Subsidiary which may come into the possession of the Agent or
any of its respective officers, directors, employees, agents, attorneys-in-fact,
Subsidiaries or Affiliates.
SECTION 11.7 Indemnification. The Lenders agree to indemnify the Agent
in its capacity as such and (to the extent not reimbursed by the Borrowers and
without limiting the obligation of the Borrowers to do so), ratably according
to the respective amounts of their Commitment Percentages, from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind whatsoever which
may at any time (including, without limitation, at any time following the
payment of the Notes) be imposed on, incurred by or asserted against the Agent
in any way relating to or arising out of this Agreement or the other Loan
Documents, or any documents contemplated by or referred to herein or therein or
the transactions contemplated hereby or thereby or any action taken or omitted
by the Agent under or in connection with any of the foregoing; provided, that
no Lender shall be liable for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting solely from the Agent's bad faith, gross
negligence or willful misconduct. The agreements in this Section 11.7 shall
survive the payment of the Notes and all other amounts payable hereunder and
the termination of this Agreement.
SECTION 11.8 The Agent in Its Individual Capacity. The Agent and its
respective Subsidiaries and Affiliates may make
67
74
loans to, accept deposits from and generally engage in any kind of business with
the Borrowers as though the Agent were not an Agent hereunder. With respect to
any Loans made or renewed by it and any Note issued to it, the Agent shall have
the same rights and powers under this Agreement and the other Loan Documents as
any Lender and may exercise the same as though it were not an Agent, and the
terms "Lender" and "Lenders" shall include the Agent in its individual capacity.
SECTION 11.9 Resignation of the Agent; Successor Agent. Subject to
the appointment and acceptance of a successor as provided below, the Agent may
resign at any time by giving notice thereof to the Lenders and the Borrowers.
Upon any such resignation, the Required Lenders shall have the right to appoint
a successor Agent, which successor shall have minimum capital and surplus of at
least $500,000,000. If no successor Agent shall have been so appointed by the
Required Lenders and shall have accepted such appointment within thirty (30)
days after the Agent's giving of notice of resignation, then the Agent may, on
behalf of the Lenders, appoint a successor Agent, which successor shall have
minimum capital and surplus of at least $500,000,000. 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 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 hereunder as Agent, the provisions of this Section 11.9
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 Agent.
SECTION 11.10 Co-Agent. The Co-Agent, in its capacity as co-agent,
shall have no duties or responsibilities under this Agreement or any other Loan
Document.
ARTICLE XII
MISCELLANEOUS
SECTION 12.1 Notices.
(a) Method of Communication. Except as otherwise provided in
this Agreement, all notices and communications hereunder shall be in writing, or
by telephone subsequently confirmed in writing. Any notice shall be effective if
delivered by hand delivery or sent via telecopy, recognized overnight courier
68
75
service or certified mail, return receipt requested, and shall be presumed to be
received by a party hereto (i) on the date of delivery if delivered by hand or
sent by telecopy, (ii) on the next Business Day if sent by recognized overnight
courier service and (iii) on the third Business Day following the date sent by
certified mail, return receipt requested. A telephonic notice to the Agent as
understood by the Agent will be deemed to be the controlling and proper notice
in the event of a discrepancy with or failure to receive a confirming written
notice.
(b) Addresses for Notices. Notices to any party shall be sent
to it at the following addresses, or any other address as to which all the other
parties are notified in writing.
If to the Borrowers: Longhorn Steaks, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇. #▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
With copies to: ▇▇▇▇▇▇ & Bird
One Atlantic Center
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to First Union as First Union National Bank of
Agent: Georgia
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Portfolio Management
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
and
First Union National Bank of
North Carolina
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Syndication Agency Services
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to any Lender: To the Address set forth on Schedule 1 hereto
69
76
(c) Agent's Office. The Agent hereby designates its office
located at the address set forth above, or any subsequent office which shall
have been specified for such purpose by written notice to the Borrowers and
Lenders, as the Agent's Office referred to herein, to which payments due are to
be made and at which Loans will be disbursed.
SECTION 12.2 Expenses; Indemnity. The Borrowers will (a) pay all
reasonable out-of-pocket expenses of the Agent actually incurred in connection
with: (i) the preparation, execution and delivery of this Agreement and each
other Loan Document, whenever the same shall be executed and delivered,
including without limitation all out-of-pocket syndication and due diligence
expenses and reasonable fees and disbursements of counsel for the Agent, (ii)
the preparation, execution and delivery of any waiver, amendment or consent by
the Agent or the Lenders relating to this Agreement or any other Loan Document,
including without limitation reasonable fees and disbursements of counsel for
the Agent (b) pay all reasonable out-of-pocket expenses of the Agent and each
Lender actually incurred in connection with the administration and enforcement
of any rights and remedies of the Agent and Lenders under the Credit Facility,
including consulting with appraisers, accountants, engineers, attorneys and
other Persons concerning the nature, scope or value of any right or remedy of
the Agent or any Lender hereunder or under any other Loan Document or any
factual matters in connection therewith, which expenses shall include without
limitation the reasonable fees and disbursements of such Persons, and (c)
defend, indemnify and hold harmless the Agent and the Lenders, and their
respective parents, Subsidiaries, Affiliates, employees, agents, officers and
directors, from and against any losses, penalties, fines, liabilities,
settlements, damages, costs and expenses, suffered by any such Person in
connection with any claim, investigation, litigation or other proceeding
(whether or not the Agent or any Lender is a party thereto) and the prosecution
and defense thereof, arising out of or in any way connected with the Agreement,
any other Loan Document or the Loans, including without limitation reasonable
attorney's and consultant's fees, except to the extent that any of the
foregoing directly result from the gross negligence or willful misconduct of
the party seeking indemnification therefor.
SECTION 12.3 Set-off. In addition to any rights now or hereafter
granted under Applicable Law and not by way of limitation of any such rights,
upon and during the continuance of any Event of Default, the Lenders and any
assignee or participant of a Lender in accordance with Section 12.10 are hereby
70
77
authorized by the Borrowers at any time or from time to time, without notice to
the Borrowers or to any other Person, any such notice being hereby expressly
waived, to set off and to appropriate and to apply any and all deposits (general
or special, time or demand, including, but not limited to, indebtedness
evidenced by certificates of deposit, whether matured or unmatured) and any
other indebtedness at any time held or owing by the Lenders, or any such
assignee or participant to or for the credit or the account of any Borrower
against and on account of the obligations irrespective of whether or not (a) the
Lenders shall have made any demand under this Agreement or any of the other Loan
Documents or (b) the Agent shall have declared any or all of the Obligations to
be due and payable as permitted by Section 10.2 and although such Obligations
shall be contingent or unmatured. If any Lender (or assignee or participant)
shall exercise any of the rights referred to in this Section, such Lender (or
assignee) shall promptly notify the Borrowers, all other Lenders and the Agent
thereof; provided, that the failure to give such notice shall not result in any
liability to such Lender or in any way affect the validity of the exercise of
such right.
SECTION 12.4 Governing Law. This Agreement, the Notes and the other
Loan Documents, unless otherwise expressly set forth therein, shall be governed
by, construed and enforced in accordance with the laws of the State of North
Carolina, without reference to the conflicts or choice of law principles
thereof.
SECTION 12.5 Consent to Jurisdiction. Each Borrower hereby irrevocably
consents to the personal jurisdiction of the state and federal courts located
in Mecklenburg County, North Carolina, in any action, claim or other proceeding
arising out of any dispute in connection with this Agreement, the Notes and the
other Loan Documents, any rights or obligations hereunder or thereunder, or the
performance of such rights and obligations. Each Borrower hereby irrevocably
consents to the service of a summons and complaint and other process in any
action, claim or proceeding brought by the Agent or any Lender in connection
with this Agreement, the Notes or the other Loan Documents, any rights or
obligations hereunder or thereunder, or the performance of such rights and
obligations, on behalf of itself or its property, in the manner specified in
Section 12.1. Nothing in this Section 12.5 shall affect the right of the Agent
or any Lender to serve legal process in any other manner permitted by
Applicable Law or affect the right of the Agent or any Lender to bring any
action or proceeding against any Borrower or its properties in the courts of
any other jurisdictions.
SECTION 12.6 Binding Arbitration; Waiver of Jury Trial.
71
78
(a) Binding Arbitration. Upon demand of any party, whether
made before or after institution of any judicial proceeding, any dispute, claim
or controversy arising out of, connected with or relating to the Notes or any
other Loan Documents ("Disputes"), between or among parties to the Notes or any
other Loan Document shall be resolved by binding arbitration as provided herein.
Institution of a judicial proceeding by a party does not waive the right of that
party to demand arbitration hereunder. Disputes may include, without limitation,
tort claims, counterclaims, claims brought as class actions, claims arising from
Loan Documents executed in the future, or claims concerning any aspect of the
past, present or future relationships arising out of or connected with the Loan
Documents. Arbitration shall be conducted under and governed by the Commercial
Financial Disputes Arbitration Rules (the "Arbitration Rules") of the American
Arbitration Association and Title 9 of the U.S. Code. All arbitration hearings
shall be conducted in Charlotte, North Carolina. The expedited procedures set
forth in Rule 51, et seq. of the Arbitration Rules shall be applicable to claims
of less than $1,000,000. All applicable statutes of limitation shall apply to
any Dispute. A judgment upon the award may be entered in any court having
jurisdiction. The panel from which all arbitrators are selected shall be
comprised of licensed attorneys. The single arbitrator selected for expedited
procedure shall be a retired judge from the highest court of general
jurisdiction, state or federal, of the state where the hearing will be
conducted. Notwithstanding the foregoing, this paragraph shall not apply to any
Hedging Agreement that is a Loan Document.
(b) Jury Trial. TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE
AGENT, EACH LENDER AND EACH BORROWER HEREBY IRREVOCABLY WAIVE THEIR RESPECTIVE
RIGHTS TO A JURY TRIAL WITH RESPECT TO ANY ACTION, CLAIM OR OTHER PROCEEDING
ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT, THE NOTES OR THE
OTHER LOAN DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER, OR THE
PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS.
(c) Preservation of Certain Remedies. Notwithstanding the
preceding binding arbitration provisions, the parties hereto and to the other
Loan Documents preserve, without diminution, certain remedies that such Persons
may employ or exercise freely, either alone or in conjunction with or during a
Dispute. Each such Person shall have and hereby reserves the right to proceed in
any court of proper jurisdiction or by self help to exercise or prosecute the
following remedies: (i) all rights to foreclose against any real or personal
property or other security by exercising a power of sale granted in the Loan
Documents or under applicable law or by judicial foreclosure and sale, (ii) all
rights of self help including peaceful occupation of property and
72
79
collection of rents, set off, and peaceful possession of property, (iii)
obtaining provisional or ancillary remedies including injunctive relief,
sequestration, garnishment, attachment, appointment of receiver and filing an
involuntary bankruptcy proceeding, and (iv) when applicable, a judgment by
confession of judgment. Preservation of these remedies does not limit the power
of an arbitrator to grant similar remedies that may be requested by a party in a
Dispute.
SECTION 12.7 Reversal of Payments. To the extent the Borrowers make a
payment or payments to the Agent for the ratable benefit of the Lenders or the
Agent receives any payment or proceeds of the collateral which payments or
proceeds or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside and/or required to be repaid to a
trustee, receiver or any other party under any bankruptcy law, state or federal
law, common law or equitable cause, then, to the extent of such payment or
proceeds repaid, the Obligations or part thereof intended to be satisfied shall
be revived and continued in full force and effect as if such payment or
proceeds had not been received by the Agent.
SECTION 12.8 Punitive Damages. The Agent, Lenders and Borrowers (on
behalf of themselves and their Subsidiaries) hereby agree that no such Person
shall have a remedy of punitive or exemplary damages against any other party to
a Loan Document and each such Person hereby waives any right or claim to
punitive or exemplary damages that they may now have or may arise in the future
in connection with any Dispute, whether such Dispute is resolved through
arbitration or judicially.
SECTION 12.9 Accounting Matters. All financial and accounting
calculations, measurements and computations made for any purpose relating to
this Agreement, including, without limitation, all computations utilized by
Longhorn or any Subsidiary thereof to determine compliance with any covenant
contained herein, shall, except as otherwise expressly contemplated hereby or
unless there is an express written direction by the Agent to the contrary
agreed to by Longhorn, be performed in accordance with GAAP as in effect on the
Closing Date. In the event that changes in GAAP shall be mandated by the
Financial Accounting Standards Board, or any similar accounting body of
comparable standing, or shall be recommended by Longhorn's certified public
accountants, to the extent that such changes would modify such accounting terms
or the interpretation or computation thereof, such changes shall be followed in
defining such accounting terms only from and after the date the Borrowers and
the Lenders shall have amended this Agreement to the extent necessary to
reflect any such changes in the financial covenants and other terms and
conditions of this Agreement.
73
80
SECTION 12.10 Successors and Assigns; Participations.
(a) Benefit of Agreement. This Agreement shall be binding upon
and inure to the benefit of the Borrowers, the Agent and the Lenders, all future
holders of the Notes, and their respective successors and assigns, except that
the Borrowers shall not assign or transfer any of their rights or obligations
under this Agreement without the prior written consent of each Lender.
(b) Assignment by Lenders. Each Lender may, with the consent
of the Agent and Longhorn, which consents shall not be unreasonably withheld or
delayed, assign to one or more Eligible Assignees all or a portion of its
interests, rights and obligations under this Agreement (including, without
limitation, all or a portion of the Loans at the time owing to it and the Notes
held by it); provided, that:
(i) each such assignment shall be of a constant, and not a
varying, percentage of all the assigning Lender's rights and obligations under
this Agreement;
(ii) if less than all of the assigning Lender's Commitment
is to be assigned, neither the Commitment so assigned nor the Commitment
retained shall be less than $5,000,000;
(iii) the parties to each such assignment shall execute and
deliver to the Agent, for its acceptance and recording in the Register, an
Assignment and Acceptance in the form of Exhibit F attached hereto (an
"Assignment and Acceptance"), together with any Note or Notes subject to such
assignment;
(iv) such assignment shall not, without the consent of
Longhorn, require any Borrower to file a registration statement with the
Securities and Exchange Commission or apply to or qualify the Loans or the Notes
under the blue sky laws of any state; and
(v) the assigning Lender shall pay to the Agent an
assignment fee of $3,000 upon the execution by such Lender of the Assignment and
Acceptance; provided, that no such fee shall be payable upon any assignment by a
Lender to an Affiliate thereof.
Upon such execution, delivery, acceptance and recording, from and after the
effective date specified in each Assignment and Acceptance, which effective date
shall be at least five (5) Business Days after the execution thereof, (A) the
assignee thereunder
74
81
shall be a party hereto and, to the extent provided in such Assignment and
Acceptance, have the rights and obligations of a Lender hereby and (B) the
Lender thereunder shall, to the extent provided in such assignment, be released
from its obligations under this Agreement.
(c) Rights and Duties Upon Assignment. By executing and
delivering an Assignment and Acceptance, the assigning Lender thereunder and the
assignee thereunder confirm to and agree with each other and the other parties
hereto as set forth in such Assignment and Acceptance.
(d) Register. The Agent shall maintain a copy of each
Assignment and Acceptance delivered to it and a register for the recordation of
the names and addresses of the Lenders and the amount of the Loans with respect
to each Lender from time to time (the "Register"). The entries in the Register
shall be conclusive, in the absence of manifest error, and the Borrowers, the
Agent and the Lenders may treat each person whose name is recorded in the
Register as a Lender hereunder for all purposes of this Agreement. The Register
shall be available for inspection by the Borrowers or Lender at any reasonable
time and from time to time upon reasonable prior notice.
(e) Issuance of New Notes. Upon its receipt of an Assignment
and Acceptance executed by an assigning Lender and an Eligible Assignee together
with any Note or Notes subject to such assignment and the written consent to
such assignment, the Agent shall, if such Assignment and Acceptance has been
completed and is substantially in the form of Exhibit F:
(i) accept such Assignment and Acceptance;
(ii) record the information contained therein in the
Register;
(iii) give prompt notice thereof to the Lenders and
the Borrowers; and
(iv) promptly deliver a copy of such Assignment and
Acceptance to the Borrowers.
Within five (5) Business Days after receipt of notice, the Borrowers shall
execute and deliver to the Agent, in exchange for the surrendered Note or Notes
a new Note or Notes to the order of such Eligible Assignee in amounts equal to
the Commitment assumed by it pursuant to such Assignment and Acceptance and a
new Note or Notes to the order of the assigning Lender in an amount equal to the
Commitment retained by it hereunder. Such new Note or Notes shall be in an
aggregate principal amount equal to the
75
82
aggregate principal amount of such surrendered Note or Notes, shall be dated the
effective date of such Assignment and Acceptance and shall otherwise be in
substantially the form of the assigned Notes delivered to the assigning Lender.
Each surrendered Note or Notes shall be canceled and returned to the Borrowers.
(f) Participations. Each Lender may sell participations to one
or more banks or other entities in all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a
portion of its Loans and the Notes held by it); provided, that:
(i) each such participation shall be in an amount not
less than $5,000,000;
(ii) such Lender's obligations under this Agreement
(including, without limitation, its Commitment) shall remain unchanged;
(iii) such Lender shall remain solely responsible to
the other parties hereto for the performance of such obligations;
(iv) such Lender shall remain the holder of the Notes
held by it for all purposes of this Agreement;
(v) the Borrowers, the Agent and the other Lenders
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement;
(vi) such Lender shall not permit such participant
the right to approve any waivers, amendments or other modifications to this
Agreement or any other Loan Document other than waivers, amendments or
modifications which would reduce the principal of or the interest rate on any
Loan, extend the term or increase the amount of the Commitment, reduce the
amount of any fees to which such participant is entitled, extend any scheduled
payment date for principal of any Loan or, except as expressly contemplated
hereby or thereby, release substantially all of the collateral securing the
Loans at any time; and
(vii) any such disposition shall not, without the
consent of Longhorn, require any Borrower to file a registration statement with
the Securities and Exchange Commission to apply to qualify the Loans or the
Notes under the blue sky law of any state.
76
83
(g) Disclosure of Information; Confidentiality. The Agent and
the Lenders shall hold all non-public information with respect to Longhorn or
any of its Subsidiaries or Affiliates obtained pursuant to the Loan Documents in
accordance with their customary procedures for handling confidential
information. Any Lender may, in connection with any assignment, proposed
assignment, participation or proposed participation pursuant to this Section
12.10, disclose to the assignee, participant, proposed assignee or proposed
participant, any information relating to Longhorn or any of its Subsidiaries or
Affiliates furnished to such Lender by or on behalf of Longhorn or any of its
Subsidiaries or Affiliates; provided, that prior to any such disclosure, each
such assignee, proposed assignee, participant or proposed participant shall
agree in writing with the Borrowers or such Lender to preserve the
confidentiality of any confidential information relating to Longhorn and any of
its Subsidiaries and Affiliates received from such Lender.
(h) Certain Pledges or Assignments. Nothing herein shall
prohibit any Lender from pledging or assigning any Note to any Federal Reserve
Bank in accordance with Applicable Law.
SECTION 12.11 Amendments, Waivers and Consents. Except as set forth
below, any term, covenant, agreement or condition of this Agreement or any of
the other Loan Documents may be amended or waived by the Lenders, and any
consent given by the Lenders, if, but only if, such amendment, waiver or
consent is in writing signed by the Required Lenders (or by the Agent with the
consent of the Required Lenders) and delivered to the Agent and, in the case of
an amendment, signed by Longhorn, on behalf of itself and the Borrowers;
provided, that no amendment, waiver or consent shall (a) increase the amount or
extend the time of the obligation of the Lenders to make Loans (including
without limitation pursuant to Section 2.6), (b) extend the originally
scheduled time or times of payment of the principal of any Loan or the time or
times of payment of interest on any Loan, (c) reduce the rate of interest or
fees payable on any Loan, (d) permit any subordination of the principal or
interest on any Loan, (e) waive or amend the provisions of Section 8.1 or (f)
amend the provisions of this Section 12.11 or the definition of Required
Lenders, without the prior written consent of each Lender. In addition, no
amendment, waiver or consent to the provisions of Article XI shall be made
without the written consent of the Agent.
SECTION 12.12 Performance of Duties. The Borrowers' obligations under
this Agreement and each of the Loan Documents shall be performed by the
Borrowers at their sole cost and expense.
77
84
SECTION 12.13 All Powers Coupled with Interest. All powers of attorney
and other authorizations granted to the Lenders, the Agent and any Persons
designated by the Agent or any Lender pursuant to any provisions of this
Agreement or any of the other Loan Documents shall be deemed coupled with an
interest and shall be irrevocable so long as any of the Obligations remain
unpaid or unsatisfied or the Credit Facility has not been terminated.
SECTION 12.14 Survival of Indemnities. Notwithstanding any
termination of this Agreement, the indemnities to which the Agent and the
Lenders are entitled under the provisions of this Article XII and any other
provision of this Agreement and the Loan Documents shall continue in full force
and effect and shall protect the Agent and the Lenders against events arising
after such termination as well as before.
SECTION 12.15 Titles and Captions. Titles and captions of Articles,
Sections and subsections in this Agreement are for convenience only, and
neither limit nor amplify the provisions of this Agreement.
SECTION 12.16 Severability of Provisions. Any provision of this
Agreement or any other Loan Document which is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective only to the
extent of such prohibition or unenforceability without invalidating the
remainder of such provision or the remaining provisions hereof or thereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
SECTION 12.17 Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and shall be binding upon all parties, their successors and assigns, and all of
which taken together shall constitute one and the same agreement.
SECTION 12.18 Longhorn as Agent for Borrowers. Each Borrower hereby
irrevocably appoints and authorizes Longhorn (a) to provide the Agent with all
notices with respect to Loans obtained for the benefit of any Borrower and all
other notices and instructions under this Agreement and (b) to take such action
on behalf of the Borrowers as Longhorn deems appropriate on its behalf to
obtain Loans and to exercise such other powers as are reasonably incidental
thereto to carry out the purposes of this Agreement.
SECTION 12.19 Term of Agreement. This Agreement shall remain in effect
from the Closing Date through and including the date upon which all Obligations
shall have been indefeasibly and
78
85
irrevocably paid and satisfied in full. No termination of this Agreement shall
affect the rights and obligations of the parties hereto arising prior to such
termination.
79
86
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers, all as of the day and year first
written above.
[CORPORATE SEAL] LONGHORN STEAKS, INC.
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
[CORPORATE SEAL] BUGABOO CREEK STEAK HOUSE, INC.
ATTEST:
By: By:
--------------------- -----------------------------
Name: Name:
------------------- ---------------------------
Title: Title:
------------------ --------------------------
[SIGATURES CONTINUE ON FOLLOWING PAGE]
80
87
FIRST UNION NATIONAL BANK OF
GEORGIA, as Agent and Lender
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
FLEET NATIONAL BANK, as Lender
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
AMSOUTH BANK OF ALABAMA, as Lender
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
81
88
SCHEDULE 1: LENDERS AND COMMITMENTS
COMMITMENT
AND COMMITMENT
LENDER PERCENTAGE
------ ----------
First Union National Bank $30,000,000
of Georgia 50%
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Portfolio Management
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Fleet National Bank $20,000,000
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 33.33%
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Vice President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
AmSouth Bank of Alabama $10,000,000
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ 66.66%
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇
Vice President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇