EXHIBIT 10.4
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CREDIT AGREEMENT
dated as of November 4, 2003,
by and among
O'CHARLEY'S INC.,
as Borrower,
the Lenders referred to herein,
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Administrative Agent,
BANK OF AMERICA, N.A. AND COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK B.A. "RABOBANK INTERNATIONAL", NEW YORK BRANCH
as Co-Syndication Agents, and
AMSOUTH BANK AND SUNTRUST BANK,
as Co-Documentation Agents
WACHOVIA CAPITAL MARKETS, LLC,
d/b/a WACHOVIA SECURITIES
as Sole Lead Arranger and Sole Book Manager
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TABLE OF CONTENTS
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ARTICLE I DEFINITIONS.........................................................................................1
SECTION 1.1 Definitions......................................................................1
SECTION 1.2 General.........................................................................19
SECTION 1.3 Other Definitions and Provisions................................................19
ARTICLE II REVOLVING CREDIT FACILITY..........................................................................19
SECTION 2.1 Revolving Credit Loans..........................................................19
SECTION 2.2 Swingline Loans.................................................................20
SECTION 2.3 Procedure for Advances of Revolving Credit Loans................................22
SECTION 2.4 Repayment of Loans..............................................................22
SECTION 2.5 Notes...........................................................................23
SECTION 2.6 Permanent Reduction of the Revolving Credit Commitment..........................24
SECTION 2.7 Termination of Revolving Credit Facility........................................24
SECTION 2.8 Increase of Revolving Credit Commitment.........................................24
ARTICLE III LETTER OF CREDIT FACILITY..........................................................................26
SECTION 3.1 L/C Commitment..................................................................26
SECTION 3.2 Procedure for Issuance of Letters of Credit.....................................26
SECTION 3.3 Commissions and Other Charges...................................................27
SECTION 3.4 L/C Participations..............................................................27
SECTION 3.5 Reimbursement Obligation of the Borrower........................................28
SECTION 3.6 Obligations Absolute............................................................29
SECTION 3.7 Effect of Application...........................................................29
ARTICLE IV [Intentionally Omitted]............................................................................29
ARTICLE V GENERAL LOAN PROVISIONS............................................................................29
SECTION 5.1 Interest........................................................................29
SECTION 5.2 Notice and Manner of Conversion or Continuation of Loans........................32
SECTION 5.3 Fees............................................................................33
SECTION 5.4 Manner of Payment...............................................................34
SECTION 5.5 Crediting of Payments and Proceeds..............................................34
SECTION 5.6 Adjustments.....................................................................35
SECTION 5.7 Nature of Obligations of Lenders Regarding Extensions of Credit; Assumption by
the Administrative Agent........................................................35
SECTION 5.8 Changed Circumstances...........................................................36
SECTION 5.9 Indemnity.......................................................................38
SECTION 5.10 Capital Requirements............................................................38
SECTION 5.11 Taxes...........................................................................38
SECTION 5.12 Security........................................................................40
SECTION 5.13 Replacement of Lenders..........................................................40
ARTICLE VI CLOSING; CONDITIONS OF CLOSING AND BORROWING.......................................................41
SECTION 6.1 Closing.........................................................................41
SECTION 6.2 Conditions to Closing and Initial Extensions of Credit..........................41
SECTION 6.3 Conditions to All Extensions of Credit..........................................46
ARTICLE VII REPRESENTATIONS AND WARRANTIES OF THE BORROWER.....................................................46
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SECTION 7.1 Representations and Warranties..................................................46
SECTION 7.2 Survival of Representations and Warranties, Etc.................................54
ARTICLE VIII FINANCIAL INFORMATION AND NOTICES.................................................................54
SECTION 8.1 Financial Statements and Projections............................................54
SECTION 8.2 Officer's Compliance Certificate................................................55
SECTION 8.3 Accountants' Certificate........................................................55
SECTION 8.4 Other Reports...................................................................56
SECTION 8.5 Notice of Litigation and Other Matters..........................................56
SECTION 8.6 Accuracy of Information.........................................................57
ARTICLE IX AFFIRMATIVE COVENANTS.............................................................................57
SECTION 9.1 Preservation of Corporate Existence and Related Matters.........................58
SECTION 9.2 Maintenance of Property.........................................................58
SECTION 9.3 Insurance.......................................................................58
SECTION 9.4 Accounting Methods and Financial Records........................................58
SECTION 9.5 Payment and Performance of Obligations..........................................58
SECTION 9.6 Compliance with Laws and Approvals..............................................58
SECTION 9.7 Environmental Laws..............................................................59
SECTION 9.8 Compliance with ERISA...........................................................59
SECTION 9.9 Compliance with Agreements......................................................59
SECTION 9.10 Visits and Inspections..........................................................59
SECTION 9.11 Additional Subsidiaries; Equipment; Real Property Acquisitions..................60
SECTION 9.12 Use of Proceeds.................................................................61
SECTION 9.13 Conduct of Business.............................................................61
SECTION 9.14 Further Assurances..............................................................61
SECTION 9.15 Landlord Consents...............................................................61
ARTICLE X FINANCIAL COVENANTS...............................................................................61
SECTION 10.1 Maximum Adjusted Debt to EBITDAR Ratio..........................................62
SECTION 10.2 Maximum Senior Secured Leverage Ratio...........................................62
SECTION 10.3 Minimum Fixed Charge Coverage Ratio.............................................62
SECTION 10.4 Minimum Asset Coverage Ratio....................................................62
SECTION 10.5 Minimum Capital Expenditures Ratio..............................................62
ARTICLE XI NEGATIVE COVENANTS................................................................................63
SECTION 11.1 Limitations on Debt..............................................................63
SECTION 11.2 Limitations on Liens.............................................................64
SECTION 11.3 Limitations on Loans, Advances, Investments and Acquisitions.....................65
SECTION 11.4 Limitations on Mergers and Liquidation...........................................66
SECTION 11.5 Limitations on Sale of Assets....................................................67
SECTION 11.6 Limitations on Dividends and Distributions.......................................68
SECTION 11.7 Limitations on Exchange and Issuance of Ownership Interests......................69
SECTION 11.8 Transactions with Affiliates.....................................................69
SECTION 11.9 Certain Accounting Changes; Organizational Documents.............................69
SECTION 11.10 Amendments; Payments and Prepayments of Subordinated Debt........................69
SECTION 11.11 Restrictive Agreements...........................................................69
SECTION 11.12 Nature of Business...............................................................70
SECTION 11.13 Impairment of Security Interests.................................................70
SECTION 11.14 SRLS Entities Restrictions.......................................................70
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SECTION 11.15 Franchisees Restrictions.........................................................70
ARTICLE XII DEFAULT AND REMEDIES..............................................................................70
SECTION 12.1 Events of Default................................................................70
SECTION 12.2 Remedies.........................................................................73
ARTICLE XIII THE ADMINISTRATIVE AGENT..........................................................................74
SECTION 13.1 Appointment......................................................................74
SECTION 13.2 Delegation of Duties.............................................................75
SECTION 13.3 Exculpatory Provisions...........................................................75
SECTION 13.4 Reliance by the Administrative Agent.............................................75
SECTION 13.5 Notice of Default................................................................76
SECTION 13.6 Non-Reliance on the Administrative Agent and Other Lenders.......................76
SECTION 13.7 Indemnification..................................................................77
SECTION 13.8 The Administrative Agent in Its Individual Capacity..............................77
SECTION 13.9 Resignation of the Administrative Agent; Successor Administrative Agent..........77
SECTION 13.10 Syndication and Documentation Agents.............................................78
ARTICLE XIV MISCELLANEOUS.....................................................................................78
SECTION 14.1 Notices..........................................................................78
SECTION 14.2 Expenses; Indemnity..............................................................79
SECTION 14.3 Set-off..........................................................................80
SECTION 14.4 Governing Law....................................................................80
SECTION 14.5 Jurisdiction and Venue...........................................................80
SECTION 14.6 Binding Arbitration; Waiver of Jury Trial........................................81
SECTION 14.7 Reversal of Payments.............................................................82
SECTION 14.8 Injunctive Relief; Punitive Damages..............................................82
SECTION 14.9 Accounting Matters...............................................................83
SECTION 14.10 Successors and Assigns; Participations...........................................83
SECTION 14.11 Amendments, Waivers and Consents.................................................88
SECTION 14.12 Performance of Duties............................................................89
SECTION 14.13 All Powers Coupled with Interest.................................................89
SECTION 14.14 Survival of Indemnities..........................................................89
SECTION 14.15 Titles and Captions..............................................................89
SECTION 14.16 Severability of Provisions.......................................................89
SECTION 14.17 Counterparts.....................................................................89
SECTION 14.18 Term of Agreement................................................................89
SECTION 14.19 Advice of Counsel................................................................90
SECTION 14.20 No Strict Construction...........................................................90
SECTION 14.21 Inconsistencies with Other Documents; Independent Effect of Covenants............90
SECTION 14.22 Reaffirmation of Security Documents and Loan Documents...........................90
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EXHIBITS
Exhibit A-1 - Form of Amended and Restated Revolving Credit Note
Exhibit A-2 - Form of Amended and Restated Swingline Note
Exhibit B - Form of Notice of Borrowing
Exhibit C - Form of Notice of Account Designation
Exhibit D - Form of Notice of Prepayment
Exhibit E - Form of Notice of Conversion/Continuation
Exhibit F - Form of Officer's Compliance Certificate
Exhibit G - Form of Assignment and Acceptance
SCHEDULES
Schedule 7.1(a) - Jurisdictions of Organization and Qualification
Schedule 7.1(b) - Subsidiaries and Capitalization
Schedule 7.1(h) - Environmental Matters
Schedule 7.1(i) - ERISA Plans
Schedule 7.1(l) - Material Contracts
Schedule 7.1(m) - Labor and Collective Bargaining Agreements
Schedule 7.1(r) - Real Property
Schedule 7.1(t) - Debt and Guaranty Obligations
Schedule 7.1(u) - Litigation
Schedule 11.2 - Existing Liens
Schedule 11.3 - Existing Loans, Advances and Investments
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EXECUTION COPY
AMENDED AND RESTATED CREDIT AGREEMENT, dated as of the 4th day of
November, 2003, by and among O'CHARLEY'S INC., a Tennessee corporation, as
Borrower, the lenders who are or may become a party to this Agreement, as
Lenders, WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking association, as
Administrative Agent for the Lenders, BANK OF AMERICA, N.A. AND COOPERATIEVE
CENTRALE RAIFFEISEN-BOERENLEENBANK B.A. "RABOBANK INTERNATIONAL", NEW YORK
BRANCH, as Co-Syndication Agents, and AMSOUTH BANK AND SUNTRUST BANK, as
Co-Documentation Agents.
STATEMENT OF PURPOSE
Pursuant to the Credit Agreement dated as of January 27, 2003 (as
amended, restated, supplemented or otherwise modified prior to the date hereof,
the "Existing Credit Agreement"), by and among the Borrower, the lenders party
thereto (the "Existing Lenders") and Wachovia Bank, National Association, as
administrative agent, the Existing Lenders extended certain credit facilities to
the Borrower pursuant to the terms thereof.
The Borrower has requested, and, subject to the terms and conditions
hereof, the Lenders have agreed to amend and restate the Existing Credit
Agreement on the terms and conditions of this Agreement.
It is the intent of the parties hereto that this Agreement not
constitute a novation of the obligations and liabilities of the parties under
the Existing Credit Agreement or be deemed to be evidence or constitute
repayment of all or any portion of such obligations and liabilities, but that
this Agreement amend and restate in its entirety the Existing Credit Agreement
and re-evidence the obligations and liabilities of the Borrower and the other
credit parties outstanding thereunder.
It is also the intent of the Borrower and Subsidiary Guarantors (as
defined below) to confirm that all obligations under the loan documents referred
to in the Existing Credit Agreement shall continue in full force and effect as
modified by the Loan Documents referred to herein and that, from and after the
Closing Date, all references to the "Credit Agreement" contained in any such
existing loan documents shall be deemed to refer to this Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, the parties
hereby agree that the Existing Credit Agreement is hereby amended and restated
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:
"Acquisition" means the acquisition by the Borrower, or one or more
Subsidiary Guarantors, of the assets of 99 Boston Inc., 99 Boston of Vermont,
Inc. and Doe Family II, LLC pursuant to the terms of the Asset Purchase
Agreement, dated October 28, 2002, by and among the Borrower, as Buyer, 99
Boston, Inc., 99 Boston of Vermont, Inc., Doe Family II, LLC, ▇▇▇▇▇▇▇ ▇. ▇▇▇,
III, ▇▇▇▇ ▇. ▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇, ▇▇., as Sellers and the acquisition by the
Borrower or one or more Subsidiary Guarantors of the stock of 99 West, Inc.
pursuant to the terms of the Merger Agreement dated October 28, 2002, by and
among the Borrower, Volunteer Acquisition Corporation, 99 West, Inc., ▇▇▇▇▇▇▇ ▇.
▇▇▇, III, ▇▇▇▇ ▇. ▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇, ▇▇.
"Adjusted Debt" means, as of any date of calculation, the sum of the
following determined on a Consolidated basis, without duplication, for the
Borrower and its Subsidiaries in accordance with GAAP: (a) Debt as of such date,
plus (b) the product of (i) Rental Expense for the four (4) consecutive Fiscal
Quarter period ending on or immediately prior to such date, multiplied by (ii)
8.0; provided, however, that for purposes of calculating compliance with Section
10.1, Rental Expense for the four (4) consecutive Fiscal Quarter period ending
on such date shall be increased to include rental expense associated with any
sale-leaseback transaction permitted hereunder on a pro forma basis.
"Adjusted Debt to EBITDAR Ratio" shall mean the ratio set forth in
Section 10.1.
"Administrative Agent" means Wachovia in its capacity as Administrative
Agent hereunder, and any successor thereto appointed pursuant to Section 13.9.
"Administrative Agent's Office" means the office of the Administrative
Agent specified in or determined in accordance with the provisions of Section
14.1(c).
"Affiliate" means, with respect to any Person, any other Person (other
than a Subsidiary of the Borrower) 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.
"Agreement" means this Credit Agreement, as amended, restated,
supplemented or otherwise modified from time to time.
"Aggregate Commitment" means the aggregate amount of the Lenders'
Commitments hereunder, as such amount may be reduced or otherwise modified at
any time or from time to time pursuant to the terms hereof. On the Closing Date,
the Aggregate Commitment shall be One Hundred Twenty-Five Million Dollars
($125,000,000).
"Aggregate Permitted Note Repurchases Amount" means $25,000,000;
provided, however, that the Aggregate Permitted Note Repurchases Amount shall be
reduced "dollar for
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dollar" for every dollar less than $125,000,000 received by the Borrower in
gross proceeds from the issuance of the Senior Subordinated Notes.
"Applicable Law" means all applicable provisions of constitutions,
laws, statutes, ordinances, rules, treaties, regulations, permits, licenses,
approvals, interpretations and orders of courts or Governmental Authorities and
all orders and decrees of all courts and arbitrators.
"Applicable Margin" shall have the meaning assigned thereto in Section
5.1(c).
"Application" means an application, in the form specified by the
Issuing Lender from time to time, requesting the Issuing Lender to issue a
Letter of Credit.
"Approved Fund" means any Person (other than a natural Person),
including, without limitation, any special purpose entity, that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business;
provided, that such Approved Fund must be administered by (a) a Lender, (b) an
Affiliate of a Lender or (c) an entity or an Affiliate of an entity that
administers or manages a Lender.
"Arbitration Rules" shall have the meaning assigned thereto in Section
14.6(a).
"Asset Coverage Ratio" means, as of any Fiscal Quarter end, the ratio
of (a) the Consolidated gross book value of the Borrower's and its Subsidiaries'
land and all improvements thereto (other than buildings), accounts receivables,
inventory and cash on such date and determined in accordance with GAAP to (b)
the aggregate amount of all outstanding Extensions of Credit under this Credit
Facility on each such date.
"Assignment and Acceptance" shall have the meaning assigned thereto in
Section 14.10.
"Base Rate" means, at any time, the higher of (a) the Prime Rate and
(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 5.1(a).
"Benefited Lender" shall have the meaning assigned thereto in Section
5.6.
"Borrower" means O'Charley's Inc., a Tennessee corporation, in its
capacity as borrower hereunder.
"Build-to-Suit Sale-Leaseback Transaction" means, in respect of any
real property acquired and improved by the Borrower or any of its Subsidiary
Guarantors after the Closing Date solely in connection with new store openings,
any transaction occurring after the Closing Date whereby such real property is
sold by and leased back to the Borrower or such Subsidiary Guarantors within a
period ending not later than the date that is the earlier of (i) two years after
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the date such real property was acquired and (ii) 270 days after the date that
construction work to improve such real property commenced.
"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.
"Calculation Date" shall have the meaning assigned thereto in Section
5.1(c).
"Capital Asset" means, with respect to the Borrower 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 the Borrower
and its Subsidiaries.
"Capital Expenditures" means with respect to the Borrower and its
Subsidiaries for any period, the aggregate cost of all Capital Assets acquired
by the Borrower and its Subsidiaries during such period, as determined in
accordance with GAAP.
"Capital Lease" means any lease of any property by the Borrower or any
of its Subsidiaries, as lessee, that should, in accordance with GAAP, be
classified and accounted for as a capital lease on a Consolidated balance sheet
of the Borrower and its Subsidiaries.
"Cash Equivalents" shall have the meaning assigned thereto in Section
11.3(b).
"Cash Management Program" means the cash management program of the
Swingline Lender and any other cash management or other arrangement which the
Borrower and the Swingline Lender agree should be included in the borrowing and
repayment of Swingline Loans pursuant to Section 2.2.
"Change in Control" shall have the meaning assigned thereto in Section
12.1(i).
"Closing Date" means the date of this Agreement or such later Business
Day upon which each condition described in Section 6.2 shall be satisfied or
waived in all respects in a manner acceptable to the Administrative Agent, in
its sole discretion.
"Co-Documentation Agents" means, collectively, AmSouth Bank and
Suntrust Bank.
"Co-Syndication Agents" means, collectively, Bank of America, N.A. and
Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A. "Rabobank International",
New York Branch.
"Code" means the Internal Revenue Code of 1986, and the rules and
regulations thereunder, each as amended or modified from time to time.
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"Collateral" means the collateral security for the Obligations pledged
or granted pursuant to the Security Documents.
"Collateral Agreement" means the Amended and Restated Collateral
Agreement dated as of the date hereof executed by the Borrower and the
Subsidiary Guarantors in favor of the Administrative Agent for the ratable
benefit of itself and the Lenders, as amended, restated, supplemented or
otherwise modified from time to time
"Collateral Assignment Agreement" means the Collateral Assignment
Agreement dated as of January 27, 2003 executed by the Borrower or any of its
Subsidiaries, as applicable, in favor of the Administrative Agent for the
ratable benefit of itself and the Lenders, as reaffirmed pursuant to the
Reaffirmation Agreement and as otherwise amended, restated or supplemented from
time to time.
"Commitment" means, as to any Lender, the obligation of such Lender to
make Loans to and issue or participate in Letters of Credit issued for the
account of the Borrower hereunder in an aggregate principal or face amount at
any time outstanding not to exceed the amount set forth opposite such Lender's
name in the Register, as the same may be reduced or otherwise modified at any
time or from time to time pursuant to the terms hereof.
"Commitment Fee Rate" shall have the meaning assigned thereto in
Section 5.3(a).
"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
Commitments of all of the Lenders.
"Consolidated" means, when used with reference to financial statements
or financial statement items of the Borrower and its Subsidiaries, such
statements or items on a consolidated basis in accordance with applicable
principles of consolidation under GAAP.
"Credit Facility" means, collectively, the Revolving Credit Facility
and the L/C Facility.
"Debt" means, with respect to the Borrower and its Subsidiaries at any
date and without duplication, the sum 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 ninety
(90) days past due, (c) all obligations of any such Person as lessee under
Capital Leases, (d) all Debt of any other Person secured by a Lien on any asset
of any such Person, (e) all Guaranty Obligations of any such Person, (f) all
obligations, contingent or otherwise, of any such Person relative to the face
amount of letters of credit, whether or not drawn, including, without
limitation, any Reimbursement Obligation, and banker's acceptances issued for
the account of any such Person, (g) all obligations of any such Person to
redeem, repurchase, exchange, defease or otherwise make payments in respect of
capital stock or other securities or partnership interests of such Person, (h)
all net payment obligations incurred by any such
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Person pursuant to Hedging Agreements, and (i) all outstanding payment
obligations with respect to Synthetic Leases.
"Default" means any of the events specified in Section 12.1 which with
the passage of time, the giving of notice or any other condition, would
constitute an Event of Default.
"Disputes" shall have the meaning set forth in Section 14.6.
"Dollars" or "$" means, unless otherwise qualified, dollars in lawful
currency of the United States.
"Domestic Subsidiary" means any Subsidiary that is organized under the
laws of any political subdivision of the United States.
"EBITDA" means, for any period, the sum of the following determined on
a Consolidated basis, without duplication, for the Borrower and its Subsidiaries
in accordance with GAAP: (a) Net Income for such period plus (b) the sum of the
following to the extent deducted in determining Net Income: (i) Tax Expense,
(ii) Interest Expense, and (iii) amortization, depreciation and other non-cash
charges, less (c) interest income and any extraordinary gains, plus (d)
extraordinary losses in amounts reasonably acceptable to the Administrative
Agent; provided, that following the closing of the Acquisition, EBITDA for the
four (4) consecutive Fiscal Quarter period ending on such date shall be
increased to reflect the aggregate historical EBITDA attributable to 99 Boston
Inc., ▇▇ ▇▇▇▇ ▇▇▇., ▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, Inc. and Doe Family II, LLC giving pro
forma effect to the Acquisition.
"EBITDAR" means, for any period, the sum of the following determined on
a Consolidated basis, without duplication, for the Borrower and its Subsidiaries
in accordance with GAAP: (a) EBITDA for such period, plus (b) Rental Expense for
such period.
"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 commercial bank organized under the laws of any
other country that is a member of the Organization of Economic Cooperation and
Development, or a political subdivision of any such country, having combined
capital and surplus in excess of $500,000,000, (c) 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, (d) already a Lender hereunder (whether as an original
party to this Agreement or as the assignee of another Lender), (e) the successor
(whether by transfer of assets, merger or otherwise) to all or substantially all
of the commercial lending business of the assigning Lender, (f) any Affiliate of
assigning Lender or (g) any Approved Fund or (h) any other Person that has been
approved in writing as an Eligible Assignee by the Borrower (other than upon the
occurrence and during the continuance of any Default or Event of Default) and
the Administrative Agent.
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"Employee Benefit Plan" means any employee benefit plan within the
meaning of Section 3(3) of ERISA which (a) is maintained for employees of the
Borrower or any ERISA Affiliate or (b) has at any time within the preceding six
(6) years been maintained for the employees of the Borrower or any current or
former ERISA Affiliate.
"Environmental Claims" means any and all administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, liens, notices of
noncompliance or violation, investigations (other than internal reports prepared
by any Person in the ordinary course of business and not in response to any
third party action or request of any kind) or proceedings relating in any way to
any actual or alleged violation of or liability under any Environmental Law or
relating to any permit issued, or any approval given, under any such
Environmental Law, including, without limitation, any and all claims by
Governmental Authorities for enforcement, cleanup, removal, response, remedial
or other actions or damages, contribution, indemnification cost recovery,
compensation or injunctive relief resulting from Hazardous Materials or arising
from alleged injury or threat of injury to human health or the environment.
"Environmental Laws" means any and all federal, foreign, state,
provincial and local laws, statutes, ordinances, rules, regulations, permits,
licenses, approvals, legally binding interpretations and orders of courts or
Governmental Authorities, relating to the protection of human health or the
environment, including, but not limited to, requirements pertaining to the
manufacture, processing, distribution, 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.
"ERISA Affiliate" means any Person who together with the Borrower is
treated as a single employer within the meaning of Section 414(b), (c), (m) or
(o) of the Code or Section 4001(b) of ERISA.
"Eurodollar Reserve Percentage" means, for any day, 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 maximum reserve requirement
(including, without limitation, any basic, supplemental or emergency reserves)
in respect of eurocurrency liabilities or any similar category of liabilities
for a member bank of the Federal Reserve System in New York City.
"Event of Default" means any of the events specified in Section 12.1,
provided that any requirement for passage of time, giving of notice, or any
other condition, has been satisfied.
"Existing Credit Agreement" shall have the meaning given thereto in the
Statement of Purpose herein.
"Existing Lenders" shall have the meaning assigned thereto in the
Statement of Purpose herein.
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"Existing Letters of Credit" means, collectively, (i) the standby
letter of credit dated September 10, 1999, issued by Fleet Bank in the face
amount of $517,000, for the benefit of The Traveler's Indemnity Company and (ii)
the standby letter of credit dated January 8, 1998, issued by Fleet Bank in the
face amount of $1,821,000, for the benefit of National Union Fire Insurance
Company of Pittsburgh, PA.
"Existing Loans" shall have the meaning assigned thereto in Section
6.2(c).
"Expansion Capital Expenditures" means Capital Expenditures of the
Borrower and its Subsidiaries associated solely with new store openings.
"Extensions of Credit" means, as to any Lender at any time, (a) an
amount equal to the sum of (i) the aggregate principal amount of all Revolving
Credit Loans made by such Lender then outstanding, (ii) such Lender's Revolving
Credit Commitment Percentage of the L/C Obligations then outstanding, and (iii)
such Lender's Revolving Credit Commitment Percentage of the Swingline Loans then
outstanding, or (b) the making of any Loan or participation in any Letter of
Credit by such Lender, as the context requires.
"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 Administrative Agent and confirmed in
Federal Reserve Board Statistical Release H.15 (519) or any successor or
substitute publication selected by the Administrative 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 Administrative 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 immediately preceding Business Day.
"Fiscal Quarter" means each fiscal quarter of the Borrower and its
Subsidiaries ending on the Sunday that is sixteen (16), twenty-eight (28), forty
(40) and fifty-two (52) weeks from the first day of the Borrower's Fiscal Year.
"Fiscal Year" means the fiscal year of the Borrower and its
Subsidiaries ending on the last Sunday of December.
"Foreign Subsidiary" means any Subsidiary of the Borrower that is not a
Domestic Subsidiary.
"Franchisee" means, any Person with whom the Borrower or any of its
Subsidiaries has entered into a franchise agreement or similar arrangement for
the purpose of developing and operating restaurants.
"GAAP" means generally accepted accounting principles, as recognized by
the American Institute of Certified Public Accountants and the Financial
Accounting Standards Board, consistently applied and maintained on a consistent
basis for the Borrower and its Subsidiaries
8
throughout the period indicated and (subject to Section 14.9) consistent with
the prior financial practice of the Borrower 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.
"Guaranty Obligation" means, with respect to the Borrower 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 or other obligation 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 or other obligation
(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 or other
obligation of the payment thereof or to protect such obligee against loss in
respect thereof (in whole or in part); provided, that the term Guaranty
Obligation shall not include endorsements for collection or deposit in the
ordinary course of business.
"Hazardous Materials" means any substances or materials (a) which are
or become defined as hazardous wastes, hazardous substances, pollutants,
contaminants, 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 or common 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 deemed to
constitute a nuisance or a trespass which pose a health or safety hazard to
Persons or neighboring properties, (f)which consist of underground or
aboveground storage tanks, whether empty, filled or partially filled with any
substance, or (g)which contain, without limitation, 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 any Interest
Rate Contract, forward rate agreement, commodity swap, forward foreign exchange
agreement, currency swap agreement, cross-currency rate swap agreement, currency
option agreement or other agreement or arrangement designed to alter the risks
of any Person arising from fluctuations in interest rates, currency values or
commodity prices, all as amended, restated, supplemented or otherwise modified
from time to time.
9
"Hedging Obligations" shall have the meaning assigned thereto in the
definition of "Obligations."
"Intercreditor and Subordination Agreement" means the intercreditor and
subordination agreement dated as of January 27, 2003 between the Administrative
Agent and O'Charley's Finance Company, Inc, as amended, restated, supplemented
or otherwise modified from time to time.
"Interest Expense" means, with respect to the Borrower and its
Subsidiaries for any period, the gross interest expense (including, without
limitation, interest expense attributable to Capital Leases and all net payment
obligations pursuant to Hedging Agreements), all determined for such period on a
Consolidated basis, without duplication, in accordance with GAAP.
"Interest Period" shall have the meaning assigned thereto in Section
5.1(b).
"Interest Rate Contract" means any interest rate swap agreement,
interest rate cap agreement, interest rate floor agreement, interest rate collar
agreement, interest rate option or any other agreement regarding the hedging of
interest rate risk exposure executed in connection with hedging the interest
rate exposure of any Person and any confirming letter executed pursuant to such
agreement, all as amended, restated, supplemented or otherwise modified from
time to time.
"ISP98" means the International Standby Practices (1998 Revision,
effective January 1, 1999), International Chamber of Commerce Publication No.
590.
"Issuing Lender" means (a) Wachovia, in its capacity as issuer of any
Letter of Credit, or any successor thereto and (b) with respect to the Existing
Letters of Credit, the Lender issuing such Existing Letter of Credit.
"L/C Commitment" means the lesser of (a) Ten Million Dollars
($10,000,000) and (b) the Revolving Credit Commitment.
"L/C Facility" means the letter of credit facility established pursuant
to Article III.
"L/C Obligations" means at any time, an amount equal to the sum of (a)
the aggregate undrawn and unexpired amount of the then outstanding Letters of
Credit and (b) the aggregate amount of drawings under Letters of Credit which
have not then been reimbursed pursuant to Section 3.5.
"L/C Participant" means, with respect to the L/C Facility, each Person
executing this Agreement as a Lender under the Revolving Credit Facility (other
than the Issuing Lender).
"Lender" means each Person executing this Agreement as a Lender
(including, without limitation, the Issuing Lender, L/C Participants and the
Swingline Lender unless the context otherwise requires) set forth on the
signature pages hereto and each Person that hereafter becomes a party to this
Agreement as a Lender pursuant to Section 14.10.
10
"Lending Office" means, with respect to any Lender, the office of such
Lender maintaining such Lender's Revolving Credit Commitment Percentage of the
Extensions of Credit.
"Letters of Credit" means the collective reference to letters of credit
issued pursuant to Section 3.1 and the Existing Letters of Credit.
"LIBOR" means the rate of interest per annum determined on the basis of
the rate for deposits in Dollars in minimum amounts of at least $5,000,000 for a
period equal to the applicable Interest Period which appears on the Telerate
Page 3750 at approximately 11:00 a.m. (London time) two (2) Business Days prior
to the first day of the applicable Interest Period (rounded upward, if
necessary, to the nearest 1/100th of 1%). If, for any reason, such rate does not
appear on Telerate Page 3750, then "LIBOR" shall be determined by the
Administrative Agent to be the arithmetic average of the rate per annum at which
deposits in Dollars in minimum amounts of at least $5,000,000 would be offered
by first class banks in the London interbank market to the Administrative Agent
at approximately 11:00 a.m. (London time) two (2) Business Days prior to the
first day of the applicable Interest Period for a period equal to such Interest
Period. Each calculation by the Administrative Agent of LIBOR shall be
conclusive and binding for all purposes, absent manifest error.
"LIBOR Rate" means a rate per annum (rounded upwards, if necessary, to
the next higher 1/100th of 1%) determined by the Administrative Agent pursuant
to the following formula:
LIBOR Rate = LIBOR
----------------------------------
1.00-Eurodollar Reserve Percentage
"LIBOR Rate Loan" means any Loan bearing interest at a rate based upon
the LIBOR Rate as provided in Section 5.1(a).
"Lien" means, with respect to any asset, any mortgage, leasehold
mortgage, lien, pledge, charge, security interest, hypothecation 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.
"Loan Documents" means, collectively, this Agreement, the Notes, the
Applications, the Subsidiary Guaranty Agreement, the Collateral Agreement, the
Intercreditor and Subordination Agreement, the Security Documents, each joinder
agreement executed pursuant to Section 9.11 and each other document, instrument,
certificate and agreement executed and delivered by the Borrower or any
Subsidiary thereof in connection with this Agreement or otherwise referred to
herein or contemplated hereby (excluding any Hedging Agreement), all as may be
amended, restated, supplemented or otherwise modified from time to time.
"Loans" means the collective reference to the Revolving Credit Loans
and the Swingline Loans and "Loan" means any of such Loans.
11
"Maintenance Capital Expenditures" means, with respect to the Borrower
and its Subsidiaries, Capital Expenditures less Expansion Capital Expenditures.
"Material Adverse Effect" means, with respect to the Borrower or any of
its Subsidiaries, a material adverse effect on the properties, business,
operations or condition (financial or otherwise) of the Borrower and its
Subsidiaries, taken as a whole, or the ability of any such Person to perform its
obligations under any Loan Document or any Material Contract, in each case to
which it is a party.
"Material Contract" means (a) any contract or other agreement, written
or oral, of the Borrower or any of its Subsidiaries involving monetary liability
of or to any such Person in an amount in excess of $10,000,000 per annum, or
(b)any other contract or agreement, written or oral, of the Borrower or any of
its Subsidiaries the failure to comply with which could reasonably be expected
to have a Material Adverse Effect.
"Mortgages" means the collective reference to each deed of trust,
mortgage, or other real property security document, encumbering certain real
property now or hereafter owned by the Borrower or any Subsidiary, in each case
in form and content satisfactory to the Administrative Agent and executed by the
Borrower or any Subsidiary thereof in favor of the Administrative Agent for the
ratable benefit of itself and the Lenders, as each such document may be amended,
restated, or supplemented from time to time.
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA to which the Borrower or any ERISA Affiliate is making, or
is accruing an obligation to make, or has accrued an obligation to make
contributions within the preceding six (6) years.
"Net Cash Proceeds" means, as applicable, (a) with respect to any sale
or other disposition of assets, the gross cash proceeds received by the Borrower
or any of its Subsidiaries from such sale less the sum of (i) all income taxes
and other taxes assessed by a Governmental Authority as a result of such sale
and any other fees and expenses incurred in connection therewith and (ii) the
principal amount of, premium, if any, and interest on any Debt secured by a Lien
on the asset (or a portion thereof) sold, which Debt is required to be repaid in
connection with such sale, (b) with respect to any offering of equity securities
or issuance of Debt, the gross cash proceeds received by the Borrower or any of
its Subsidiaries therefrom less all legal, underwriting and other fees and
expenses incurred in connection therewith and (c) with respect to any payment
under an insurance policy or in connection with a condemnation proceeding, the
amount of cash proceeds received by the Borrower or its Subsidiaries from an
insurance company or Governmental Authority, as applicable, net of all expenses
of collection.
"Net Income" means, with respect to the Borrower and its Subsidiaries,
for any period of determination, the net income (or loss) for such period,
determined on a Consolidated basis in accordance with GAAP; provided that there
shall be excluded from Net Income (a) the net income (or loss) of any Person
(other than a Subsidiary which shall be subject to clause (c) below), in which
the Borrower or any of its Subsidiaries has a joint interest with a third party,
except to the extent such net income is actually paid to the Borrower or any of
its Subsidiaries by dividend or other distribution during such period (in an
amount not to exceed the Borrower's or
12
such Subsidiary's share of the equity income from such Person), (b) the net
income (or loss) of any Person accrued prior to the date it becomes a Subsidiary
of such Person or is merged into or consolidated with such Person or any of its
Subsidiaries or that Person's assets are acquired by such Person or any of its
Subsidiaries except to the extent included pursuant to the foregoing clause (a),
and (c) the net income (if positive) of any Subsidiary to the extent that the
declaration or payment of dividends or similar distributions by such Subsidiary
to the Borrower or any of its Subsidiaries of such net income (i) is not at the
time permitted by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute rule or governmental regulation
applicable to such Subsidiary or (ii) would be subject to any taxes payable on
such dividends or distributions.
"Notes" means the collective reference to the Revolving Credit Notes
and the Swingline Note, and "Note" means any of such Notes.
"Notice of Account Designation" shall have the meaning assigned thereto
in Section 2.3(b).
"Notice of Borrowing" shall have the meaning assigned thereto in
Section 2.2(b).
"Notice of Conversion/Continuation" shall have the meaning assigned
thereto in Section 5.2.
"Notice of Prepayment" shall have the meaning assigned thereto in
Section 2.4(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)
the L/C Obligations, (c) all existing or future payment and other obligations
owing by the Borrower under any Hedging Agreement (which such Hedging Agreement
is permitted hereunder) with any Person that is a Lender hereunder, or any
Affiliate of a Lender, at the time such Hedging Agreement is executed (all such
obligations with respect to any such Hedging Agreement, "Hedging Obligations")
and (d) all other fees and commissions (including attorneys' fees), charges,
indebtedness, loans, liabilities, financial accommodations, obligations,
covenants and duties owing by the Borrower or any of its Subsidiaries to the
Lenders or the Administrative Agent, in each case under or in respect of this
Agreement, any Note, any Letter of Credit or any of the other Loan Documents 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.
"Officer's Compliance Certificate" shall have the meaning assigned
thereto in Section 8.2.
"Operating Lease" shall mean, as to any Person as determined in
accordance with GAAP, any lease of property (whether real, personal or mixed) by
such Person as lessee which is not a Capital Lease.
"Other Taxes" shall have the meaning assigned thereto in Section
5.11(b).
13
"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 the employees of the
Borrower or any ERISA Affiliates or (b) has at any time within the preceding six
(6) years been maintained for the employees of the Borrower or any of its
current or former ERISA Affiliates.
"Permitted Acquisition" shall have the meaning assigned thereto in
Section 11.3(c).
"Permitted Lien" means any Lien permitted pursuant to Section 11.2
hereof.
"Permitted Note Repurchases" means the repurchase by the Borrower of
the Senior Subordinated Notes on the open market in an aggregate amount not to
exceed the Aggregate Permitted Note Repurchases Amount during the term of the
Credit Facility; provided that immediately prior to and after giving effect to
any such repurchase, (i) no Default or Event of Default has occurred and is
continuing, and (ii) the Borrower shall have demonstrated to the Administrative
Agent pro forma compliance with each covenant contained in, and in the manner
set forth in, Article X prior to the consummation of such repurchase (which
shall be evidenced by an Officer's Compliance Certificate, in form and substance
reasonably satisfactory to the Administrative Agent, delivered to the
Administrative Agent prior to such repurchase by the Borrower).
"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 Wachovia 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 such prime rate occurs. The parties hereto acknowledge that the
rate announced publicly by Wachovia 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.
"Pro Rata Share" means, with respect to each Lender at any time, a
fraction (expressed as a percentage, carried out to the ninth decimal place),
the numerator of which is the amount of the Commitment of such Lender at such
time and the denominator of which is the amount of the Aggregate Commitments at
such time. The initial Pro Rata Share of each Lender is set forth opposite the
name of such Lender on the Register or in the Assignment and Assumption pursuant
to which such Lender becomes a party hereto, as applicable.
"Ratings Downgrade" means, a downgrade of the rating of the Credit
Facility to (i) a rating less than BB- by Standard and Poor's and (ii) a rating
less than Ba3 by ▇▇▇▇▇'▇ Investors Service, Inc.
14
"Reaffirmation Agreement" means the Reaffirmation Agreement, of even
date herewith, among the Borrower, certain Subsidiaries of the Borrower and the
Administrative Agent (for the ratable benefit of itself and the Lenders), as
amended, restated, supplemented or otherwise modified from time to time.
"Register" shall have the meaning assigned thereto in Section 14.10(d).
"Reimbursement Obligation" means the obligation of the Borrower to
reimburse the Issuing Lender pursuant to Section 3.5 for amounts drawn under
Letters of Credit.
"Rental Expense" means, with respect to the Borrower and its
Subsidiaries for any period, all rental expenses paid in cash with respect to
long-term real property leases and operations leases of the Borrower and its
Subsidiaries for such period, determined on a Consolidated basis in accordance
with GAAP; provided, that following the closing of the Acquisition, Rental
Expense for the four (4) consecutive Fiscal Quarter period ending on such date
shall be increased to reflect the aggregate historical Rental Expense
attributable to 99 Boston Inc., ▇▇ ▇▇▇▇ ▇▇▇., ▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, Inc. and Doe
Family II, LLC giving pro forma effect to the Acquisition.
"Required Lenders" means, at any date, any combination of Lenders
holding more than fifty percent (50%) of the Revolving Credit Commitments (or
the Revolving Credit Loans if such Commitments have been terminated).
"Responsible Officer" means any of the following: the chief executive
officer, president, vice-president, chief financial officer or secretary of the
Borrower or applicable Subsidiary Guarantor or any other officer of the Borrower
or applicable Subsidiary Guarantor reasonably acceptable to the Administrative
Agent.
"Revolving Credit Commitment" means (a) as to any Lender, the
obligation of such Lender to make Revolving Credit Loans to the account of the
Borrower hereunder in an aggregate principal amount at any time outstanding not
to exceed the amount set forth opposite such Lender's name on the Register as
such amount may be reduced or modified at any time or from time to time pursuant
to the terms hereof and (b) as to all Lenders, the aggregate commitment of all
Lenders to make Revolving Credit Loans, as such amount may be reduced or
modified at any time or from time to time pursuant to the terms hereof. The
Revolving Credit Commitment of all Lenders on the Closing Date shall be One
Hundred Twenty-Five Million Dollars $125,000,000.
"Revolving Credit Commitment Percentage" means, as to any Lender at any
time, the ratio of (a) the amount of the Revolving Credit Commitment of such
Lender to (b) the Revolving Credit Commitments of all Lenders.
"Revolving Credit Facility" means the revolving credit facility
established pursuant to Article II.
15
"Revolving Credit Loan" means any revolving loan made to the Borrower
pursuant to Section 2.1, and all such revolving loans collectively as the
context requires.
"Revolving Credit Maturity Date" means the earliest of the dates
referred to in Section 2.7.
"Revolving Credit Notes" means the collective reference to the Amended
and Restated Revolving Credit Notes made by the Borrower payable to the order of
each Lender holding a Revolving Credit Commitment , substantially in the form of
Exhibit A-1 hereto, evidencing the Revolving Credit Facility, and any
amendments, supplements and modifications thereto, any substitutes therefor, and
any replacements, restatements, renewals or extensions thereof, in whole or in
part.
"Sale-Leaseback Facility" shall have the meaning assigned thereto in
Section 6.2(h).
"Security Documents" means the collective reference to the Subsidiary
Guaranty Agreement, the Collateral Agreement, the Mortgages, the Collateral
Assignment Agreement, the Reaffirmation Agreement and each other agreement or
writing pursuant to which the Borrower or any Subsidiary thereof purports to
pledge or grant a security interest in any property or assets securing the
Obligations or any such Person purports to guaranty the payment and/or
performance of the Obligations, as reaffirmed pursuant to the Reaffirmation
Agreement, and all as amended, restated, supplemented or otherwise modified from
time to time.
"Senior Debt" means Total Debt less Subordinated Debt.
"Senior Secured Leverage Ratio" shall have the meaning assigned thereto
in Section 10.2.
"Senior Subordinated Notes" means the 9.00% unsecured senior
subordinated notes issued by the Borrower due November 1, 2013 in the aggregate
original principal amount not to exceed $125,000,000 as described in the
Indenture dated November 4, 2003.
"Solvent" means, as to the Borrower and its Subsidiaries on a
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 has
committed 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.
"SRLS Entities" means, collectively, SRLS LLC 5001, SRLS LLC 5002, SRLS
LLC 5003, SRLS LLC 5004, SRLS LLC 5005 and SRLS LLC 5006.
"Standard & Poor's" means Standard & Poor's Ratings Services, a
division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
16
"Subordinated Debt" means the collective reference to (i) the Senior
Subordinated Notes and (ii) other subordinated Debt consisting of high-yield
notes or convertible notes with a maturity no earlier than a date that is six
(6) months after the Revolving Credit Maturity Date issued on terms and
conditions (including subordination provisions) in form and substance reasonably
satisfactory to the Administrative Agent and consistent with then-current market
terms and conditions for such tenor of subordinated Debt.
"Subsidiary" means as to any Person, any corporation, partnership,
limited liability company 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, limited liability company or other entity is at
the time 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, partnership,
limited liability company or other entity 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
Borrower.
"Subsidiary Guaranteed Obligations" means the collective reference to
the guaranteed obligations of each of the Subsidiaries party to the Subsidiary
Guaranty Agreement.
"Subsidiary Guarantors" means the collective reference to the Domestic
Subsidiaries of the Borrower now or hereafter party to the Subsidiary Guaranty
Agreement; provided, however, that SRLS Entities and any Franchisees shall not
be Subsidiary Guarantors.
"Subsidiary Guaranty Agreement" means the unconditional guaranty
agreement dated as of January 27, 2003 executed by the Subsidiary Guarantors in
favor of the Administrative Agent for the ratable benefit of itself and the
Lenders, as reaffirmed pursuant to the Reaffirmation Agreement and as otherwise
amended, restated, supplemented or otherwise modified from time to time.
"Swingline Commitment" means the lesser of (a) Five Million Dollars
($5,000,000) and (b) the Revolving Credit Commitment.
"Swingline Facility" means the swingline facility established pursuant
to Section 2.2.
"Swingline Lender" means AmSouth Bank, in its capacity as provider of
Swingline Loans, or any successor swingline lender hereunder.
"Swingline Loan" means any swingline loan made by the Swingline Lender
to the Borrower pursuant to Section 2.2, and all such swingline loans
collectively as the context requires.
"Swingline Note" means the Amended and Restated Swingline Note made by
the Borrower payable to the order of the Swingline Lender, substantially in the
form of Exhibit A-2 hereto, evidencing the Swingline Loans, and any amendments,
supplements and modifications
17
thereto, any substitutes therefor, and any replacements, restatements, renewals
or extensions thereof, in whole or in part.
"Swingline Termination Date" means the Revolving Credit Termination
Date.
"Synthetic Lease" means any synthetic lease, tax retention operating
lease, off-balance sheet loan or similar off-balance sheet financing product
where such transaction is considered borrowed money indebtedness for tax
purposes but is classified as an Operating Lease in accordance with GAAP.
"Tax Expense" means, with respect to the Borrower and its Subsidiaries
for any period, federal, state, local and foreign income, value added and
similar taxes, franchise taxes and single business taxes imposed on the Borrower
or any of its Subsidiaries, without duplication, for such period.
"Taxes" shall have the meaning assigned thereto in Section 5.11(a).
"Termination Event" means except for any such event or condition that
could not reasonably be expected to have a Material Adverse Effect: (a)a
"Reportable Event" described in Section 4043 of ERISA for which the notice
requirement has not been waived by the PBGC, or (b)the withdrawal of the
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, if the plan assets are not sufficient
to pay all plan liabilities, 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 imposition of a Lien pursuant to
Section 412 of the Code or Section 302 of ERISA, or (g)the partial or complete
withdrawal of the Borrower or any ERISA Affiliate from a Multiemployer Plan if
withdrawal liability is asserted by such plan, or (h)any event or condition
which results in the reorganization or insolvency of 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.
"Total Debt" means, as of any date of determination with respect to the
Borrower and its Subsidiaries on a Consolidated basis without duplication, the
sum of all Debt of the Borrower and its Subsidiaries.
"Uniform Customs" means the Uniform Customs and Practice for
Documentary Credits (1993 Revision), effective January, 1994 International
Chamber of Commerce Publication No. 500.
"UCC" means the Uniform Commercial Code as in effect in the State of
New York, as amended or modified from time to time.
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"United States" means the United States of America.
"Wachovia" means Wachovia Bank, National Association, a national
banking association, and its successors.
"Working Capital" means, for any period of determination, current
assets minus cash and minus current liabilities (excluding any principal
payments associated with the Revolving Credit Loans), all determined in
accordance with GAAP.
SECTION 1.2 General. Unless otherwise specified, a reference in this
Agreement to a particular article, section, subsection, Schedule or Exhibit is a
reference to that article, 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.
(c) Plural and Singular. The meanings of defined terms are equally
applicable to the singular and plural forms of the defined terms.
ARTICLE II
REVOLVING CREDIT FACILITY
SECTION 2.1 Revolving Credit Loans. Subject to the terms and conditions
of this Agreement, and in reliance upon the representations and warranties set
forth herein, each Lender severally agrees to make Revolving Credit Loans to the
Borrower from time to time from the Closing Date through, but not including, the
Revolving Credit Maturity Date as requested by the Borrower in accordance with
the terms of Section 2.3; provided, that (a) the aggregate principal amount of
all outstanding Revolving Credit Loans (after giving effect to any amount
requested) shall not exceed the Revolving Credit Commitment less the Swingline
Commitment less all L/C Obligations and (b) the principal amount of outstanding
Revolving Credit Loans from any Lender to the Borrower shall not at any time
exceed such Lender's Revolving Credit
19
Commitment less such Lender's Revolving Credit Commitment Percentage of
outstanding L/C Obligations and less such Lender's Revolving Credit Commitment
Percentage of the Swingline Commitment. Each Revolving Credit Loan by a Lender
shall be in a principal amount equal to such Lender's Revolving Credit
Commitment Percentage of the aggregate principal amount of Revolving Credit
Loans requested on such occasion. Subject to the terms and conditions hereof,
the Borrower may borrow, repay and reborrow Revolving Credit Loans hereunder
until the Revolving Credit Maturity Date.
SECTION 2.2 Swingline Loans.
(a) Availability. Subject to the terms and conditions of this
Agreement, the Swingline Lender agrees to make Swingline Loans to the Borrower
from time to time from the Closing Date through, but not including, the
Swingline Termination Date; provided, that the aggregate principal amount of all
outstanding Swingline Loans (after giving effect to any amount requested), shall
not exceed the lesser of (i) the Revolving Credit Commitment less the sum of all
outstanding Revolving Credit Loans and the L/C Obligations and (ii) the
Swingline Commitment; provided further that the Swingline Lender will not make a
Swingline Loan after it has received written notice from the Administrative
Agent that one or more of the applicable conditions to Extensions of Credit
specified in Section 6.3 is not then satisfied until such conditions are
satisfied or waived in accordance with the provisions of this Agreement (and the
Swingline Lender shall be entitled to conclusively rely on any such notice and
shall have no obligation to independently investigate the accuracy of such
notice and shall have no liability to the Borrower in respect thereof if such
notice proves to be inaccurate).
(b) Procedure for Advances of Swingline Loans. The Borrower shall give
the Swingline Lender notice at such times and in such form and substance as may
be agreed upon by the Swingline Lender and the Borrower; provided, however, that
the obligation of the Swingline Lender under this Section 2.2 to make any such
Swingline Loan to the Borrower shall be subject to all the terms and conditions
hereof (including, without limitation, the terms and conditions set forth in
subsection (a) above).
(c) Payment of Principal and Interest. Principal and interest on
Swingline Loans deemed requested pursuant to Section 2.2(b) hereof shall be paid
pursuant to the terms and conditions agreed upon between the Swingline Lender
and the Borrower without any deduction, setoff or counterclaim whatsoever.
Principal and interest on Swingline Loans requested pursuant to Section 2.2
hereof shall be paid pursuant to the terms of this Agreement. Unless sooner paid
pursuant to the provisions hereof or the provisions of any Cash Management
Program, the principal of the Swingline Loans shall be paid in full, together
with accrued interest thereon, on the Swingline Termination Date.
(d) Refunding.
(i) Swingline Loans shall be refunded by the Lenders with a
Revolving Credit Commitment on demand by the Swingline Lender. Such refundings
shall be made by the Lenders in accordance with their respective Revolving
Credit Commitment Percentages and shall thereafter be reflected as Revolving
Credit Loans of the Lenders on the books and records of the
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Administrative Agent. Each Lender shall fund its respective Revolving Credit
Commitment Percentage of Revolving Credit Loans as required to repay Swingline
Loans outstanding to the Swingline Lender upon demand by the Swingline Lender
but in no event later than 2:00 p.m. (Charlotte time) on the next succeeding
Business Day after such demand is made. No Lender's obligation to fund its
respective Revolving Credit Commitment Percentage of a Swingline Loan shall be
affected by any other Lender's failure to fund its Revolving Credit Commitment
Percentage of a Swingline Loan, nor shall any Lender's Revolving Credit
Commitment Percentage be increased as a result of any such failure of any other
Lender to fund its Revolving Credit Commitment Percentage of a Swingline Loan.
(ii) The Borrower shall pay to the Swingline Lender on demand
the amount of such Swingline Loans to the extent amounts received from the
Lenders pursuant to subsection 2.2(d)(i) are not sufficient to repay in full the
outstanding Swingline Loans requested or required to be refunded. In addition,
the Borrower hereby authorizes the Administrative Agent to charge any account
maintained by the Borrower with the Swingline Lender (up to the amount available
therein) in order to immediately pay the Swingline Lender the amount of such
Swingline Loans to the extent amounts received from the Lenders pursuant to
subsection 2.2(d)(i) are not sufficient to repay in full the outstanding
Swingline Loans requested or required to be refunded. If any portion of any such
amount paid to the Swingline Lender shall be recovered by or on behalf of the
Borrower from the Swingline Lender in bankruptcy or otherwise, the loss of the
amount so recovered shall be ratably shared among all the Lenders in accordance
with their respective Revolving Credit Commitment Percentages (unless the
amounts so recovered by or on behalf of the Borrower pertain to a Swingline Loan
extended after the occurrence and during the continuance of an Event of Default
of which the Administrative Agent has received notice in the manner required
pursuant to Section 13.5 and which such Event of Default has not been waived by
the Required Lenders or the Lenders, as applicable).
(iii) Each Lender with a Revolving Credit Commitment
acknowledges and agrees that its obligation to refund Swingline Loans in
accordance with the terms of this Section 2.2 is absolute and unconditional and
shall not be affected by any circumstance whatsoever, including, without
limitation, non-satisfaction of the conditions set forth in Article VI. Further,
each Lender agrees and acknowledges that if prior to the refunding of any
outstanding Swingline Loans pursuant to this Section 2.2, one of the events
described in Section 12.1(j) or (k) shall have occurred, each Lender will, on
the date the applicable Revolving Credit Loan would have been made, purchase an
undivided participating interest in the Swingline Loan to be refunded in an
amount equal to its Revolving Credit Commitment Percentage of the aggregate
amount of such Swingline Loan. Each Lender will immediately transfer to the
Swingline Lender, in immediately available funds, the amount of its
participation and upon receipt thereof the Swingline Lender will deliver to such
Lender a certificate evidencing such participation dated the date of receipt of
such funds and for such amount. Whenever, at any time after the Swingline Lender
has received from any Lender such Lender's participating interest in a Swingline
Loan, the Swingline Lender receives any payment on account thereof, the
Swingline Lender will distribute to such Lender its participating interest in
such amount (appropriately adjusted, in the case of interest payments, to
reflect the period of time during which such Lender's participating interest was
outstanding and funded).
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SECTION 2.3 Procedure for Advances of Revolving Credit Loans.
(a) Requests for Borrowing.
(i) Revolving Credit Loans. The Borrower shall give the Administrative
Agent irrevocable prior written notice substantially in the form of Exhibit B
attached hereto (a "Notice of Borrowing") not later than 11:00 a.m. (Charlotte
time) (i) on the same Business Day as 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 $1,000,000 or a whole multiple of
$500,000 in excess thereof, and (y) with respect to LIBOR Rate Loans in an
aggregate principal amount of $3,000,000 or a whole multiple of $1,000,000 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. A Notice of Borrowing received after 11:00 a.m.
(Charlotte time) shall be deemed received on the next Business Day. The
Administrative Agent shall promptly notify the Lenders of each Notice of
Borrowing.
(ii) Swingline Loans. Swingline Loans shall be requested in the manner
set forth in Section 2.2(b).
(b) Disbursements.
(i) Revolving Credit Loans. Not later than 2:00 p.m. (Charlotte
time) on the proposed borrowing date, each Lender will make available to the
Administrative Agent, for the account of the Borrower, at the office of the
Administrative Agent in funds immediately available to the Administrative Agent,
such Lender's Revolving Credit Commitment Percentage of the Revolving Credit
Loans to be made on such borrowing date. The Borrower hereby irrevocably
authorizes the Administrative Agent to disburse the proceeds of each borrowing
requested pursuant to this Section 2.3 in immediately available funds by
crediting or wiring such proceeds to the deposit account of the Borrower
identified in the most recent notice substantially in the form of Exhibit C
hereto (a "Notice of Account Designation") delivered by the Borrower to the
Administrative Agent or as may be otherwise agreed upon by the Borrower and the
Administrative Agent from time to time. Subject to Section 5.7 hereof, the
Administrative Agent shall not be obligated to disburse the portion of the
proceeds of any Revolving Credit Loan requested pursuant to this Section 2.3 to
the extent that any Lender has not made available to the Administrative Agent
its Revolving Credit Commitment Percentage of such Loan. Revolving Credit Loans
to be made for the purpose of refunding Swingline Loans shall be made by the
Lenders as provided in Section 2.2(d).
(ii) Swingline Loans. Swingline Loans shall be disbursed in the manner
set forth in Section 2.2(b).
SECTION 2.4 Repayment of Loans.
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(a) Repayment on Termination Date. The Borrower hereby agrees to
repay the outstanding principal amount of (i) all Revolving Credit Loans in full
on the Revolving Credit Maturity Date, and (ii) all Swingline Loans in
accordance with Section 2.2(d), together, in each case, with all accrued but
unpaid interest thereon.
(b) Mandatory Repayment of Revolving Credit Loans. If at any time
the outstanding principal amount of all Revolving Credit Loans plus the
Swingline Commitment and L/C Obligations exceeds the Revolving Credit
Commitment, then the Borrower shall repay immediately upon notice from the
Administrative Agent, by payment to the Administrative Agent for the account of
the Lenders, Extensions of Credit in an amount equal to such excess with each
such repayment applied first to the principal amount of outstanding Swingline
Loans, second to the principal amount of outstanding Revolving Credit Loans and
third, with respect to any Letters of Credit then outstanding, a payment of cash
collateral into a cash collateral account opened by the Administrative Agent,
for the benefit of the Lenders in an amount equal to the aggregate then undrawn
and unexpired amount of such Letters of Credit (such cash collateral to be
applied in accordance with Section 12.2(b)).
(c) Optional Repayments. The Borrower 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 Administrative Agent with respect to
LIBOR Rate Loans and one (1) Business Day irrevocable notice with respect to
Base Rate Loans and Swingline Loans, substantially in the form attached hereto
as Exhibit D (a "Notice of Prepayment") specifying the date and amount of
repayment and whether the repayment is of LIBOR Rate Loans, Base Rate Loans,
Swingline Loans or a combination thereof, and, if of a combination thereof, the
amount allocable to each. Upon receipt of such notice, the Administrative 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 (i) of $1,000,000 or
a whole multiple of $500,000 in excess thereof with respect to Base Rate Loans
(other than Swingline Loans), (ii) of $3,000,000 or a whole multiple of
$1,000,000 in excess thereof with respect to LIBOR Rate Loans and (iii)
permitted pursuant to the Cash Management Program (or as otherwise agreed to by
the Swingline Lender and the Borrower) with respect to Swingline Loans. Each
such repayment shall be accompanied by any amount required to be paid pursuant
to Section 5.9 hereof.
(d) Limitation on Repayment of LIBOR Rate Loans. The Borrower 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 5.9 hereof.
(e) Hedging Agreements. No repayment or prepayment pursuant to
this Section 2.4 shall affect any of the Borrower's obligations under any
Hedging Agreement.
SECTION 2.5 Notes.
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(a) Revolving Credit Notes. Each Lender's Revolving Credit Loans
and the obligation of the Borrower to repay such Revolving Credit Loans shall be
evidenced by a separate Revolving Credit Note executed by the Borrower payable
to the order of such Lender.
(b) Swingline Note. The Swingline Loans and the obligation of the
Borrower to repay such Swingline Loans shall be evidenced by a Swingline Note
executed by the Borrower payable to the order of the Swingline Lender.
SECTION 2.6 Permanent Reduction of the Revolving Credit Commitment.
(a) Voluntary Reduction. The Borrower shall have the right at any
time and from time to time, upon at least five (5) Business Days prior written
notice to the Administrative Agent, to permanently reduce, without premium or
penalty, (i) the entire Revolving Credit Commitment at any time or (ii) portions
of the Revolving Credit Commitment, from time to time, in an aggregate principal
amount not less than $3,000,000 or any whole multiple of $1,000,000 in excess
thereof. The amount of each partial permanent reduction shall permanently reduce
the Lenders' Revolving Credit Commitments pro rata in accordance with their
respective Revolving Credit Commitment Percentages.
(b) [Intentionally Omitted].
(c) Corresponding Payment. Each permanent reduction permitted
pursuant to this Section 2.6 shall be accompanied by a payment of principal
sufficient to reduce the aggregate outstanding Revolving Credit Loans, Swingline
Loans and L/C Obligations, as applicable, after such reduction to the Revolving
Credit Commitment as so reduced and if the Revolving Credit Commitment as so
reduced is less than the aggregate amount of all outstanding Letters of Credit,
the Borrower shall be required to deposit cash collateral in a cash collateral
account opened by the Administrative Agent in an amount equal to the aggregate
then undrawn and unexpired amount of such Letters of Credit. Such cash
collateral shall be applied in accordance with Section 12.2(b). Any reduction of
the Revolving Credit Commitment to zero shall be accompanied by payment of all
outstanding Revolving Credit Loans and Swingline Loans (and furnishing of cash
collateral satisfactory to the Administrative Agent for all L/C Obligations) and
shall result in the termination of the Revolving Credit Commitment and the
Swingline Commitment and the Revolving Credit Facility. Such cash collateral
shall be applied in accordance with Section 12.2(b). If the reduction of the
Revolving Credit Commitment requires the repayment of any LIBOR Rate Loan, such
repayment shall be accompanied by any amount required to be paid pursuant to
Section 5.9.
SECTION 2.7 Termination of Revolving Credit Facility. The Revolving
Credit Facility shall terminate on the earliest of (a) November 4, 2007, (b) the
date of termination by the Borrower pursuant to Section 2.6, or (c) the date of
termination by the Administrative Agent on behalf of the Lenders pursuant to
Section 12.2(a).
SECTION 2.8 Increase of Revolving Credit Commitment.
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(a) At any time prior to the Revolving Credit Maturity Date, the
Borrower shall have the right to increase the Revolving Credit Commitment upon
not less than thirty (30) days prior written notice to the Administrative Agent
(which shall promptly notify the Lenders); provided that (i) no Lender shall
have any obligation to increase its Revolving Credit Commitment and the failure
by any Lender to respond to a request for such increase shall be deemed to be a
refusal of such request by such Lender, (ii) such requested increase shall be in
a minimum principal amount of $5,000,000 or a whole multiple of $5,000,000 in
excess thereof, (iii) in no event shall the Revolving Credit Commitment be
increased to an aggregate amount greater than One Hundred Fifty Million Dollars
($150,000,000), (iv) no Default or Event of Default shall have occurred and be
continuing either prior to or after giving effect to such increase in the
Revolving Credit Commitment, and (v) the Administrative Agent shall have
received a resolution duly adopted by the Board of Directors of the Borrower
authorizing the increase contemplated in this Section 2.8. Each Lender shall
notify the Administrative Agent whether or not it agrees to increase its
Revolving Credit Commitment and, if so, whether by an amount equal to, greater
than, or less than its Pro Rata Share of such requested increase (any increases
requested hereunder shall be offered to the Lenders on a pro rata basis prior to
offering any such increase to a Person that is not party to this Agreement). The
Administrative Agent shall notify the Borrower and each Lender of the Lender's
responses to each request made hereunder.
(b) Any increase in the Revolving Credit Commitment which is
accomplished by increasing the Commitment of any Lender or Lenders who are at
the time of such increase party to this Agreement (which Lender or Lenders may
consent to such increase in their sole and absolute discretion) shall be
accomplished as follows: (i) this Agreement will be amended by the Borrower, the
Administrative Agent and those Lender(s) whose Commitment(s) is or are being
increased to reflect the revised Commitment amounts of each of the Lenders, (ii)
the Administrative Agent will deliver an updated Register to the Borrower and
each of the Lenders reflecting the revised Commitment amounts and Commitment
Percentages of each of the Lenders, (iii) the Borrower shall pay any and all
costs required pursuant to Section 5.9 in connection with such reallocation as
if such reallocation were a repayment, and (iv) if requested, the Borrower will
deliver new Note(s) to the Lender or Lenders whose Commitment(s) is or are being
increased reflecting the revised Commitment amount of such Lender(s).
(c) Any increase in the Revolving Credit Commitment which is
accomplished by addition of a new Lender under the Agreement shall be
accomplished as follows: (i) such new Lender shall be an Eligible Assignee and
shall be subject to the consent of the Borrower and the Administrative Agent,
which consent shall not be unreasonably withheld, (ii) this Agreement will be
amended by the Borrower, the Administrative Agent and by the party becoming an
additional Lender hereunder to reflect the addition of such party as a Lender
hereunder, (iii) the Administrative Agent will deliver an updated Register to
the Borrower and each of the Lenders reflecting the revised Commitment amounts
and Commitment Percentages of each of the Lenders, (iv) the Borrower shall pay
any and all costs required pursuant to Section 5.9 in connection with such
reallocation as if such reallocation were a repayment, and (v) if requested, the
Borrower will deliver Note(s) to any such new Lender and new Note(s) to the
Lender or Lenders whose Commitment(s) is or are being increased reflecting the
revised Commitment amount of such Lender(s).
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ARTICLE III
LETTER OF CREDIT FACILITY
SECTION 3.1 L/C Commitment. Subject to the terms and conditions hereof,
the Issuing Lender, in reliance on the agreements of the L/C Participants set
forth in Section 3.4(a), agrees to issue standby Letters of Credit for the
account of the Borrower on any Business Day from the Closing Date through but
not including the fifth (5th) Business Day prior to the Revolving Credit
Maturity Date in such form as may be approved from time to time by the Issuing
Lender; provided, that the Issuing Lender shall have no obligation to issue, and
L/C Participants shall have no obligation to participate in, any Letter of
Credit if, after giving effect to such issuance, (a) the L/C Obligations would
exceed the L/C Commitment or (b) the aggregate principal amount of outstanding
Revolving Credit Loans, plus the Swingline Commitment, plus the aggregate amount
of L/C Obligations would exceed the Revolving Credit Commitment. Each Letter of
Credit shall (i) be in a minimum amount of $50,000, (ii) be a standby letter of
credit issued to support obligations of the Borrower or any of the Subsidiary
Guarantors, contingent or otherwise, incurred in the ordinary course of
business, (iii) expire on a date satisfactory to the Issuing Lender, which date
shall be no later than the earlier of (A) one year from the date of issuance of
such Letter of Credit and (B) the fifth (5th) Business Day prior to the
Revolving Credit Maturity Date and (iv) be subject to the Uniform Customs and/or
ISP98, as set forth in the Application or as determined by the Issuing Lender
and, to the extent not inconsistent therewith, the laws of the State of North
Carolina. The Issuing Lender shall not at any time be obligated to issue, and
L/C Participants shall have no obligation to participate in, any Letter of
Credit hereunder if such issuance would conflict with, or cause the Issuing
Lender or any L/C Participant to exceed any limits imposed by, any Applicable
Law. References herein to "issue" and derivations thereof with respect to
Letters of Credit shall also include extensions or modifications of any existing
Letters of Credit, unless the context otherwise requires. The Existing Letters
of Credit shall be deemed to be Letters of Credit issued and outstanding under
this Agreement on and after the Closing Date; provided, however, that such
Existing Letters of Credit shall be replaced by letters of credit issued by
Wachovia, as Issuing Lender, pursuant to and under the terms of this Agreement
upon the expiration and/or maturity thereof and shall not otherwise be extended,
renewed or modified.
SECTION 3.2 Procedure for Issuance of Letters of Credit. The Borrower
may from time to time request that the Issuing Lender issue a Letter of Credit
by delivering to the Issuing Lender at the Administrative Agent's Office an
Application therefor, completed to the satisfaction of the Issuing Lender, and
such other certificates, documents and other papers and information as the
Issuing Lender may reasonably request. Upon receipt of any Application, the
Issuing Lender shall process such Application and the certificates, documents
and other papers and information delivered to it in connection therewith in
accordance with its customary procedures and shall, subject to Section 3.1 and
Article VI hereof, promptly issue the Letter of Credit requested thereby (but in
no event shall the Issuing Lender be required to issue any Letter of Credit
earlier than three (3) Business Days after its receipt of the Application
therefor and all such other certificates, documents and other papers and
information relating thereto) by issuing the original of such Letter of Credit
to the beneficiary thereof or as otherwise may be agreed by the Issuing Lender
and the Borrower. The Issuing Lender shall promptly furnish to the Borrower
26
a copy of such Letter of Credit and promptly notify each Lender of the issuance
and upon request by any Lender, furnish to such Lender a copy of such Letter of
Credit and the amount of such Lender's Letter of Credit participation therein.
SECTION 3.3 Commissions and Other Charges.
(a) Letter of Credit Commission. The Borrower shall pay to the
Administrative Agent, for the account of the Issuing Lender and the L/C
Participants, a letter of credit commission with respect to each Letter of
Credit in an amount equal to the face amount of such Letter of Credit, as
applicable, multiplied by the Applicable Margin with respect to LIBOR Rate Loans
for the Revolving Credit Facility (determined on a per annum basis). Such
commission shall be payable quarterly in arrears on the last Business Day of
each calendar quarter and on the Revolving Credit Maturity Date. The
Administrative Agent shall, promptly following its receipt thereof, distribute
to the Issuing Lender and the L/C Participants all commissions received pursuant
to this Section 3.3(a) in accordance with their respective Revolving Credit
Commitment Percentages.
(b) Issuance Fee. In addition to the foregoing commission, the
Borrower shall pay the Issuing Lender, for its own account, an issuance fee with
respect to each Letter of Credit in an amount equal to the face amount of such
Letter of Credit multiplied by 0.125% per annum. Such issuance fee shall be
payable quarterly in arrears on the last Business Day of each calendar quarter
and on the Revolving Credit Maturity Date.
(c) Other Fees and Expenses. In addition to the foregoing fees and
commissions, the Borrower shall pay or reimburse the Issuing Lender, for its own
account, for such normal and customary costs and expenses as are incurred or
charged by the Issuing Lender in issuing, effecting payment under, amending or
otherwise administering any Letter of Credit.
SECTION 3.4 L/C Participations.
(a) Participations. The Issuing Lender irrevocably agrees to grant
and hereby grants to each L/C Participant, and, to induce the Issuing Lender to
issue Letters of Credit hereunder, each L/C Participant irrevocably agrees to
accept and purchase and hereby accepts and purchases from the Issuing Lender, on
the terms and conditions hereinafter stated, for such L/C Participant's own
account and risk an undivided interest equal to such L/C Participant's Revolving
Credit Commitment Percentage in the Issuing Lender's obligations and rights
under and in respect of each Letter of Credit issued hereunder and the amount of
each draft paid by the Issuing Lender thereunder. Each L/C Participant
unconditionally and irrevocably agrees with the Issuing Lender that, if a draft
is paid under any Letter of Credit for which the Issuing Lender is not
reimbursed in full by the Borrower through a Revolving Credit Loan or otherwise
in accordance with the terms of this Agreement, such L/C Participant shall pay
to the Issuing Lender upon demand at the Issuing Lender's address for notices
specified herein an amount equal to such L/C Participant's Revolving Credit
Commitment Percentage of the amount of such draft, or any part thereof, which is
not so reimbursed.
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(b) Payments by L/C Participants. Upon becoming aware of any
amount required to be paid by any L/C Participant to the Issuing Lender pursuant
to Section 3.4(a) in respect of any unreimbursed portion of any payment made by
the Issuing Lender under any Letter of Credit, the Issuing Lender shall notify
each L/C Participant of the amount and due date of such required payment and
such L/C Participant shall pay to the Issuing Lender the amount specified on the
applicable due date. If any such amount is paid to the Issuing Lender after the
date such payment is due, such L/C Participant shall pay to the Issuing Lender
on demand, in addition to such amount, the product of (i) such amount, times
(ii) the daily average Federal Funds Rate as determined by the Administrative
Agent during the period from and including the date such payment is due to the
date on which such payment is immediately available to the Issuing Lender, times
(iii) a fraction the numerator of which is the number of days that elapse during
such period and the denominator of which is 360. A certificate of the Issuing
Lender with respect to any amounts owing under this Section 3.4(b) shall be
conclusive in the absence of manifest error. With respect to payment to the
Issuing Lender of the unreimbursed amounts described in this Section 3.4(b), if
the L/C Participants receive notice that any such payment is due (A) prior to
1:00 p.m. (Charlotte time) on any Business Day, such payment shall be due that
Business Day, and (B) after 1:00 p.m. (Charlotte time) on any Business Day, such
payment shall be due on the following Business Day.
(c) Distributions to L/C Participants. Whenever, at any time after
the Issuing Lender has made payment under any Letter of Credit and has received
from any L/C Participant its Revolving Credit Commitment Percentage of such
payment in accordance with this Section 3.4, the Issuing Lender receives any
payment related to such Letter of Credit (whether directly from the Borrower or
otherwise, or any payment of interest on account thereof, the Issuing Lender
will distribute to such L/C Participant its pro rata share thereof; provided,
that in the event that any such payment received by the Issuing Lender shall be
required to be returned by the Issuing Lender, such L/C Participant shall return
to the Issuing Lender the portion thereof previously distributed by the Issuing
Lender to it.
SECTION 3.5 Reimbursement Obligation of the Borrower. In the event of
any drawing under any Letter of Credit, the Borrower agrees to reimburse (either
with the proceeds of a Revolving Credit Loan as provided for in this Section 3.5
or with funds from other sources), in same day funds, the Issuing Lender on each
date on which the Issuing Lender notifies the Borrower of the date and amount of
a draft paid under any Letter of Credit for the amount of (a) such draft so paid
and (b) any amounts referred to in Section 3.3(c) incurred by the Issuing Lender
in connection with such payment. Unless the Borrower shall immediately notify
the Issuing Lender that the Borrower intends to reimburse the Issuing Lender for
such drawing from other sources or funds, the Borrower shall be deemed to have
timely given a Notice of Borrowing to the Administrative Agent requesting that
the Lenders make a Revolving Credit Loan bearing interest at the Base Rate on
such date in the amount of (a) such draft so paid and (b) any amounts referred
to in Section 3.3(c) incurred by the Issuing Lender in connection with such
payment, and the Lenders shall make a Revolving Credit Loan bearing interest at
the Base Rate in such amount, the proceeds of which shall be applied to
reimburse the Issuing Lender for the amount of the related drawing and costs and
expenses. Each Lender acknowledges and agrees that its obligation to fund a
Revolving Credit Loan in accordance with this Section 3.5 to reimburse the
Issuing Lender for any draft paid under a Letter of Credit is absolute and
28
unconditional and shall not be affected by any circumstance whatsoever,
including, without limitation, non-satisfaction of the conditions set forth in
Section 2.3(a) or Article VI. If the Borrower has elected to pay the amount of
such drawing with funds from other sources and shall fail to reimburse the
Issuing Lender as provided above, the unreimbursed amount of such drawing shall
bear interest at the rate which would be payable on any outstanding Base Rate
Loans which were then overdue from the date such amounts become payable (whether
at stated maturity, by acceleration or otherwise) until payment in full.
SECTION 3.6 Obligations Absolute. The Borrower's obligations under this
Article III (including, without limitation, the Reimbursement Obligation) shall
be absolute and unconditional under any and all circumstances and irrespective
of any set-off, counterclaim or defense to payment which the Borrower may have
or have had against the Issuing Lender or any beneficiary of a Letter of Credit
or any other Person. The Borrower also agrees that the Issuing Lender and the
L/C Participants shall not be responsible for, and the Borrower's Reimbursement
Obligation under Section 3.5 shall not be affected by, among other things, the
validity or genuineness of documents or of any endorsements thereon, even though
such documents shall in fact prove to be invalid, fraudulent or forged, or any
dispute between or among the Borrower and any beneficiary of any Letter of
Credit or any other party to which such Letter of Credit may be transferred or
any claims whatsoever of the Borrower against any beneficiary of such Letter of
Credit or any such transferee. The Issuing Lender shall not be liable for any
error, omission, interruption or delay in transmission, dispatch or delivery of
any message or advice, however transmitted, in connection with any Letter of
Credit, except for errors or omissions caused by the Issuing Lender's gross
negligence or willful misconduct. The Borrower agrees that any action taken or
omitted by the Issuing Lender under or in connection with any Letter of Credit
or the related drafts or documents, if done in the absence of gross negligence
or willful misconduct, shall be binding on the Borrower and shall not result in
any liability of the Issuing Lender or any L/C Participant to the Borrower. The
responsibility of the Issuing Lender to the Borrower in connection with any
draft presented for payment under any Letter of Credit, in addition to any
payment obligation expressly provided for in such Letter of Credit, be limited
to determining that the documents (including each draft) delivered under such
Letter of Credit in connection with such presentment are in conformity with such
Letter of Credit.
SECTION 3.7 Effect of Application. To the extent that any provision of
any Application related to any Letter of Credit is inconsistent with the
provisions of this Article III, the provisions of this Article III shall apply.
ARTICLE IV
[Intentionally Omitted]
ARTICLE V
GENERAL LOAN PROVISIONS
SECTION 5.1 Interest.
29
(a) Interest Rate Options. Subject to the provisions of this
Section 5.1, at the election of the Borrower, (i) Revolving Credit Loans shall
bear interest at (A) the Base Rate plus the Applicable Margin as set forth in
Section 5.1(c) or (B) the LIBOR Rate plus the Applicable Margin as set forth in
Section 5.1(c) and (ii) any Swingline Loan shall bear interest at the Base Rate
plus the Applicable Margin as set forth in Section 5.1(c). The Borrower 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 2.3, as
applicable, or at the time a Notice of Conversion/Continuation is given pursuant
to Section 5.2. Any Loan or any portion thereof as to which the Borrower 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, the
Borrower, by giving notice at the times described in Section 5.1(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 with respect to each LIBOR Rate Loan; 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 immediately 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 immediately 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 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 Maturity Date; and
(v) there shall be no more than six (6) Interest Periods in
effect at any time.
(c) Applicable Margin. The Applicable Margin provided for in Section
5.1(a) with respect to any Loan (the "Applicable Margin") shall be based upon
the table set forth below and shall be determined and adjusted quarterly on the
date (each a "Calculation Date") ten (10) Business Days after the earlier of (i)
the date on which Borrower provides or (ii) the date on which the Borrower is
required to provide, an Officer's Compliance Certificate for the most recently
ended Fiscal Quarter of the Borrower; provided, however, that (A) the initial
Applicable Margin shall be based on Pricing Level III (as shown below) and shall
remain at Pricing Level III until the first Calculation Date occurring after the
Closing Date and, thereafter the Pricing Level shall be determined by reference
to the Senior Secured Leverage Ratio as of the last day of
30
the most recently ended Fiscal Quarter of the Borrower preceding the applicable
Calculation Date, and (B) if the Borrower fails to provide the Officer's
Compliance Certificate as required by Section 8.2 for the most recently ended
Fiscal Quarter of the Borrower preceding the applicable Calculation Date, the
Applicable Margin from such Calculation Date shall be based on Pricing Level I
(as shown below) until such time as an appropriate Officer's Compliance
Certificate is provided, at which time the Pricing Level shall be determined by
reference to the Senior Secured Leverage Ratio as of the last day of the most
recently ended Fiscal Quarter of the Borrower preceding such Calculation Date.
Subject to Sections 5.1(c)(ii)(A) and (B) in the preceding sentence, the
Applicable Margin shall be effective from one Calculation Date until the next
Calculation Date. Any adjustment in the Applicable Margin shall be applicable to
all Extensions of Credit then existing or subsequently made or issued.
Pricing Grid
Senior Secured
Level Leverage Ratio Applicable Base Rate Margin Applicable LIBOR Rate Margin
------------ ----------------------- --------------------------- ----------------------------
I Greater than or equal 1.00% 2.25%
to 1.75 to 1.00
-----------------------------------------------------------------------------------------------
II Greater than or equal 0.75% 2.00%
to 1.25 to 1.00 but
less than 1.75 to 1.00
-----------------------------------------------------------------------------------------------
III Greater than or equal 0.50% 1.75%
to 0.75 to 1.00 but
less than 1.25 to 1.00
-----------------------------------------------------------------------------------------------
IV Less than 0.75 to 1.00 0.00% 1.25%
-----------------------------------------------------------------------------------------------
(d) Default Rate. Subject to Section 12.3, at the discretion of
the Administrative Agent or as directed by the Required Lenders, upon the
occurrence and during the continuance of an Event of Default, (i) the Borrower
shall no longer have the option to request LIBOR Rate Loans or Swingline Loans,
(ii) all outstanding LIBOR Rate Loans shall bear interest at a rate per annum of
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 and other Obligations arising hereunder or under
any other Loan Document shall bear interest at a rate per annum equal to two
percent (2%) in excess of the rate then applicable to Base Rate Loans or such
other Obligations arising hereunder or under any other Loan Document. Interest
shall continue to accrue on the Notes after the filing by or against the
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.
31
(e) Interest Payment and Computation. Interest on each Base Rate
Loan shall be payable in arrears on the last Business Day of each calendar
quarter commencing December 31, 2003; and 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. Interest on LIBOR Rate Loans and all
fees payable hereunder shall be computed on the basis of a 360-day year and
assessed for the actual number of days elapsed and interest on Base Rate Loans
shall be computed on the basis of a 365/366-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 Administrative
Agent's option (i) promptly refund to the Borrower any interest received by the
Lenders in excess of the maximum lawful rate or (ii) apply such excess to the
principal balance of the Obligations on a pro rata basis. It is the intent
hereof that the Borrower not pay or contract to pay, and that neither the
Administrative 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 Borrower under Applicable Law.
SECTION 5.2 Notice and Manner of Conversion or Continuation of Loans.
Provided that no Default or Event of Default has occurred and is then
continuing, the Borrower shall have the option to (a) convert at any time
following the third Business Day after the Closing Date all or any portion of
any outstanding Base Rate Loans (other than Swingline Loans) in a principal
amount equal to $3,000,000 or any whole multiple of $1,000,000 in excess thereof
into one or more LIBOR Rate Loans and (b) upon the expiration of any Interest
Period, (i) convert all or any part of its outstanding LIBOR Rate Loans in a
principal amount equal to $1,000,000 or a whole multiple of $500,000 in excess
thereof into Base Rate Loans (other than Swingline Loans) or (ii) continue such
LIBOR Rate Loans as LIBOR Rate Loans. Whenever the Borrower desires to convert
or continue Loans as provided above, the Borrower shall give the Administrative
Agent irrevocable prior written notice in the form attached as Exhibit E (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 therefor, (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 Administrative Agent shall promptly notify the Lenders of such Notice of
Conversion/Continuation. LIBOR Rate Loans shall be converted to Base Rate Loans
upon the expiration of the applicable Interest Period unless the Administrative
Agent shall have received a Notice of Conversion/Continuation pursuant to the
above.
32
SECTION 5.3 Fees.
(a) Commitment Fee. Commencing on the Closing Date, the Borrower
shall pay to the Administrative Agent, for the account of the Lenders, a
non-refundable commitment fee at a rate per annum equal to the applicable rate
based upon the table set forth below (the "Commitment Fee Rate") on the
aggregate average daily unused portion of the Revolving Credit Commitment;
provided, that the amount of outstanding Swingline Loans shall not be considered
usage of the Revolving Credit Commitment for the purpose of calculating such
commitment fee. The commitment fee shall be payable in arrears on the last
Business Day of each calendar quarter during the term of this Agreement
commencing on the first such date following the Closing Date, and on the
Revolving Credit Maturity Date. Such commitment fee shall be distributed by the
Administrative Agent to the Lenders pro rata in accordance with the Lenders'
respective Revolving Credit Commitment Percentages. The Commitment Fee Rate
shall be based upon the table set forth below and shall be determined and
adjusted quarterly on each Calculation Date; provided, however, that (i) the
initial Commitment Fee Rate shall be based on Pricing Level III (as shown below)
and shall remain at Pricing Level III until the first Calculation Date occurring
after the Closing Date and thereafter the Pricing Level shall be determined by
reference to the Senior Secured Leverage Ratio as of the last day of the most
recently ended Fiscal Quarter of the Borrower preceding the applicable
Calculation Date, and (ii) if the Borrower fails to provide the Officer's
Compliance Certificate as required by Section 8.2 for the most recently ended
Fiscal Quarter of the Borrower preceding the applicable Calculation Date, the
Commitment Fee Rate from such Calculation Date shall be based on Pricing Level I
(as shown below) until such time as an appropriate Officer's Compliance
Certificate is provided, at which time the Pricing Level shall be determined by
reference to the Senior Secured Leverage Ratio as of the last day of the most
recently ended Fiscal Quarter of the Borrower preceding such Calculation Date.
Subject to Sections 5.3(a)(i) and (ii) in the preceding sentence, the Commitment
Fee Rate shall be effective from one Calculation Date until the next Calculation
Date.
Senior Secured
Pricing Level Leverage Ratio Commitment Fee Rate
------------------------------- ----------------------------- ------------------------------------------------------
I Greater than or equal to 0.500%
1.75 to 1.00
------------------------------- ----------------------------- ------------------------------------------------------
II Greater than or equal to 0.500%
1.25 to 1.0, but less than
1.75 to 1.00
------------------------------- ----------------------------- ------------------------------------------------------
III Greater than or equal to 0.375%
0.75 to 1.00 but less than
1.25 to 1.00
------------------------------- ----------------------------- ------------------------------------------------------
IV Less than 0.75 to 1.00 0.375%
------------------------------- ----------------------------- ------------------------------------------------------
(b) Upfront Fees. On the Closing Date, the Borrower shall pay to
the Administrative Agent, for the account of the Lenders, Upfront Fees as
provided in that certain fee letter between the Borrower and the Administrative
Agent dated as of October 31, 2003 (the "Fee Letter").
33
(c) Administrative Agent's and Other Fees. In order to compensate
the Administrative Agent for structuring and syndicating the Loans and for its
obligations hereunder, the Borrower agrees to pay to the Administrative Agent,
for its account, the administrative fee and other fees set forth in the Fee
Letter.
SECTION 5.4 Manner of Payment. Each payment by the Borrower on account
of the principal of or interest on the Loans or of any fee, commission or other
amounts (including the Reimbursement Obligation) 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
Administrative Agent at the Administrative Agent's Office for the account of the
Lenders (other than as set forth below) pro rata in accordance with their
respective Revolving Credit Commitment Percentages (except as specified below),
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 12.1, 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
Administrative Agent of each such payment, the Administrative 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 Revolving Credit
Commitment Percentage (except as specified below) and shall wire advice of the
amount of such credit to each Lender. Each payment to the Administrative Agent
of the Issuing Lender's fees or L/C Participants' commissions shall be made in
like manner, but for the account of the Issuing Lender or the L/C Participants,
as the case may be. Each payment to the Administrative Agent of Administrative
Agent's fees or expenses shall be made for the account of the Administrative
Agent and any amount payable to any Lender under Sections 5.8, 5.9, 5.10, 5.11
or 14.2 shall be paid to the Administrative Agent for the account of the
applicable Lender. Subject to Section 5.1(b)(ii) if any payment under this
Agreement or any Note shall be specified to be made upon a day which is not a
Business Day, it shall be made on the next succeeding day which is a Business
Day and such extension of time shall in such case be included in computing any
interest if payable along with such payment.
SECTION 5.5 Crediting of Payments and Proceeds. In the event that the
Borrower shall fail to pay any of the Obligations when due and the Obligations
have been accelerated pursuant to Section 12.2, 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: (a) first to all expenses then
due and payable by the Borrower hereunder and under the other Loan Documents,
(b) then to all indemnity obligations then due and payable by the Borrower
hereunder and under the other Loan Documents, (c) then to all Administrative
Agent's and Issuing Lender's fees then due and payable, (d) then to all
commitment and other fees and commissions then due and payable, (e) then to
accrued and unpaid interest on the Notes, accrued and unpaid interest on the
Reimbursement Obligation (pro rata in accordance with all such amounts due), (f)
then to the principal amount of the Notes and Reimbursement Obligation and any
payments (including any termination payments and any accrued and unpaid interest
thereon) due in respect of a Hedging Agreement with any Lender or the
Administrative Agent (which such Hedging Agreement is permitted hereunder) (pro
rata in accordance with all such amounts
34
due) and (g) then to the cash collateral account described in Section 12.2(b)
hereof to the extent of any L/C Obligations then outstanding, in that order.
SECTION 5.6 Adjustments. If any Lender (a "Benefited Lender") shall at
any time receive any payment of all or part of the Obligations owing to it, or
interest thereon, or if any Lender shall at any time receive any collateral in
respect to the Obligations owing to it (whether voluntarily or involuntarily, by
set-off or otherwise) (other than pursuant to Sections 5.8, 5.9, 5.10, 5.11 or
14.2 hereof) in a greater proportion than any such payment to and collateral
received by any other Lender, if any, in respect of the similar Obligations
owing to such other Lender, or interest thereon, such Benefited Lender shall
promptly notify the Administrative Agent of the receipt of such payment or
Collateral. The Administrative Agent shall then distribute such notice to the
other Lenders. The Benefited Lender shall purchase for cash from the other
Lenders such portion of each such other Lender's Extensions of Credit, or shall
provide such other Lenders with the benefits of any such collateral, or the
proceeds thereof, as shall be necessary to cause such Benefited 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 Benefited Lender, such purchase shall
be rescinded, and the purchase price and benefits returned to the extent of such
recovery, but without interest. The Borrower agrees that each Lender so
purchasing a portion of another Lender's Extensions of Credit 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 5.7 Nature of Obligations of Lenders Regarding Extensions of
Credit; Assumption by the Administrative Agent. The obligations of the Lenders
under this Agreement to make the Loans and issue or participate in Letters of
Credit are several and are not joint or joint and several. Unless the
Administrative Agent shall have received notice from a Lender prior to a
proposed borrowing date that such Lender will not make available to the
Administrative 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 Administrative Agent may assume that such Lender has made such
portion available to the Administrative Agent on the proposed borrowing date in
accordance with Section 2.3(b), and the Administrative Agent may, in reliance
upon such assumption, make available to the Borrower on such date a
corresponding amount. If such amount is made available to the Administrative
Agent on a date after such borrowing date, such Lender shall pay to the
Administrative Agent on demand an amount, until paid, equal to the product of
(a) the amount not made available by such Lender in accordance with the terms
hereof, times (b) the daily average Federal Funds Rate during such period as
determined by the Administrative 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 amount not made available by such Lender in accordance
with the terms hereof shall have become immediately available to the
Administrative Agent and the denominator of which is 360. A certificate of the
Administrative Agent with respect to any amounts owing under this Section 5.7
shall be conclusive, absent manifest error. If such Lender's Revolving Credit
Commitment Percentage of such borrowing is not made available to the
Administrative Agent by such Lender within three (3) Business Days after such
borrowing date, the Administrative Agent shall be entitled to recover such
amount made available by the Administrative Agent with interest
35
thereon at the rate per annum applicable to Base Rate Loans hereunder, on
demand, from the Borrower. The failure of any Lender to make available its
Revolving Credit Commitment Percentage of any Loan requested by the Borrower
shall not relieve it or any other Lender of its obligation, if any, hereunder to
make its Revolving Credit Commitment Percentage of such Loan available on the
borrowing date, but no Lender shall be responsible for the failure of any other
Lender to make its Revolving Credit Commitment Percentage of such Loan available
on the borrowing date. Notwithstanding anything set forth herein to the
contrary, any Lender that fails to make available its Revolving Credit
Commitment Percentage of any Loan shall not (a) have any voting or consent
rights under or with respect to any Loan Document or (b) constitute a "Lender"
(or be included in the calculation of Required Lenders hereunder) for any voting
or consent rights under or with respect to any Loan Document.
SECTION 5.8 Changed Circumstances.
(a) Circumstances Affecting LIBOR Rate Availability. If with
respect to any Interest Period the Administrative Agent or any Lender (after
consultation with the Administrative Agent) shall 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 the
Telerate Page 3750 or offered to the Administrative Agent or such Lender for
such Interest Period, then the Administrative Agent shall forthwith give notice
thereof to the Borrower. Thereafter, until the Administrative Agent notifies the
Borrower that such circumstances no longer exist, the obligation of the Lenders
to make LIBOR Rate Loans and the right of the Borrower to convert any Loan to or
continue any Loan as a LIBOR Rate Loan shall be suspended, and the Borrower
shall repay in full (or cause to be repaid in full) the then outstanding
principal amount of each such LIBOR Rate Loan 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 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 of the Lenders (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 Administrative Agent and the Administrative Agent shall promptly give notice
to the Borrower and the other Lenders. Thereafter, until the Administrative
Agent notifies the Borrower that such circumstances no longer exist, (i) the
obligations of the Lenders to make LIBOR Rate Loans and the right of the
Borrower to convert any Loan or continue any Loan as a LIBOR Rate Loan shall be
suspended and thereafter the Borrower 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.
36
(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 (except as provided in Section 5.11(e)) subject any
of the Lenders (or any of their respective Lending Offices) to any tax, duty or
other charge with respect to any Note, Letter of Credit, or Application 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, Letter
of Credit or Application or any other amounts due under this Agreement in
respect thereof (except for changes in the rate of franchise tax or tax on 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); provided
that the Borrower shall not be obligated to pay any amounts pursuant to this
Section 5.8(c)(i) to the extent that such amounts are duplicative of any amounts
paid by the Borrower pursuant to Section 5.11; or
(ii) shall impose, modify or deem applicable any reserve
(including, without limitation, any imposed by the Board of Governors of the
Federal Reserve System), 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 events described in clause (i) or
(ii) above is to increase the costs to any of the Lenders of maintaining any
LIBOR Rate Loan or issuing or participating in Letters of Credit 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 or
Letter of Credit or Application, then such Lender shall promptly notify the
Administrative Agent, and the Administrative Agent shall promptly notify the
Borrower of such fact and demand compensation therefor and, within fifteen (15)
days after such notice by the Administrative Agent, the Borrower shall pay to
such Lender such additional amount or amounts as will compensate such Lender or
Lenders for such increased cost or reduction. The Administrative Agent will
promptly notify the Borrower of any event of which it has knowledge which will
entitle such Lender to compensation pursuant to this Section 5.8(c); provided,
that the Administrative Agent shall incur no liability whatsoever to the Lenders
or the Borrower in the event it fails to do so. The amount of such compensation
shall be determined, in the applicable Lender's sole discretion, based upon the
assumption that such Lender funded its Revolving Credit 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. A certificate of such Lender setting forth the basis for determining
such amount or amounts necessary to compensate such Lender shall be forwarded to
the Borrower through the Administrative Agent and shall be conclusively presumed
to be correct save for manifest error.
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SECTION 5.9 Indemnity. The Borrower hereby indemnifies 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
Borrower 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 Borrower to borrow,
continue or convert on a date specified therefor in a Notice of Borrowing or
Notice of Conversion/Continuation 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. The amount of such loss or expense shall be
determined, in the applicable Lender's sole discretion, based upon the
assumption that such Lender funded its Revolving Credit 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. A certificate of such Lender setting forth the basis for determining
such amount or amounts necessary to compensate such Lender shall be forwarded to
the Borrower through the Administrative Agent and shall be conclusively presumed
to be correct save for manifest error.
SECTION 5.10 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 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 such 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 Borrower 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. A certificate as
to such amounts submitted to the Borrower and the Administrative Agent by such
Lender, shall, in the absence of manifest error, be presumed to be correct and
binding for all purposes.
SECTION 5.11 Taxes.
(a) Payments Free and Clear. Except as otherwise provided in
Section 5.11(e), any and all payments by the Borrower hereunder or under the
Notes or the Letters of Credit 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 Administrative Agent, income and franchise
taxes imposed by the jurisdiction under the laws of which such Lender or the
Administrative 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 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 Borrower shall be
required by law to deduct or withhold any Taxes from or in respect of any sum
payable hereunder or under any Note or in respect of any Letter of Credit to any
Lender or the Administrative Agent, (A) except as
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otherwise provided in Section 5.11(e), the sum payable shall be increased as may
be necessary so that after making all required deductions or withholdings
(including deductions or withholdings applicable to additional sums payable
under this Section 5.11) such Lender or the Administrative Agent (as the case
may be) receives an amount equal to the amount such party would have received
had no such deductions or withholdings been made, (B)the Borrower shall make
such deductions or withholdings, (C) the Borrower shall pay the full amount
deducted to the relevant taxing authority or other authority in accordance with
Applicable Law, and (D) the Borrower shall deliver to the Administrative Agent
and such Lender evidence of such payment to the relevant taxing authority or
other Governmental Authority in the manner provided in Section 5.11(d).
(b) Stamp and Other Taxes. In addition, the Borrower 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
Extensions of Credit, the Letters of Credit or the other Loan Documents, or the
perfection of any rights or security interest in respect thereof (hereinafter
referred to as "Other Taxes").
(c) Indemnity. Except as otherwise provided in Section 5.11(e),
the Borrower shall indemnify each Lender and the Administrative 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 5.11) paid by such Lender or the Administrative 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 Administrative 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, the Borrower shall furnish to the
Administrative Agent and the applicable Lender, at its address referred to in
Section 14.1, the original or a certified copy of a receipt evidencing payment
thereof or other evidence of payment satisfactory to the Administrative 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 Borrower, with a copy to the Administrative 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 W-9, Forms
W-8ECI or Forms W-8BEN, 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-8BEN or W-8ECI 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 Borrower, with a copy to the Administrative Agent, as applicable,
two Form W-9, Form W-8BEN or W-8ECI, 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
39
obsolete or after the occurrence of any event requiring a change in the most
recent form previously delivered by it to the Borrower, certifying in the case
of a Form W-9, Form W-8BEN or W-8ECI (or successor forms) 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 Borrower and
the Administrative 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-9, Form W-8BEN or W-8ECI, establishing an exemption from United
States backup withholding tax. Notwithstanding anything in any Loan Document to
the contrary, the Borrower shall not be required to pay additional amounts to
any Lender or the Administrative Agent under Section 5.11 or Section 5.8(c), (i)
if such Lender or the Administrative Agent fails to comply with the requirements
of this Section 5.11(e), other than to the extent that such failure is due to a
change in law occurring after the date on which such Lender or the
Administrative Agent became a party to this Agreement or (ii)that are the result
of such Lender's or the Administrative Agent's gross negligence or willful
misconduct, as applicable.
(f) Survival. Without prejudice to the survival of any other
agreement of the Borrower hereunder, the agreements and obligations of the
Borrower contained in this Section 5.11 shall survive the payment in full of the
Obligations and the termination of the Commitments.
SECTION 5.12 Security. The Obligations of the Borrower and the
Subsidiary Guaranteed Obligations shall be secured as provided in the Security
Documents.
SECTION 5.13 Replacement of Lenders.
(a) If any Lender requests compensation pursuant to Section 5.8 or
Section 5.10, or if the Borrower is required to pay any additional amount to any
Lender or any Governmental Authority for the account of any Lender pursuant to
Section 5.11, then such Lender shall use reasonable efforts to designate a
different lending office for funding or booking its Loans hereunder or to assign
its rights and obligations hereunder to another of its offices, branches or
affiliates, if, in the judgment of such Lender, such designation or assignment
(A) would eliminate or reduce amounts payable pursuant to Section 5.8, Section
5.10 or Section 5.11, as the case may be, in the future and (B) would not
subject such Lender to any unreimbursed cost or expense and would not otherwise
be disadvantageous to such Lender.
(b) If any Lender requests compensation pursuant to Section 5.8 or
Section 5.10, or if the Borrower is required to pay any additional amount to any
Lender or any Governmental Authority for the account of any Lender pursuant to
Section 5.11, then the Borrower may, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 14.10), all of its interests, rights and obligations under this
Agreement to an Eligible Assignee that shall assume such obligations (which
assignee may be another Lender, if a Lender accepts such assignment); provided
that (A) the Borrower shall have received the prior written consent of the
40
Administrative Agent, which consent shall not unreasonably be withheld, (B) such
Lender shall have received payment of an amount equal to the outstanding
principal of its Loans, accrued interest thereon, accrued fees, breakage costs
and all other amounts payable to it hereunder, from the assignee (to the extent
of such outstanding principal and accrued interest and fees) or the Borrower (in
the case of all other amounts) and (C) in the case of any such assignment
resulting from a claim for compensation pursuant to Section 5.8 or Section 5.10,
such assignment will result in a reduction in such compensation or payments. A
Lender shall not be required to make any such assignment and delegation if,
prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Borrower to require such assignment and delegation
cease to apply.
(c) To the extent that any Lender (a "Replaced Lender") is
required to assign all of its interests, rights and obligations under this
Agreement to an Eligible Assignee (a "Replacement Lender") pursuant to this
Section 5.13, upon the execution of all applicable assignment documents and the
satisfaction of all other conditions set forth herein, the Replacement Lender
shall become a Lender hereunder and the Replaced Lender shall cease to be a
Lender hereunder, except with respect to the indemnification provisions under
this Agreement, which provisions shall survive as to such Replaced Lender.
ARTICLE VI
CLOSING; CONDITIONS OF CLOSING AND BORROWING
SECTION 6.1 Closing. The closing shall take place at the offices of
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, L.L.P. at 10:00 a.m. on November 4, 2003,
or at such other place, and on such other date and time as the parties hereto
shall mutually agree.
SECTION 6.2 Conditions to Closing and Initial Extensions of Credit. The
obligation of the Lenders to close this Agreement and to make the initial Loan
or issue or participate in the initial Letter of Credit, if any, is subject to
the satisfaction of each of the following conditions:
(a) Executed Loan Documents. This Agreement, the Revolving Credit
Notes, the Swingline Note, the Security Documents, the Intercreditor and
Subordination Agreement, together with any other applicable Loan Documents,
shall have been duly authorized, executed and delivered to the Administrative
Agent by the parties thereto, shall be in full force and effect and no Default
or Event of Default shall exist thereunder, and the Borrower shall have
delivered original counterparts thereof to the Administrative Agent.
(b) Closing Certificates; etc.
(i) Officer's Certificate of the Borrower. The Administrative
Agent shall have received a certificate from a Responsible Officer, in form and
substance satisfactory to the Administrative Agent, to the effect that all
representations and warranties of the Borrower and its Subsidiaries contained in
this Agreement and the other Loan Documents are true, correct and complete; that
neither the Borrower nor any of its Subsidiaries is in violation of any of the
41
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 Borrower and its
Subsidiaries have satisfied each of the closing conditions.
(ii) Certificate of Secretary of the Borrower and each of the
Subsidiary Guarantors. The Administrative Agent shall have received a
certificate of the secretary or assistant secretary of the Borrower and each of
the Subsidiary Guarantors certifying as to the incumbency and genuineness of the
signature of each officer of the Borrower or such Subsidiary Guarantor executing
the Loan Documents to which it is a party and certifying that attached thereto
is a true, correct and complete copy of (A) the articles of incorporation or
other organizational document of the Borrower or such Subsidiary Guarantor and
all amendments thereto, certified as of a recent date by the appropriate
Governmental Authority in its jurisdiction of incorporation, (B) the bylaws or
other operative document of the Borrower or such Subsidiary Guarantor as in
effect on the date of such certifications, (C) resolutions duly adopted by the
Board of Directors or other governing body of the Borrower or such Subsidiary
Guarantor authorizing the borrowings contemplated hereunder and the execution,
delivery and performance of this Agreement and the other Loan Documents to which
it is a party, and (D) each certificate required to be delivered pursuant to
Section 6.2(b)(iii).
(iii) Certificates of Good Standing. The Administrative Agent
shall have received long-form certificates as of a recent date of the good
standing of the Borrower and each Subsidiary Guarantor under the laws of its
respective jurisdiction of organization and, to the extent requested by the
Administrative Agent, each other jurisdiction where the Borrower and each of the
Subsidiary Guarantors is qualified to do business and a certificate of the
relevant taxing authorities of such jurisdictions certifying that such Person
has filed required tax returns and owes no delinquent taxes.
(iv) Opinions of Counsel. The Administrative Agent shall have
received favorable opinions of counsel to the Borrower and the Subsidiary
Guarantors addressed to the Administrative Agent and the Lenders with respect to
the Borrower, the Loan Documents and such other matters as the Lenders shall
request.
(v) Tax Forms. The Administrative Agent shall have received
copies of the United States Internal Revenue Service forms required by Section
5.11(e) hereof.
(c) Collateral.
(i) Filings and Recordings. All filings and recordations that
are necessary to perfect the security interests of the Lenders in the collateral
described in the Security Documents shall have been received by the
Administrative Agent and the Administrative Agent shall have received evidence
satisfactory thereto that upon such filings and recordations such security
interests constitute valid and perfected first priority Liens therein, subject
only to Permitted Liens.
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(ii) Pledged Collateral. The Administrative Agent shall have
received (A) original stock certificates or other certificates evidencing the
capital stock or other ownership interests pledged pursuant to the Collateral
Agreement, together with an undated stock power for each such certificate duly
executed in blank by the registered owner thereof and (B) each original
promissory note pledged pursuant to the Collateral Agreement.
(iii) Hazard and Liability Insurance. The Administrative Agent
shall have received certificates of insurance, evidence of payment of all
insurance premiums for the current policy year of each, and, if requested by the
Administrative Agent, copies (certified by a Responsible Officer) of insurance
policies in the form required under the Security Documents and otherwise in form
and substance reasonably satisfactory to the Administrative Agent.
(iv) Real Property Information. The Administrative Agent shall
have received any and all certificates, documents and information reasonably
requested by Administrative Agent or the Lenders on the parcels of real property
subject to the Mortgages, including, without limitation, title insurance, title
exceptions, matters relating to flood hazard properties, surveys, environmental
assessments, engineering and structural reports, permanent certificates of
occupancy and evidence of zoning compliance, each in form and substance
reasonably satisfactory to the Administrative Agent.
(d) Consents; Defaults.
(i) Governmental and Third Party Approvals. The Borrower shall
have obtained all necessary approvals, authorizations and consents of any Person
and of all Governmental Authorities and courts having jurisdiction with respect
to the transactions contemplated by this Agreement and the other Loan Documents.
(ii) 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, the other Loan Documents or the consummation of the transactions
contemplated hereby or thereby, or which, in the Administrative Agent's sole
discretion, would make it inadvisable to consummate the transactions
contemplated by this Agreement and such other Loan Documents.
(iii) No Event of Default. No Default or Event of Default
shall have occurred and be continuing.
(e) Financial Matters.
(i) Financial Statements. The Administrative Agent shall have
received the most recent audited Consolidated financial statements of the
Borrower and its Subsidiaries, all in form and substance satisfactory to the
Administrative Agent and prepared in accordance with GAAP.
43
(ii) Financial Condition Certificate. The Borrower shall have
delivered to the Administrative Agent a certificate, in form and substance
satisfactory to the Administrative Agent, and certified as accurate by a
Responsible Officer, that (A) the Borrower and each of its Subsidiaries are each
Solvent, (B) the Borrower's and its Subsidiaries' payables are current and not
past due, (C) attached thereto are calculations evidencing compliance on a pro
forma basis with the covenants contained in Article X hereof, (D)the financial
projections previously delivered to the Administrative Agent represent the good
faith estimates (utilizing reasonable assumptions) of the financial condition
and operations of the Borrower and its Subsidiaries and (E) attached thereto is
a calculation of the Applicable Margin pursuant to Section 5.1(c).
(iii) Pro Forma Consolidated Financial Statements. The
Administrative Agent shall have received a pro forma Consolidated quarterly
balance sheet as of October 5, 2003 for the Borrower and its Subsidiaries giving
effect to the closing hereof, the consummation of the Sale-Leaseback Facility
and the issuance of the Senior Subordinated Notes, all in form and substance
satisfactory to the Administrative Agent.
(iv) Estimated Consolidated Income Statement. The
Administrative Agent shall have received an estimated Consolidated income
statement for the Borrower and its Subsidiaries for the Fiscal Quarter ended
October 5, 2003, all in form and substance satisfactory to the Administrative
Agent.
(v) Payment at Closing; Fee Letters. The Borrower shall have
paid to the Administrative Agent and the Lenders the fees set forth or
referenced in Section 5.3 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.
(f) Miscellaneous.
(i) Notice of Borrowing. The Administrative Agent shall have
received a Notice of Borrowing, as applicable, from the Borrower in accordance
with Section 2.3(a), and 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) Existing Debt. All Debt of the Borrower and its
Subsidiaries (including, without limitation, the Existing Facility), other than
Debt permitted pursuant to Section 11.1 and the Existing Letters of Credit,
shall be repaid in full and terminated and all security therefor released.
(iii) Due Diligence and Other 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 Administrative Agent. The Administrative Agent shall have
received copies of all other documents, certificates and
44
instruments reasonably requested thereby, with respect to the transactions
contemplated by this Agreement.
(g) Senior Subordinated Notes.
(i) Senior Subordinated Note Documents. The Administrative
Agent shall have received copies of all documents, certificates and instruments
reasonably requested by the Administrative Agent with respect to the
transactions contemplated by the Senior Subordinated Notes, and each such
document, certificate and instrument shall be in form and substance satisfactory
to the Administrative Agent.
(ii) Senior Subordinated Notes Issuance. The Borrower shall
have received, on or prior to the Closing Date, gross cash proceeds from the
issuance and sale for cash of the Senior Subordinated Notes in an aggregate
amount of at least $100,000,000 and such Senior Subordinated Notes issuance
shall be on terms and conditions (including, without limitation, the
subordination provisions applicable thereto) satisfactory to the Administrative
Agent.
(iii) Opinion of Counsel. The Administrative Agent shall have
received a copy of each opinion issued in connection with the Senior
Subordinated Notes along with a letter from counsel providing that such opinion
may be relied upon by the Administrative Agent and the Lenders.
(h) Sale-Leaseback Facility. The Borrower shall have entered into
and received $50,000,000 in gross proceeds from various purchase agreements and
leases dated as of October 17, 2003, between the Borrower, O'Charley's
Restaurant Properties, LLC and CNL Funding 2001-A L.P. or any of its Affiliates,
with respect to real property owned by the Borrower, upon terms and conditions
satisfactory to the Administrative Agent (the "Sale-Leaseback Facility"), and
the Administrative Agent shall have received copies of all documents,
certificates and instruments reasonably requested by the Administrative Agent
with respect to the transactions contemplated by the Sale-Leaseback Facility,
and each such document, certificate and instrument shall be in form and
substance satisfactory to the Administrative Agent.
(i) Application of Proceeds. Net cash proceeds from the
Sale-Leaseback Facility and the Senior Subordinated Notes shall have been used
and applied by the Borrower in a manner satisfactory to the Administrative
Agent.
(j) Repayment of Certain Amounts Outstanding under Existing Credit
Agreement. On the Closing Date, (i) all outstanding loans under the Existing
Credit Agreement (the "Existing Loans") made by any Existing Lender who is not a
Lender hereunder shall be repaid in full and the commitments and other
obligations and rights (except as expressly set forth in the Existing Credit
Agreement) of such Existing Lender shall be terminated, (ii) all outstanding
Existing Loans not being repaid under clause (i) above shall be deemed Revolving
Credit Loans hereunder and the Administrative Agent shall make such transfers of
funds as are necessary in order that the outstanding balance of such Revolving
Credit Loans together with any Revolving Credit Loans funded on the Closing
Date, are in accordance with the Revolving Credit Commitment Percentage of the
Lenders hereunder, (iii) there shall have been paid in cash in full
45
all accrued but unpaid interest due on the Existing Loans on the Closing Date,
(iv) there shall have been paid in cash in full all accrued but unpaid fees
under the Existing Credit Agreement due to the Existing Lenders and all other
amounts, costs and expenses then owing to any of the Existing Lenders and/or
Wachovia, as administrative agent under the Existing Credit Agreement, (v) all
outstanding Letters of Credit under the Existing Credit Agreement shall be
Letters of Credit hereunder and (vi) all outstanding promissory notes issued by
the Borrower to the Existing Lenders under the Existing Credit Agreement shall
be promptly returned to the Borrower for cancellation.
SECTION 6.3 Conditions to All Extensions of Credit. The obligations of
the Lenders to make any Extensions of Credit (including the initial Extension of
Credit), convert or continue any Loan and/or the Issuing Lender to issue or
extend any Letter of Credit are subject to the satisfaction of the following
conditions precedent on the relevant borrowing, continuation, conversion,
issuance or extension date:
(a) Continuation of Representations and Warranties. The
representations and warranties contained in Article VII shall be true and
correct on and as of such borrowing, continuation, conversion, issuance or
extension date with the same effect as if made on and as of such date, except
for any representation and warranty made as of an earlier date, which
representation and warranty shall remain true and correct as of such earlier
date.
(b) No Existing Default. No Default or Event of Default shall have
occurred and be continuing (i) on the borrowing, continuation or conversion date
with respect to such Loan or after giving effect to the Loans to be made,
continued or converted on such date or (ii) on the issuance or extension date
with respect to such Letter of Credit or after giving effect to the issuance or
extension of such Letter of Credit on such date.
(c) Notices. The Administrative Agent shall have received a Notice
of Borrowing or Notice of Conversion/Continuation, as applicable, from the
Borrower in accordance with Section 2.3(a).
(d) Additional Documents. The Administrative Agent shall have
received each additional document, instrument, legal opinion or other item
reasonably requested by it.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF THE BORROWER
SECTION 7.1 Representations and Warranties. To induce the
Administrative Agent and Lenders to enter into this Agreement and to induce the
Lenders to make Extensions of Credit, the Borrower and its Subsidiaries hereby
represent and warrant to the Administrative Agent and Lenders both before and
after giving effect to the transactions contemplated hereunder that:
(a) Organization; Power; Qualification. Each of the Borrower and
its Subsidiaries is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its
46
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 to the extent that the failure to
so qualify or be in good standing could not, in the aggregate, reasonably be
expected to have a Material Adverse Effect. The jurisdictions in which the
Borrower and its Subsidiaries are organized and qualified to do business as of
the Closing Date are described on Schedule 7.1(a).
(b) Ownership. Each Subsidiary of the Borrower as of the Closing
Date is listed on Schedule 7.1(b). As of the Closing Date, the capitalization of
the Borrower and its Subsidiaries consists of the number of shares, authorized,
issued and outstanding, of such classes and series, with or without par value,
membership interests, or other ownership interests described on Schedule 7.1(b).
All outstanding shares or other ownership interests have been duly authorized
and validly issued and are fully paid and nonassessable, with no personal
liability attaching to the ownership thereof, and not subject to any preemptive
or similar rights. The equityholders of the Subsidiaries of the Borrower and the
number of shares or other ownership units owned by each as of the Closing Date
are described on Schedule 7.1(b). As of the Closing Date, there are no
outstanding stock purchase warrants, subscriptions, options, securities,
instruments or other rights of any type or nature whatsoever, which are
convertible into, exchangeable for or otherwise provide for or permit the
issuance of capital stock, membership interests or other ownership interests of
the Borrower or its Subsidiaries, except as described on Schedule 7.1(b).
(c) Authorization of Agreement, Loan Documents and Borrowing. Each
of the Borrower 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 the Borrower and each of its Subsidiaries party
thereto, and each such document constitutes the legal, valid and binding
obligation of the Borrower or its Subsidiary party thereto, enforceable in
accordance with its terms, except as such enforceability 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 the Borrower and its
Subsidiaries of the Loan Documents to which each such Person is a party, in
accordance with their respective terms, the Extensions of Credit 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 the Borrower 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
the Borrower or any of its Subsidiaries or, except as could not reasonably be
expected to result in a Material Adverse Effect, 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,
(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
47
such Person other than Liens arising under the Loan Documents or (iv) require
any consent or authorization of, filing with, or other act in respect of, an
arbitrator or Governmental Authority and no consent of any other Person is
required in connection with the execution, delivery, performance, validity or
enforceability of this Agreement except, in each case, (A)as may be required by
laws affecting the offering and sale of securities generally, (B)filings with
the United States Copyright Office and/or the United States Patent and Trademark
Office, (C)filings under the UCC and recording of the Mortgages and (D)those
notices, consents and authorizations which have been obtained prior to the
Closing Date.
(e) Compliance with Law; Governmental Approvals. Each of the
Borrower 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, (ii) is in compliance with each Governmental Approval
applicable to it and in compliance with all other Applicable Laws relating to it
or any of its respective properties and (iii) has timely filed all material
reports, documents and other materials required to be filed by it under all
Applicable Laws with any Governmental Authority and has retained all material
records and documents required to be retained by it under Applicable Law in each
case, except as could not reasonably be expected to result in a Material Adverse
Effect.
(f) Tax Returns and Payments. Each of the Borrower and its
Subsidiaries has duly filed or caused to be filed all federal, state, local and
other tax returns required by Applicable Law to be filed, and has paid prior to
delinquency all 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. Such returns accurately reflect in all
material respects all liability for taxes of the Borrower and its Subsidiaries
for the periods covered thereby. There is no ongoing audit or examination or, to
the knowledge of the Borrower, other investigation by any Governmental Authority
of the tax liability of the Borrower and its Subsidiaries that could,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. No Governmental Authority has notified the Borrower or any of
its Subsidiaries of any Lien or other claim against the Borrower or any
Subsidiary thereof with respect to unpaid taxes which has not been discharged or
resolved. The charges, accruals and reserves on the books of the Borrower and
any of its Subsidiaries in respect of federal, state, local and other taxes for
all Fiscal Years and portions thereof since the organization of the Borrower and
any of its Subsidiaries are in the judgment of the Borrower adequate, and the
Borrower does not anticipate any additional taxes or assessments for any of such
years.
(g) Intellectual Property Matters. Each of the Borrower 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, service ▇▇▇▇, service ▇▇▇▇ rights,
trade names, trade name rights, copyrights and rights with respect to the
foregoing which are required to conduct its business except where the absence
thereof 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, to Borrower's
knowledge, neither the Borrower nor any Subsidiary thereof is liable to any
48
Person for infringement under Applicable Law with respect to any such rights as
a result of its business operations.
(h) Environmental Matters. Except as to matters described in
Schedule 7.1(h) which could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect:
(i) The properties owned, leased or operated by the Borrower
and its Subsidiaries now do not contain, and to their knowledge have not
previously contained, any Hazardous Materials in amounts or concentrations which
(A) constitute or constituted a material violation of applicable Environmental
Laws or (B) could give rise to any material liability under applicable
Environmental Laws;
(ii) The Borrower, each Subsidiary and such properties and all
operations conducted in connection therewith are in material compliance, and
have been in material compliance, with all applicable Environmental Laws, and
there is no contamination 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 the Borrower nor any Subsidiary thereof has
received any notice of violation, alleged violation, non-compliance, liability
or potential liability regarding environmental matters, Hazardous Materials, or
compliance with Environmental Laws, nor does the Borrower 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 to or from the properties owned, leased or operated by the Borrower and its
Subsidiaries in violation of, or in a manner or to a location which could give
rise to liability under, 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 the Borrower, threatened, under any
Environmental Law to which the Borrower or any Subsidiary thereof is or will be
named as a potentially responsible 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
Environmental Law with respect to Borrower, any Subsidiary or such properties or
such operations; and
(vi) There has been no release, or to the best of the
Borrower's knowledge, threat of release, of Hazardous Materials at or from any
properties owned, leased or operated by the Borrower or any Subsidiary, now or
in the past, in violation of or in amounts or in a manner that could give rise
to any material liability under Environmental Laws.
(i) ERISA.
49
(i) As of the Closing Date, neither the Borrower nor any ERISA
Affiliate maintains or contributes to, or has any obligation under, any Employee
Benefit Plans other than those identified on Schedule 7.1(i);
(ii) The Borrower and each ERISA Affiliate is in material
compliance 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 for which the remedial amendment period as
defined in Section 401(b) of the Code has not yet expired and except where a
failure to so comply could not reasonably be expected to have a Material Adverse
Effect. 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 except for such plans that have not
yet received determination letters but for which the remedial amendment period
for submitting a determination letter has not yet expired. No liability has been
incurred by the Borrower or any ERISA Affiliate which remains unsatisfied for
any taxes or penalties with respect to any Employee Benefit Plan or any
Multiemployer Plan except for a liability that could not reasonably be expected
to have a Material Adverse Effect;
(iii) As of the Closing Date, no Pension Plan has been
terminated for which the liabilities have not been satisfied in full, 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 the 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) Except where the failure of any of the following
representations to be correct in all material respects could not reasonably be
expected to have a Material Adverse Effect, neither the Borrower nor any ERISA
Affiliate has: (A) engaged in a nonexempt prohibited transaction described in
Section 406 of the ERISA or Section 4975 of the Code, (B) 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, (C) failed to make a
required contribution or payment to a Multiemployer Plan, or (D) failed to make
a required installment or other required payment under Section 412 of the Code;
(v) No Termination Event has occurred or is reasonably
expected to occur; and
(vi) Except where the failure of any of the following
representations to be correct in all material respects could not reasonably be
expected to have a Material Adverse Effect, no proceeding, claim (other than a
benefits claim in the ordinary course of business), lawsuit and/or investigation
is existing or, to the best knowledge of the Borrower after due
50
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 the Borrower or any ERISA Affiliate, (B) Pension Plan or (C) Multiemployer
Plan.
(j) Margin Stock. Neither the Borrower 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, directly or indirectly, in Regulation U of the
Board of Governors of the Federal Reserve System). No part of the proceeds of
any of the Loans or Letters of Credit 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 T, U or X of such Board of Governors.
(k) Government Regulation. Neither the Borrower 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 the Borrower nor any Subsidiary thereof is, or
after giving effect to any Extension of Credit 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 (including, without
limitation, the Trading with the Enemy Act, the United States Treasury
Department foreign assets control regulations and Executive Order 13224 Blocking
Property and Prohibiting Transactions with Persons Who Commit, Threaten to
Commit, or Support Terrorism) which limits its ability to incur or consummate
the transactions contemplated hereby.
(l) Material Contracts. Schedule 7.1(l) sets forth a complete and
accurate list of all Material Contracts of the Borrower and its Subsidiaries in
effect as of the Closing Date not listed on any other Schedule hereto; other
than as set forth in Schedule 7.1(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. The Borrower and its Subsidiaries have delivered to the Administrative
Agent a true and complete copy of each Material Contract required to be listed
on Schedule 7.1(l) or any other Schedule hereto. Neither the Borrower nor any
Subsidiary (nor, to the knowledge of the Borrower, any other party thereto) is
in breach of or in default under any Material Contract in any material respect.
(m) Employee Relations. Each of the Borrower and its Subsidiaries
has a stable work force in place and is not, as of the Closing Date, party to
any collective bargaining agreement nor has any labor union been recognized as
the representative of its employees except as set forth on Schedule 7.1(m). The
Borrower knows of no pending, threatened or contemplated strikes, work stoppage
or other collective labor disputes involving its employees or those of its
Subsidiaries that could, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
(n) Burdensome Provisions. Neither the Borrower 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. The Borrower 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
51
Adverse Effect. No Subsidiary is party to any agreement or instrument or
otherwise subject to any restriction or encumbrance that restricts or limits its
ability to make dividend payments or other distributions in respect of its
capital stock to the Borrower or any Subsidiary or to transfer any of its assets
or properties to the Borrower or any other Subsidiary in each case other than
existing under or by reason of the Loan Documents or Applicable Law.
(o) Financial Statements. The (i) audited Consolidated balance
sheet of the Borrower and its Subsidiaries as of December 29, 2002 and the
related audited statements of income and retained earnings and cash flows for
the Fiscal Year then ended and (ii) unaudited Consolidated balance sheet of the
Borrower and its Subsidiaries as of July 13, 2003 and related unaudited interim
statements of income and retained earnings, copies of which have been furnished
to the Administrative Agent and each Lender, are complete and correct in all
material respects and fairly present on a Consolidated basis the assets,
liabilities and financial position of the Borrower and its Subsidiaries as at
such dates, and the results of the operations and changes of financial position
for the periods then ended (other than customary year-end adjustments for
unaudited financial statements). All such financial statements, including the
related schedules and notes thereto, have been prepared in accordance with GAAP.
The Borrower 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 29, 2002, there has
been no material adverse change in the properties, business, operations, or
condition (financial or otherwise) of the Borrower 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 Extension of Credit made hereunder, the Borrower and each of its
Subsidiaries will be Solvent.
(r) Titles to Properties. Schedule 7.1(r) sets forth a list of
each parcel of real property owned or leased by the Borrower or its Subsidiaries
as of the Closing Date. Each of the Borrower and its Subsidiaries has such title
to the real property owned or leased by it as is necessary 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 the
Borrower and its Subsidiaries delivered pursuant to Section 7.1(o), except those
which have been disposed of by the Borrower 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 the Borrower or
any Subsidiary thereof is subject to any Lien, except Liens permitted pursuant
to Section 11.2. No financing statement under the Uniform Commercial Code of any
state which names the Borrower 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 the Borrower nor
any Subsidiary thereof has signed any such financing statement or any security
agreement
52
authorizing any secured party thereunder to file any such financing statement,
except to perfect those Liens permitted by Section 11.2 hereof.
(t) Debt and Guaranty Obligations. Schedule 7.1(t) is a complete
and correct listing of all Debt and Guaranty Obligations of the Borrower and its
Subsidiaries as of the Closing Date in excess of $1,000,000. The Borrower and
its Subsidiaries have performed and are in compliance in all material respects
with all of the terms of such Debt and Guaranty Obligations and all instruments
and agreements relating thereto, and no default or event of default, or event or
condition which with notice or lapse of time or both would constitute such a
default or event of default on the part of the Borrower or any of its
Subsidiaries exists with respect to any such Debt or Guaranty Obligation.
(u) Litigation. Except for matters existing on the Closing Date
which are set forth on Schedule 7.1(u), there are no actions, suits or
proceedings pending or, to the knowledge of the Borrower, threatened against the
Borrower 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 for which liability to the Borrower or its Subsidiaries could
reasonably be expected to have a Material Adverse Effect.
(v) Absence of Defaults. No event has occurred or is continuing
which constitutes a Default or an Event of Default, or which constitutes, or
which with the passage of time or giving of notice or both would constitute, a
default or event of default by the Borrower or any Subsidiary thereof under any
Material Contract or judgment, decree or order to which the Borrower or its
Subsidiaries is a party or by which the Borrower or its Subsidiaries or any of
their respective properties may be bound or which would require the Borrower or
its Subsidiaries to make any payment thereunder prior to the scheduled maturity
date therefor.
(w) Senior Debt Status. The Obligations of the Borrower and each
of its Subsidiaries under this Agreement and each of the other Loan Documents
ranks and shall continue to rank at least senior in priority of payment to the
Senior Subordinated Notes and all other Subordinated Debt of each such Person
and is designated as "Senior Indebtedness" under all instruments and documents,
now or in the future, relating to the Senior Subordinated Notes and all other
Subordinated Debt of such Person.
(x) Accuracy and Completeness of Information. All written
information, reports and other papers and data produced by or on behalf of the
Borrower or any Subsidiary thereof (other than financial projections, which
shall be subject to the standard set forth in Section 8.1(c)) and furnished to
the Lenders were, at the time the same were so furnished, complete and correct
in all 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 Administrative Agent or the Lenders by the Borrower 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 the Borrower or
its Subsidiaries or omits or will omit to state a fact necessary in order to
make the statements contained therein not misleading. The Borrower is not aware
of any facts which it has not disclosed in writing to the Administrative Agent
having a Material Adverse Effect, or insofar as
53
the Borrower can now foresee, which could reasonably be expected to have a
Material Adverse Effect.
(y) Tax Shelter Regulations. The Borrower does not intend to treat
the Loans and/or Letters of Credit as being a "reportable transaction" (within
the meaning of Treasury Regulation Section 1.6011-4). In the event the Borrower
determines to take any action inconsistent with such intention, it will promptly
notify the Administrative Agent thereof. If the Borrower so notifies the
Administrative Agent, the Borrower acknowledges that the Administrative Agent
and/or one or more of the Lenders may treat the Loans and/or Letters of Credit
as part of a transaction that is subject to Treasury Regulation Section
301.6112-1, and the Administrative Agent and/or such Lender or Lenders, as
applicable, will maintain the lists and other records required by such Treasury
Regulation.
SECTION 7.2 Survival of Representations and Warranties, Etc. All
representations and warranties set forth in this Article VII and all
representations and warranties 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 (except those that are expressly made as of a
specific 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 VIII
FINANCIAL INFORMATION AND NOTICES
Until all the Obligations have been paid and satisfied in full and the
Commitments terminated, unless consent has been obtained in the manner set forth
in Section 14.11, the Borrower will furnish or cause to be furnished to the
Administrative Agent at the Administrative Agent's Office at the address set
forth in Section 14.1 and to the Lenders at their respective addresses as set
forth in the Register, or such other office as may be designated by the
Administrative Agent and Lenders from time to time:
SECTION 8.1 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 the first three (3)
Fiscal Quarters of each Fiscal Year (or, if either such date is earlier, on the
date of any required public filing thereof, or five (5) days following any date
on which the Borrower may be required by GAAP to file such statements), an
unaudited Consolidated and consolidating balance sheet of the Borrower and its
Subsidiaries as of the close of such Fiscal Quarter and unaudited Consolidated
and consolidating 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 as of the end of and for the
corresponding period in the preceding Fiscal Year and prepared by the Borrower
in accordance with GAAP and, if
54
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
the Borrower to present fairly in all material respects the financial condition
of the Borrower and its Subsidiaries on a Consolidated and consolidating basis
as of their respective dates and the results of operations of the Borrower 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 (or, if either
such date is earlier, on the date of any required public filing thereof, or five
(5) days following any date on which the Borrower may be required by GAAP to
file such statements), an audited Consolidated balance sheet of the Borrower 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 as of the end of and for the
preceding Fiscal Year and prepared by an independent certified public accounting
firm approved by the Audit Committee of the Board of Directors of the Borrower
and reasonably acceptable to the Administrative Agent 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 year, and accompanied by a report thereon by
such certified public accountants that is not qualified with respect to scope
limitations imposed by the Borrower or any of its Subsidiaries or with respect
to accounting principles followed by the Borrower 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 sixty (60) days after the beginning of each
Fiscal Year, a business plan of the Borrower and its Subsidiaries for the
ensuing four (4) Fiscal Quarters and the Fiscal Year thereafter, such plan to be
prepared in accordance with GAAP and to include, on a quarterly basis, the
following: a quarterly operating and capital budget for the ensuing four (4)
Fiscal Quarters, a yearly operating and capital budget for the Fiscal Year
thereafter, 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
the Borrower to the effect that, to the best of such officer's knowledge, such
projections are good faith estimates (utilizing reasonable assumptions) of the
projected financial condition and operations of the Borrower and its
Subsidiaries for such period.
SECTION 8.2 Officer's Compliance Certificate. At each time financial
statements are delivered pursuant to Sections 8.1 (a) or (b) and at such other
times as the Administrative Agent shall reasonably request, a certificate of the
chief financial officer or the treasurer of the Borrower in the form of Exhibit
F attached hereto (an "Officer's Compliance Certificate").
SECTION 8.3 Accountants' Certificate. At each time financial statements
are delivered pursuant to Section 8.1(b), a certificate of the independent
public accountants certifying such financial statements addressed to the
Administrative Agent for the benefit of the Lenders:
55
(a) stating that in making the examination necessary for the
certification of such financial statements, they obtained no knowledge of any
Default or Event of Default or, if such is not the case, specifying such Default
or Event of Default and its nature and period of existence; and
(b) including the calculations prepared by such accountants
required to establish whether or not the Borrower and its Subsidiaries are in
compliance with the financial covenants set forth in Article X hereof as at the
end of each respective period.
SECTION 8.4 Other Reports.
(a) Promptly upon receipt thereof, copies of all reports, if any,
submitted to the Borrower or its Board of Directors by its independent public
accountants in connection with their auditing function, including, without
limitation, any management report and any management responses thereto;
(b) Such other information regarding the operations, business
affairs and financial condition of the Borrower or any of its Subsidiaries as
the Administrative Agent or any Lender may reasonably request; and
(c) Promptly after the Borrower has notified the Administrative
Agent of any intention by the Borrower to treat the Loans and/or Letters of
Credit as being a "reportable transaction" (within the meaning of Treasury
Regulation Section 1.6011-4), a duly completed copy of IRS Form 8886 or any
successor form.
SECTION 8.5 Notice of Litigation and Other Matters. Prompt (but in no
event later than ten (10) days after an officer of the Borrower 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 the Borrower or any Subsidiary
thereof or any of their respective properties, assets or businesses which in any
such case could reasonably be expected to result in a Material Adverse Effect;
(b) any notice of any violation received by the 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 or other work action against the Borrower or any Subsidiary
thereof that could reasonably be expected to have a Material Adverse Effect;
56
(d) any attachment, judgment, Lien, levy or order exceeding
$2,500,000 that may be assessed against or threatened in writing against the
Borrower or any Subsidiary thereof;
(e) (i) any Default or Event of Default, (ii) the occurrence or
existence of any event or circumstance that foreseeably will become a Default or
Event of Default or (iii) 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 the Borrower or any of its
Subsidiaries is a party or by which the Borrower or any 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 the 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 the 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) the Borrower
obtaining knowledge or reason to know that the 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;
(g) any event which makes any of the representations set forth in
Section 7.1 inaccurate in any respect;
(h) any Ratings Downgrade;
(i) a copy of any notice of any default or event of default,
acceleration, redemption, request for a material waiver, request for a material
amendment or any other notice of a material event delivered to or received by
any Person (including, without limitation, any trustee or noteholder) in
connection with the Senior Subordinated Notes or any other Subordinated Debt.
SECTION 8.6 Accuracy of Information. All written information, reports,
statements and other papers and data furnished by or on behalf of the Borrower
to the Administrative Agent or any Lender whether pursuant to this Article VIII
or any other provision of this Agreement, or any of the Security Documents,
shall be, at the time the same is so furnished, comply with the representations
and warranties set forth in Section 7.1(x).
ARTICLE IX
AFFIRMATIVE COVENANTS
Until all of the Obligations have been paid and satisfied in full and
the Commitments terminated, unless consent has been obtained in the manner
provided for in Section 14.11, the Borrower will, and will cause each of its
Subsidiaries to:
57
SECTION 9.1 Preservation of Corporate Existence and Related Matters.
Except as permitted by Section 11.4, preserve and maintain its separate
corporate, limited liability company or partnership existence and all rights,
franchises, licenses and privileges necessary to the conduct of its business,
and qualify and remain qualified as a foreign corporation, limited liability
company or limited partnership and authorized to do business in each
jurisdiction where the nature and scope of its activities require it to so
qualify under Applicable Law except where the failure to so qualify could not
reasonably be expected to have a Material Adverse Effect.
SECTION 9.2 Maintenance of Property. In addition to the requirements of
any of the Security Documents, protect and preserve in accordance with sound
business practices all properties useful in and material to its business,
including copyrights, patents, trade names, service marks and trademarks;
maintain in accordance with sound business practices 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.
SECTION 9.3 Insurance. Maintain insurance with financially sound and
reputable insurance companies against such risks and in such amounts as are
customarily maintained by similar businesses (including hazard and business
interruption coverage) and as are required by Applicable Law and as are required
by any Security Documents, and on the Closing Date and from time to time
thereafter deliver to the Administrative 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 9.4 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 9.5 Payment and Performance of Obligations. Pay and perform all
Obligations or Subsidiary Guaranteed Obligations, as applicable, under this
Agreement and the other Loan Documents, and pay or perform (a) all taxes,
assessments and other governmental charges that may be levied or assessed upon
it or any of its property, and (b) all other indebtedness, obligations and
liabilities in accordance with customary trade practices; provided, that the
Borrower or such Subsidiary may contest any item described in clauses (a) or (b)
of this Section 9.5 in good faith so long as adequate reserves are maintained
with respect thereto in accordance with GAAP.
SECTION 9.6 Compliance with Laws and Approvals. Observe and remain in
compliance in all material respects with all Applicable Laws and maintain in
full force and effect all material Governmental Approvals, in each case
applicable to the conduct of its business.
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SECTION 9.7 Environmental Laws. In addition to and without limiting the
generality of Section 9.6, (a)comply in all material respects with, and ensure
such compliance by all tenants and subtenants with all applicable Environmental
Laws and obtain and comply with and maintain, and ensure that all tenants and
subtenants, if any, obtain and comply in all material respects with and
maintain, any and all licenses, approvals, notifications, registrations or
permits required by applicable Environmental Laws, (b) conduct and complete all
investigations, studies, sampling and testing, and all remedial, removal and
other actions required under Environmental Laws, and promptly comply with all
lawful orders and directives of any Governmental Authority regarding
Environmental Laws, and (c) defend, indemnify and hold harmless the
Administrative 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 presence
of Hazardous Materials, or the violation of, noncompliance with or liability
under any Environmental Laws applicable to the operations of the Borrower or any
such Subsidiary, or any orders, requirements or demands of Governmental
Authorities related thereto, including, without limitation, reasonable
attorney's and 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 9.8 Compliance with ERISA. In addition to and without limiting
the generality of Section 9.6, (a) except where the failure to so comply could
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect, (i) comply with all material applicable provisions of ERISA and
the regulations and published interpretations thereunder with respect to all
Employee Benefit Plans, (ii) 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,
(iii) not participate in any prohibited transaction that could result in any
civil penalty under ERISA or tax under the Code and (iv) operate each Employee
Benefit Plan in such a manner that will not incur any tax liability under
Section 4980B of the Code or any liability to any qualified beneficiary as
defined in Section 4980B of the Code and (b) furnish to the Administrative Agent
upon the Administrative Agent's request such additional information about any
Employee Benefit Plan as may be reasonably requested by the Administrative Agent
to the extent that the furnishing of such information does not violate ERISA,
the Health Insurance Portability and Accountability Act of 1996 or any other
Applicable Law.
SECTION 9.9 Compliance with Agreements. Comply in all material 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.
SECTION 9.10 Visits and Inspections. Permit representatives of the
Administrative Agent or any Lender, from time to time, to visit and inspect its
properties; inspect, audit and make extracts from its books, records and files,
including, but not limited to, management letters prepared by independent
accountants; and discuss with its principal officers, and its independent
accountants, its business, assets, liabilities, financial condition, results of
operations and business prospects. Unless a Default or Event of Default has
occurred and is continuing, the representatives of the Administrative Agent or
any Lender will provide the
59
Borrower with advance notice of such visits and inspections, and will visit and
inspect during the Borrower's normal business hours.
SECTION 9.11 Additional Subsidiaries; Equipment; Real Property
Acquisitions.
(a) Additional Domestic Subsidiaries. Within thirty (30) days
after the creation or acquisition of any Domestic Subsidiary of the Borrower
(excluding any Franchisees) with assets in excess of $150,000, cause to be
executed and delivered to the Administrative Agent (i) duly executed joinder
agreements in form and substance reasonably satisfactory to the Administrative
Agent joining such Subsidiary to the Collateral Agreement, the Collateral
Assignment Agreement and any other applicable Security Documents, (ii) updated
Schedules 7.1(a), 7.1(b) and 7.1(r) reflecting the creation or acquisition of
such Subsidiary, (iii) a Subsidiary Guaranty Agreement duly executed and
delivered by such Subsidiary, (iv) favorable legal opinions addressed to the
Administrative Agent and Lenders in form and substance reasonably satisfactory
thereto with respect to such joinder agreement, (v) original stock or other
certificates and stock or other transfer powers evidencing the ownership
interests of the Borrower in such Subsidiary, (vi) all documents required by
Section 9.11(c), and (vii) any other documents and certificates as may be
requested by the Administrative Agent.
(b) Additional Foreign Subsidiaries. Notify the Administrative
Agent at the time that any Person becomes a first tier Foreign Subsidiary of the
Borrower (excluding any Franchisees), and promptly thereafter (and in any event
within thirty (30) days), cause (i) the Borrower or applicable Subsidiary to
deliver to the Administrative Agent a supplement to the Security Documents
pledging sixty-five percent (65%) of the total outstanding ownership interest or
capital stock of such new Foreign Subsidiary and a consent thereto executed by
such new Foreign Subsidiary (including, without limitation, if applicable,
original stock certificates (or the equivalent thereof pursuant to the
Applicable Laws and practices of any relevant foreign jurisdiction) evidencing
the capital stock of such new Foreign Subsidiary, together with an appropriate
undated stock power for each certificate duly executed in blank by the
registered owner thereof), (ii) such Person to deliver to the Administrative
Agent documents of the types referred to in clauses (ii) and (iii) of Section
6.2(b) and favorable opinions of counsel to such Person (which shall cover,
among other things, the legality, validity, binding effect and enforceability of
the documentation referred to in clauses (i) and (ii)), and (iii) such Person to
deliver to the Administrative Agent such other documents and closing
certificates as may be reasonably requested by the Administrative Agent, all in
form, content and scope reasonably satisfactory to the Administrative Agent
(c) Equipment; Real Property Acquisitions.
(i) Within thirty (30) days after the date of a Ratings
Downgrade, the Borrower shall deliver to the Administrative Agent a first
priority perfected security interest in all equipment of the Borrower and its
direct and indirect Subsidiaries (excluding any SRLS Entity and any Franchisees)
and shall execute any and all documents requested by the Administrative Agent,
all in form and substance acceptable to the Administrative Agent, to evidence
such security interest.
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(ii) Within forty-five (45) days after the occurrence of a
Ratings Downgrade, the Borrower or its direct and indirect Subsidiaries
(excluding any SRLS Entity and any Franchisees) shall, with respect to all real
property acquired after the Closing Date (and any other real property owned by
the Borrower or its direct and indirect Subsidiaries not then subject to a
Mortgage), cause to be executed and delivered to the Administrative Agent (A)
Mortgages (unless otherwise agreed by the Administrative Agent and the Required
Lenders), (B) an updated Schedule 8.1(r) together with title insurance policies,
copies of title exceptions, flood surveys, property surveys, environmental
assessments and any other related real property documentation, all in form and
content reasonably acceptable to the Administrative Agent and (C) an updated
Schedule 7.1(h) in form and content reasonably acceptable to the Administrative
Agent.
(d) Additional Subsidiary Guarantors. Notwithstanding anything to
the contrary contained herein, in the event that any Subsidiary shall guaranty
the payment or performance of the Senior Subordinated Notes, the Borrower shall
cause such Subsidiary to immediately execute a joinder to the Subsidiary
Guaranty Agreement and the Security Documents described in Section 9.11(a) and
to deliver all of the other instruments, documents, certificates and opinions
required pursuant to Section 9.11(a).
SECTION 9.12 Use of Proceeds. The Borrower shall use the proceeds of
the Extensions of Credit (a) to refinance existing indebtedness of the Borrower,
(b) for general corporate purposes of the Borrower and the Subsidiary
Guarantors, including, without limitation, working capital, capital expenditures
in the ordinary course of business and Permitted Acquisitions (which may include
stock repurchases of up to $25,000,000 of the Borrower's capital stock), and (c)
to pay fees and expenses incurred in connection with the transactions
contemplated herein.
SECTION 9.13 Conduct of Business. Engage only in businesses in
substantially the same fields as the businesses conducted on the Closing Date.
SECTION 9.14 Further Assurances. Make, execute and deliver all such
additional and further acts, things, deeds and instruments as the Administrative
Agent or any Lender (through the Administrative Agent) may reasonably require to
document and consummate the transactions contemplated hereby and to vest
completely in and insure the Administrative Agent and the Lenders their
respective rights under this Agreement, the Notes, the Letters of Credit and the
other Loan Documents.
SECTION 9.15 Landlord Consents. Use its best good faith efforts to
obtain and deliver landlord consents, estoppel letters of consent and waivers in
respect of Collateral held on leased premises as may be reasonably required from
time to time by the Administrative Agent.
ARTICLE X
FINANCIAL COVENANTS
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Until all of the Obligations have been paid and satisfied in full and
the Commitments terminated, unless consent has been obtained in the manner set
forth in Section 14.11, the Borrower and its Subsidiaries on a Consolidated
basis will not:
SECTION 10.1 Maximum Adjusted Debt to EBITDAR Ratio. As of any Fiscal
Quarter end, permit the ratio of (a) Adjusted Debt on such date (less any cash
existing on the Consolidated balance sheet on such date) to (b) EBITDAR for the
period of four (4) consecutive Fiscal Quarters ending on or immediately prior to
such date to be greater than 4.75 to 1.
SECTION 10.2 Maximum Senior Secured Leverage Ratio: As of any Fiscal
Quarter end, permit the ratio of (a) Senior Debt on such date (less any cash
existing on the Consolidated balance sheet on such date) to (b) EBITDA for the
period of four (4) consecutive Fiscal Quarters ending on or immediately prior to
such date to be greater than 2.00 to 1.00; provided, however, that for purposes
of calculating compliance with this financial covenant, EBITDA for the four (4)
consecutive Fiscal Quarter period ending on or immediately prior to such date
shall be reduced to reflect rental expense associated with any sale-leaseback
transaction permitted hereunder on a pro forma basis.
SECTION 10.3 Minimum Fixed Charge Coverage Ratio: As of any Fiscal
Quarter end, permit the ratio of (a) EBITDAR for the period of four (4)
consecutive Fiscal Quarters ending on or immediately prior to such date minus
the greater of (i) Maintenance Capital Expenditures for the period of four (4)
consecutive Fiscal Quarters ending on or immediately prior to such date or (ii)
50% of depreciation for the period of four (4) consecutive Fiscal Quarters
ending on or immediately prior to such date to (b) Rental Expense for the period
of four (4) consecutive Fiscal Quarters ending on or immediately prior to such
date (provided, however, that for purposes of calculating compliance with this
Section 10.3, Rental Expense for the four (4) consecutive Fiscal Quarter period
ending on such date shall be increased to include rental expense associated with
any sale-leaseback transaction permitted hereunder on a pro forma basis) plus
Interest Expense for the period of four (4) consecutive Fiscal Quarters ending
on or immediately prior to such date plus the aggregate amount of any Permitted
Note Repurchases by the Borrower for the period of four (4) consecutive Fiscal
Quarters ending on or immediately prior to such date to be less than the
corresponding ratio set forth below:
PERIOD MINIMUM RATIO
----------------------------------------------------------------------------- -------------------------
Closing Date through and including the last day of Fiscal Year 2004 1.25 to 1.00
----------------------------------------------------------------------------- -------------------------
Fiscal Year 2005 and thereafter 1.50 to 1.00
----------------------------------------------------------------------------- -------------------------
SECTION 10.4 Minimum Asset Coverage Ratio. As of any Fiscal Quarter
end, permit the Asset Coverage Ratio to be less than 1.00 to 1.00.
SECTION 10.5 Minimum Capital Expenditures Ratio. As of any Fiscal
Quarter end, permit the ratio of (a) 90% of EBITDA to (b) Expansion Capital
Expenditures to be less than 1.00 to 1.00; provided, however, that for purposes
of calculating compliance with this financial covenant, the Borrower shall be
entitled to add back to EBITDA 20% of the Net Cash
62
Proceeds from issuances of equity consummated during the four (4) consecutive
Fiscal Quarter period ending on such date in an aggregate amount not to exceed
$10,000,000 for any one such equity issuance; provided, further, that for
purposes of calculating compliance with this financial covenant, EBITDA for the
four (4) consecutive Fiscal Quarter period ending on or immediately prior to
such date shall be reduced to reflect rental expense associated with any
sale-leaseback transaction permitted hereunder on a pro forma basis.
ARTICLE XI
NEGATIVE COVENANTS
Until all of the Obligations have been paid and satisfied in full and
the Commitments terminated, unless consent has been obtained in the manner set
forth in Section 14.11, the Borrower will not and will not permit any of its
Subsidiaries to:
SECTION 11.1 Limitations on Debt. Create, incur, assume or suffer to
exist any Debt except:
(a) the Obligations (excluding Hedging Obligations permitted pursuant
to Section 11.1(b));
(b) Debt incurred in connection with a Hedging Agreement with a
counterparty and upon terms and conditions (including interest rate) reasonably
satisfactory to the Administrative Agent; provided, that any counterparty that
is a Lender shall be deemed satisfactory to the Administrative Agent.
(c) Debt existing on the Closing Date and not otherwise permitted
under this Section 11.1, as set forth on Schedule 7.1(t), and the renewal,
refinancing, extension and replacement (but not the increase in the aggregate
principal amount) thereof;
(d) purchase money Debt of the Borrower and its Subsidiaries, and Debt
of the Borrower and its Subsidiaries incurred in connection with Capitalized
Leases;
(e) unsecured Debt of the Borrower and the Subsidiary Guarantors
not otherwise permitted hereunder in an aggregate amount not to exceed
$15,000,000 on any date of determination;
(f) the Senior Subordinated Notes and other Subordinated Debt;
provided, however, (i) that no Default or Event of Default shall have occurred
and be continuing and would be caused by the issuance of such Subordinated Debt
and (ii) the Administrative Agent shall have received satisfactory written
evidence that the Borrower would be in compliance with all covenants contained
in this Agreement on a pro forma basis after giving effect to the issuance of
any such Subordinated Debt;
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(g) Guaranty Obligations (including, without limitation, the
Subsidiary Guaranteed Obligations) in favor of the Administrative Agent for the
benefit of the Administrative Agent and the Lenders;
(h) Guaranty Obligations with respect to Debt permitted pursuant
to subsections (a) through (d) and (f) of this Section 11.1;
(i) Guaranty Obligations of the Borrower with respect to (i) Debt
of the Subsidiary Guarantors permitted pursuant to subsection (e) of this
Section 11.1 and (ii) Operating Leases of the Subsidiary Guarantors;
(j) Guaranty Obligations with respect to Debt of (i) Franchisees
of the Borrower or (ii) any SRLS Entities; provided, that the aggregate
outstanding amount of all such Guaranty Obligations plus the aggregate amount of
all Permitted Acquisitions permitted under Section 11.3(c) hereunder plus the
aggregate outstanding amount of all investments (other than Permitted
Acquisitions) permitted under Section 11.3(c) hereunder plus the aggregate
amount of all sales permitted under Section 11.5(l) hereunder shall not exceed
$30,000,000 in the aggregate during the term of the Credit Facility; and
(k) Debt owed by any Subsidiary Guarantor to the Borrower, by the
Borrower to any Subsidiary Guarantor, or by any Subsidiary Guarantor to another
Subsidiary Guarantor.
provided, that no agreement or instrument with respect to Debt permitted to be
incurred by this Section shall restrict, limit or otherwise encumber (by
covenant or otherwise) the ability of any Subsidiary of the Borrower to make any
payment to the Borrower or any of the Subsidiary Guarantors (in the form of
dividends, intercompany advances or otherwise) for the purpose of enabling the
Borrower to pay the Obligations; provided, further, that notwithstanding any of
the foregoing, no SRLS Entity shall be permitted to incur any Guaranty
Obligations.
SECTION 11.2 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, 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;
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(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, materially detract from the value of such property or materially
impair the use thereof in the ordinary conduct of business;
(e) Liens of the Administrative Agent for the benefit of the
Administrative Agent and the Lenders;
(f) Liens not otherwise permitted by this Section 11.2 and in
existence on the Closing Date and described on Schedule 11.2; and
(g) Liens securing Debt permitted under Section 11.1(d); provided
that (i) such Liens shall be created within six (6) months from the date of 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 one hundred percent (100%)
of the original purchase price or lease payment amount of such property at the
time it was acquired.
SECTION 11.3 Limitations on Loans, Advances, Investments and
Acquisitions. Purchase, own, invest in or otherwise acquire, directly or
indirectly, any capital stock, 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 except:
(a) investments (i) in Subsidiaries existing on the Closing Date,
(ii)in Subsidiaries (other than the SRLS Entities and any Franchisees) formed or
acquired after the Closing Date so long as the Borrower and the Subsidiaries
(other than the SRLS Entities and any Franchisees) comply with all applicable
provisions of this Credit Agreement (including, without limitation, Section
9.11), (iii)loans made pursuant to Section 11.1(k) hereof, and (iv) the other
loans, advances and investments described on Schedule 11.3 existing on the
Closing Date;
(b) investments in (i)marketable direct obligations issued or
unconditionally guaranteed by the United States of America or any agency thereof
maturing within one year from the date of acquisition thereof, (ii)commercial
paper, variable or fixed rate notes maturing no more than six (6) months from
the date of acquisition thereof and issued by, or guaranteed by, a domestic
corporation rated A-1 (or the equivalent thereof) or better by Standard& Poor's
or P-1 (or the equivalent thereof) or better by ▇▇▇▇▇'▇ Investors Service, Inc.,
(iii)certificates of deposit maturing no more than one year from the date of
creation thereof issued by any of the Lenders or 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
65
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, (iv)time deposits maturing no more than thirty (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 or (v) repurchase agreements with a
Lender or a bank or trust company or a recognized securities dealer having
capital and surplus in excess of $500,000,000 for direct obligations issued by
or fully guaranteed by the United States of America (such investments described
in items (i) through (v) above, "Cash Equivalents");
(c) investments by the Borrower or any of the Subsidiary
Guarantors in the form of acquisitions of a substantially similar business or
line of business (whether by the acquisition of capital stock, assets or any
combination thereof) of any other Person (each, a "Permitted Acquisition") and
other investments by the Borrower or any of the Subsidiary Guarantors in (i)
Franchisees of the Borrower or (ii) any SRLS Entities; provided, however, that
the aggregate amount of all such Permitted Acquisitions permitted under this
Section 11.3(c) plus the aggregate outstanding amount of all investments (other
than Permitted Acquisitions) permitted under Section this 11.3(c) plus the
aggregate outstanding amount of all Guaranty Obligations permitted under Section
11.1(j) hereunder plus the aggregate amount of all sales permitted under Section
11.5(l) hereunder shall not exceed $30,000,000 in the aggregate during the term
of the Credit Facility;
(d) Hedging Agreements permitted pursuant to Section 11.1;
(e) purchases of assets in the ordinary course of business;
(f) other loans, investments and advances in an aggregate amount not to
exceed $500,000 on any date of determination; and
(g) investments in "rabbi trusts" made by the Borrower or any
Subsidiary Guarantor in connection with executive deferred compensation
arrangements entered into by the Borrower or such Subsidiary Guarantor in the
ordinary course of business consistent with past practice.
SECTION 11.4 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 Subsidiary Guarantor of the Borrower may merge with the
Borrower or any other Subsidiary Guarantor of the Borrower; provided that in any
merger involving the Borrower, the Borrower shall be the surviving entity;
(b) any Subsidiary Guarantor of the Borrower may merge into the
Person such Subsidiary Guarantor was formed to acquire in connection with a
Permitted Acquisition; provided that the Subsidiary Guarantor shall be the
surviving entity; and
66
(c) any Subsidiary Guarantor of the Borrower may wind-up into the
Borrower or any other Subsidiary Guarantor and any Foreign Subsidiary of the
Borrower may wind-up into the Borrower or any Subsidiary Guarantor.
SECTION 11.5 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 sale of any receivables and leasehold
interests and any sale-leaseback 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 the Borrower or any of its Subsidiaries;
(c) the transfer of assets to the Borrower or any Subsidiary Guarantor
of the Borrower pursuant to Section 11.4;
(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 disposition of any Hedging Agreement;
(f) sales of real property acquired before the Closing Date made
in connection with sale-leaseback transactions consummated at arms-length after
the Closing Date on terms and conditions reasonably satisfactory to the
Administrative Agent so long as (i) the Borrower shall have demonstrated to the
Administrative Agent pro forma compliance with each covenant contained in, and
in the manner set forth on, Article X prior to the consummation of such
sale-leaseback transaction, (ii) that no Default or Event of Default shall have
occurred and be continuing both before and after giving effect thereto, and
(iii) the aggregate amount of Net Cash Proceeds resulting from all such
sale-leaseback transactions shall not exceed an aggregate amount of $35,000,000
during the term of the Credit Facility;
(g) sales of assets made in connection with store closings and
store relocations in an aggregate annual amount not to exceed $5,000,000;
(h) sales by Stoney River Management Company, Inc. of up to 6% of the
membership interests in each of the SRLS Entities, to the general manager of
each such entity pursuant to, and in accordance with, the terms and provisions
set forth in each such entity's operating agreement;
(i) sales made in connection with Build-to-Suit Sale-Leaseback
Transactions; provided that (i) no Default or Event of Default has occurred and
is continuing both before and after giving effect thereto and (ii) the Borrower
is in compliance with all covenants contained in this Agreement on a pro forma
basis after giving effect to the contemplated Build-to-Suit Sale-Leaseback
Transaction;
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(j) sales of real property acquired after the Closing Date made in
connection with sale-leaseback transactions that do not otherwise qualify as
Build-to-Suit Sale-Leaseback Transactions hereunder so long as (i) no Default or
Event of Default has occurred and is continuing both before and after giving
effect thereto, (ii) the Borrower is in compliance with all covenants contained
in this Agreement on a pro forma basis after giving effect to such
sale-leaseback transaction and (iii) the aggregate amount of all such
sale-leaseback transactions does not exceed $25,000,000 during the term of the
Credit Facility;
(k) the Sale-Leaseback Facility;
(l) sales to Franchisees or any SRLS Entities of (i) Borrower's
existing restaurant facility in Jonesboro, Arkansas, and (ii) other assets;
provided, that the aggregate amount of all such sales plus the aggregate
outstanding amount of all Guaranty Obligations permitted under Section 11.1(j)
hereunder plus the aggregate amount of all Permitted Acquisitions permitted
under Section 11.3(c) hereunder plus the aggregate outstanding amount of all
investments (other than Permitted Acquisitions) permitted under Section 11.3(c)
hereunder shall not exceed $30,000,000 in the aggregate during the term of the
Credit Facility; and
(m) sales by OCI, Inc. of all or any part of (i) the shares of common
stock of ▇. ▇▇▇▇▇▇▇▇▇ Corporation, and/or (ii) the investments in the Evergreen
MMF, both as more particularly described on Schedule 11.3.
Upon the consummation of sales made pursuant to the above Section 11.5,
and upon the request of the Borrower, the Administrative Agent and the Lenders
will release their liens on the applicable property and the Administrative Agent
shall execute such documents as may be necessary to evidence such releases, all
such documents to be in form and substance satisfactory to the Administrative
Agent.
SECTION 11.6 Limitations on Dividends and Distributions. Declare or pay
any dividends upon any of its capital stock or any other ownership interests;
purchase, redeem, retire or otherwise acquire, directly or indirectly, any
shares of its capital stock or other ownership interests, or make any
distribution of cash, property or assets among the holders of shares of its
capital stock or other ownership interests, or make any change in its capital
structure; provided that:
(a) the Borrower or any Subsidiary may pay dividends in shares of its
own capital stock, membership interests, or other ownership units; and
(b) any Subsidiary may pay cash dividends to the Borrower or to its
parent Subsidiary;
(c) the Borrower may redeem and repurchase shares of its stock
pursuant to a repurchase program authorized from time to time by its Board of
Directors in an aggregate amount not to exceed $25,000,000 over the term of the
Credit Facility; and
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(d) the Borrower may accept in payment of the exercise price of
stock options granted to employees shares of its stock owned by the optionee.
SECTION 11.7 Limitations on Exchange and Issuance of Ownership
Interests. Issue, sell or otherwise dispose of any class or series of capital
stock or other ownership interests that, by its terms or by the terms of any
security into which it is convertible or exchangeable, is, or upon the happening
of an event or passage of time would be, (a) convertible or exchangeable into
Debt or (b) required to be redeemed or repurchased, including at the option of
the holder, in whole or in part, or has, or upon the happening of an event or
passage of time would have, a redemption or similar payment due.
SECTION 11.8 Transactions with Affiliates. Except for transactions
permitted by 11.3, 11.6 and 11.7, 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 other transaction not described in clause
(a) above with any of its Affiliates, except pursuant to the reasonable
requirements of its business and upon fair and reasonable terms that are no less
favorable to it than it would obtain in a comparable arm's length transaction
with a Person not its Affiliate.
SECTION 11.9 Certain Accounting Changes; Organizational Documents.
(a) Change its Fiscal Year end or any Fiscal Quarter end, or make
any change in its accounting treatment and reporting practices except consistent
with GAAP or (b) amend, modify or change its articles of incorporation (or
corporate charter or other similar organizational documents) or amend, modify or
change its bylaws (or other similar documents) in any manner adverse in any
respect to the rights or interests of the Lenders.
SECTION 11.10 Amendments; Payments and Prepayments of Subordinated
Debt. Amend or modify (or permit the modification or amendment of) any of the
terms or provisions of the Senior Subordinated Notes or any other Subordinated
Debt, or cancel or forgive, make any 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) the Senior Subordinated Notes or any other Subordinated Debt,
other than, so long as no Default or Event of Default shall have occurred and be
continuing or would be caused thereby, (i) regularly scheduled payments of
accrued interest on the Senior Subordinated Notes (including additional interest
required to be paid on account of a registration default arising under the
registration rights agreements in connection with the Senior Subordinated Notes
in an amount not to exceed more than one percent (1%) per year per annum) to the
extent such payments are permitted under the subordination provisions thereof,
(ii) Permitted Note Repurchases and (iii) principal payments or prepayments of
intercompany Subordinated Debt between the Borrower and the Subsidiary
Guarantors.
SECTION 11.11 Restrictive Agreements.
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(a) Negative Pledges. Enter into any Debt which (i) contains any
negative pledge on assets or any covenants more restrictive than the provisions
of Articles IX, X and XI hereof, or (ii) 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 (excluding,
solely for the purposes of this Section 11.11(a), the Senior Subordinated Notes
so long as such Senior Subordinated Notes do not restrict, limit or otherwise
encumber the ability of the Borrower or any Subsidiary to incur Liens in favor
of the Administrative Agent or any Lender under this Credit Facility to the
extent the Debt under the Credit Agreement is permitted under the Senior
Subordinated Notes).
(b) Restrictions on Dividends. Enter into or permit to exist any
agreement which impairs or limits the ability of any Subsidiary of the Borrower
to pay dividends or distributions to the Borrower.
SECTION 11.12 Nature of Business. Alter the character or conduct of the
business conducted by the Borrower and its Subsidiaries as of the Closing Date.
SECTION 11.13 Impairment of Security Interests. Take or omit to take
any action, which might or would have the result of materially impairing the
security interests in favor of the Administrative Agent with respect to the
Collateral or grant to any Person (other than the Administrative Agent for the
benefit of itself and the Lenders pursuant to the Security Documents) any
interest whatsoever in the Collateral, except for Liens permitted under Section
11.2 and asset sales permitted under Section 11.5.
SECTION 11.14 SRLS Entities Restrictions. (a) Materially change or
alter the character or conduct of business by any SRLS Entity from and after the
Closing Date, (b) except as expressly permitted under this Agreement, increase
the assets, liabilities or revenue of any SRLS Entity from and after the Closing
Date or (c) permit any SRLS Entity to create, incur, assume or suffer to exist
any Guaranty Obligations at any time.
SECTION 11.15 Franchisees Restrictions. Permit the amount of total
assets of all Franchisees that are Subsidiaries, as determined in accordance
with GAAP, to exceed $25,000,000 in the aggregate.
ARTICLE XII
DEFAULT AND REMEDIES
SECTION 12.1 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:
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(a) Default in Payment of Principal of Loans and Reimbursement
Obligations. The Borrower shall default in any payment of principal of any Loan,
Note or Reimbursement Obligation when and as due (whether at maturity, by reason
of acceleration or otherwise).
(b) Other Payment Default. The Borrower shall default in the
payment when and as due (whether at maturity, by reason of acceleration or
otherwise) of interest on any Loan, Note or Reimbursement Obligation or the
payment of any other Obligation, and such default shall continue unremedied for
five (5) Business Days.
(c) Misrepresentation. Any representation, warranty, certification
or statement of fact made or deemed to be made by or on behalf of the Borrower
or any of its Subsidiaries under this Agreement, any other Loan Document or any
document delivered in connection herewith or therewith that is subject to
materiality or Material Adverse Effect qualifications, be incorrect or
misleading in any material respect when made or deemed made, or any
representation, warranty, certification or statement of fact made or deemed made
by or on behalf of the Borrower or any Subsidiary under this Agreement, any
other Loan Document, or in any document delivered in connection herewith or
therewith that is not subject to materiality or Material Adverse Effect
qualification shall be incorrect or misleading in any material respect when made
or deemed made.
(d) Default in Performance of Certain Covenants. The Borrower
shall default in the performance or observance of any covenant or agreement
contained in Sections 8.1, 8.2, 8.5(e)(i), 9.10 9.11 or 9.12 or Articles X or XI
of this Agreement.
(e) Default in Performance of Other Covenants and Conditions. The
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
12.1) 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 Borrower by
the Administrative Agent.
(f) Hedging Agreement. The Borrower shall default in the
performance or observance of any terms, covenant, condition or agreement (after
giving effect to any applicable grace or cure period) under any Hedging
Agreement and such default causes the termination of such Hedging Agreement or
permits any counterparty to such Hedging Agreement to terminate any such Hedging
Agreement.
(g) Debt Cross-Default. The Borrower or any of its Subsidiaries
shall (i) default in the payment of any Debt (other than the Notes or any
Reimbursement Obligation) the aggregate outstanding amount of which Debt is in
excess of $5,000,000 beyond the period of grace if any, provided in the
instrument or agreement under which such Debt was created, or (ii) default in
the observance or performance of any other agreement or condition relating to
any Debt (other than the Notes or any Reimbursement Obligation) the aggregate
outstanding amount of which Debt is in excess of $5,000,000 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
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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. The 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 which default is not cured
within any applicable grace period, unless, but only as long as, the existence
of any such default is being contested by the Borrower or any such Subsidiary in
good faith by appropriate proceedings and adequate reserves in respect thereof
have been established on the books of the Borrower or such Subsidiary to the
extent required by GAAP.
(i) Change in Control. (i) Any person or group of persons (within
the meaning of Section 13(d) of the Securities Exchange Act of 1934, as amended)
shall obtain ownership or control in one or more series of transactions of more
than twenty percent (20%) of the common stock or twenty percent (20%) of the
voting power of the Borrower entitled to vote in the election of members of the
board of directors of the Borrower, (ii) there shall have occurred under any
indenture or other instrument evidencing any Debt in excess of $1,000,000 any
"change in control" (as defined in such indenture or other evidence of Debt)
obligating the Borrower to repurchase, redeem or repay all or any part of the
Debt or capital stock provided for therein, or (iii) any "Change of Control"
under any Subordinated Debt permitted under this Agreement of the Borrower or
its Subsidiaries, including, without limitation, the Senior Subordinated Notes,
or any document executed in connection therewith (any such event, a "Change in
Control").
(j) Voluntary Bankruptcy Proceeding. The Borrower or any
Subsidiary thereof 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 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 the Borrower or any Subsidiary thereof 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 the Borrower or any Subsidiary thereof 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
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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) Failure of Agreements. Any material provision of this
Agreement or any material provision of any other Loan Document shall for any
reason cease to be valid and binding on the Borrower or Subsidiary party thereto
or any such Person shall so state in writing, or any Loan Document shall for any
reason cease to create a valid and perfected first priority Lien on, or security
interest in, any of the collateral purported to be covered thereby, in each case
other than in accordance with the express terms hereof or thereof.
(m) Termination Event. The occurrence of any of the following
events: (i) the 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, the Borrower or any ERISA Affiliate is required to pay as
contributions thereto, (ii) an accumulated funding deficiency in excess of
$1,000,000 occurs or exists, whether or not waived, with respect to any Pension
Plan, (iii) a Termination Event or (iv) the Borrower or any ERISA Affiliate as
employers under one or more Multiemployer Plans makes a complete or partial
withdrawal from any such Multiemployer Plan and the plan sponsor of such
Multiemployer Plans notifies such withdrawing employer that such employer has
incurred a withdrawal liability requiring payments in an amount exceeding
$1,000,000.
(n) Judgment. A judgment or order for the payment of money which
causes the aggregate amount of all such judgments to exceed $2,500,000 in any
Fiscal Year shall be entered against the Borrower or any of its Subsidiaries by
any court and such judgment or order shall continue without discharge or stay
for a period of thirty (30) days.
(o) Environmental. Any one or more Environmental Claims shall have
been asserted against the Borrower or any of its Subsidiaries; the Borrower and
its Subsidiaries would be reasonably likely to incur liability as a result
thereof; and such liability would be reasonably likely, individually or in the
aggregate, to have a Material Adverse Effect.
SECTION 12.2 Remedies. Upon the occurrence of an Event of Default, with
the consent of the Required Lenders, the Administrative Agent may, or upon the
request of the Required Lenders, the Administrative Agent shall, by notice to
the Borrower:
(a) Acceleration; Termination of Facilities. Declare the principal
of and interest on the Loans, the Notes and the Reimbursement Obligations at the
time outstanding, and all other amounts owed to the Lenders and to the
Administrative Agent under this Agreement or any of the other Loan Documents
(including, without limitation, all L/C Obligations, whether or not the
beneficiaries of the then outstanding Letters of Credit shall have presented or
shall be entitled to present the documents required thereunder) and all other
Obligations (other than Hedging 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 Borrower
to request borrowings or Letters of Credit thereunder; provided, that upon the
occurrence of an Event of
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Default specified in Section 12.1(j) or (k), the Credit Facility shall be
automatically terminated and all Obligations (other than Hedging Obligations)
shall automatically 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 in any other Loan Document to the contrary notwithstanding.
(b) Letters of Credit. With respect to all Letters of Credit with
respect to which presentment for honor shall not have occurred at the time of an
acceleration pursuant to the preceding paragraph, the Borrower shall at such
time deposit in a cash collateral account opened by the Administrative Agent an
amount equal to the aggregate then undrawn and unexpired amount of such Letters
of Credit. Amounts held in such cash collateral account shall be applied by the
Administrative Agent to the payment of drafts drawn under such Letters of
Credit, and the unused portion thereof after all such Letters of Credit shall
have expired or been fully drawn upon, if any, shall be applied to repay the
other Obligations on a pro rata basis. After all such Letters of Credit shall
have expired or been fully drawn upon, the Reimbursement Obligation shall have
been satisfied and all other Obligations shall have been paid in full, the
balance, if any, in such cash collateral account shall be returned to the
Borrower.
(c) Rights of Collection. 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 Borrower's Obligations.
SECTION 12.3 Rights and Remedies Cumulative; Non-Waiver; etc. The
enumeration of the rights and remedies of the Administrative Agent and the
Lenders set forth in this Agreement is not intended to be exhaustive and the
exercise by the Administrative 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 other Loan Documents or that may now or hereafter exist
at law or in equity or by suit or otherwise. No delay or failure to take action
on the part of the Administrative 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 any 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 the Borrower, any of its Subsidiaries, the Administrative 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 XIII
THE ADMINISTRATIVE AGENT
SECTION 13.1 Appointment. Each of the Lenders hereby irrevocably
designates and appoints Wachovia as Administrative Agent of such Lender under
this Agreement and the other Loan Documents for the term hereof and each such
Lender irrevocably authorizes
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Wachovia, as Administrative Agent for such 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 Administrative 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 Administrative 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
Administrative Agent. Any reference to the Administrative Agent in this Article
XIII shall be deemed to refer to the Administrative Agent solely in its capacity
as Administrative Agent and not in its capacity as a Lender.
SECTION 13.2 Delegation of Duties. The Administrative 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 Administrative
Agent shall not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by the Administrative Agent with reasonable care.
SECTION 13.3 Exculpatory Provisions. Neither the Administrative 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 directly 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 the 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 Administrative 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 the Borrower or any of its
Subsidiaries to perform its obligations hereunder or thereunder. The
Administrative 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 the Borrower or any of its Subsidiaries.
SECTION 13.4 Reliance by the Administrative Agent. The Administrative
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 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
Borrower), independent accountants and other experts selected by the
Administrative Agent. The Administrative 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 14.10. The Administrative Agent shall be
fully justified in failing or refusing to take any action under this
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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 Documents, 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 Administrative 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 13.5 Notice of Default. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default unless it has received notice from a Lender or the Borrower 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 Administrative Agent
receives such a notice, it shall promptly give notice thereof to the Lenders.
The Administrative Agent shall take such action with respect to such Default or
Event of Default as shall be reasonably directed by the Required Lenders (or,
when expressly required hereby, all the Lenders); provided that unless and until
the Administrative Agent shall have received such directions, the Administrative
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, except to the extent that
other provisions of this Agreement expressly require that any such action be
taken or not be taken only with the consent and authorization or the request of
the Lenders or Required Lenders, as applicable.
SECTION 13.6 Non-Reliance on the Administrative Agent and Other
Lenders. Each Lender expressly acknowledges that neither the Administrative
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 Administrative Agent hereafter taken,
including any review of the affairs of the Borrower or any of its Subsidiaries,
shall be deemed to constitute any representation or warranty by the
Administrative Agent to any Lender. Each Lender represents to the Administrative
Agent that it has, independently and without reliance upon the Administrative
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 the Borrower and its Subsidiaries and made its own decision
to make its Loans and issue or participate in Letters of Credit hereunder and
enter into this Agreement. Each Lender also represents that it will,
independently and without reliance upon the Administrative Agent or any other
Lender, and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit 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 the Borrower and its Subsidiaries. Except for notices,
reports and other documents expressly required to be furnished to the Lenders by
the Administrative Agent hereunder or by the other Loan Documents, the
Administrative Agent shall
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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 the Borrower or any of its Subsidiaries
which may come into the possession of the Administrative Agent or any of its
respective officers, directors, employees, agents, attorneys-in-fact,
Subsidiaries or Affiliates.
SECTION 13.7 Indemnification. The Lenders agree to indemnify the
Administrative Agent in its capacity as such and (to the extent not reimbursed
by the Borrower and without limiting the obligation of the Borrower to do so),
ratably according to the respective amounts of their Revolving Credit 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 or any Reimbursement Obligation) be
imposed on, incurred by or asserted against the Administrative Agent in any way
relating to or arising out of this Agreement or the other Loan Documents, or any
documents, reports or other information provided to the Administrative Agent or
any Lender or contemplated by or referred to herein or therein or the
transactions contemplated hereby or thereby or any action taken or omitted by
the Administrative 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 Administrative
Agent's bad faith, gross negligence or willful misconduct. The agreements in
this Section 13.7 shall survive the payment of the Notes, any Reimbursement
Obligation and all other amounts payable hereunder and the termination of this
Agreement.
SECTION 13.8 The Administrative Agent in Its Individual Capacity. The
Administrative Agent and its respective Subsidiaries and Affiliates may make
loans to, accept deposits from and generally engage in any kind of business with
the Borrower as though the Administrative Agent were not the Administrative
Agent hereunder. With respect to any Loans made or renewed by it and any Note
issued to it and with respect to any Letter of Credit issued by it or
participated in by it, the Administrative 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 the Administrative Agent, and the terms
"Lender" and "Lenders" shall include the Administrative Agent in its individual
capacity.
SECTION 13.9 Resignation of the Administrative Agent; Successor
Administrative Agent. Subject to the appointment and acceptance of a successor
as provided below, the Administrative Agent may resign at any time by giving
notice thereof to the Lenders and the Borrower. Upon any such resignation, the
Required Lenders shall have the right to appoint a successor Administrative
Agent, which successor shall have minimum capital and surplus of at least
$500,000,000. If no successor Administrative Agent shall have been so appointed
by the Required Lenders and shall have accepted such appointment within thirty
(30) days after the Administrative Agent's giving of notice of resignation, then
the Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent, which successor shall have minimum capital and surplus of
at least $500,000,000. Upon the acceptance of any appointment as Administrative
Agent hereunder by a successor Administrative Agent, such successor
Administrative Agent shall thereupon succeed to and become vested with all
rights,
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powers, privileges and duties of the retiring Administrative Agent, and the
retiring Administrative Agent shall be discharged from its duties and
obligations hereunder. After any retiring Administrative Agent's resignation
hereunder as Administrative Agent, the provisions of this Section 13.9 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 Administrative Agent.
SECTION 13.10 Co-Syndication Agents and Co-Documentation Agents. The
Co-Syndication Agents and the Co-Documentation Agents, in their respective
capacities as syndication and documentation agents shall have no duties or
responsibilities under this Agreement or any other Loan Document.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices.
(a) Method of Communication. Except as otherwise provided in this
Agreement, all notices and communications hereunder shall be in writing (for
purposes hereof, the term "writing" shall include information in electronic
format such as electronic mail and internet web pages), or by telephone
subsequently confirmed in writing. Any notice shall be effective if delivered by
hand delivery or sent via electronic mail, posting on an internet web page,
telecopy, recognized overnight courier 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 electronic mail, posting on an
internet web page (provided the recipients of such notice have been made
specifically aware of the posting of such notice by any other method permitted
by this Section 14.1(a)), 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 Administrative Agent as understood by the
Administrative 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 Borrower: O'Charley's Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇, Chief
Financial Officer
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
With copies to: Bass, ▇▇▇▇▇ & ▇▇▇▇, PLC
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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Attention: J. Page Davidson
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to Wachovia as
Administrative Agent: Wachovia Bank, National Association
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇-▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Syndication Agency Services
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: Wachovia Bank, National Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, III
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to any Lender: To the address set forth on the Register.
(c) Administrative Agent's Office. The Administrative 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
Borrower and Lenders, as the Administrative Agent's Office referred to herein,
to which payments due are to be made and at which Loans will be disbursed and
Letters of Credit issued.
SECTION 14.2 Expenses; Indemnity. The Borrower will (a) pay all
out-of-pocket expenses (including, without limitation, all costs of electronic
or internet distribution of any information hereunder) of the Administrative
Agent 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
Administrative Agent and (ii) the preparation, execution and delivery of any
waiver, amendment or consent by the Administrative Agent or the Lenders relating
to this Agreement or any other Loan Document, including, without limitation,
reasonable fees and disbursements of counsel for the Administrative Agent, (b)
pay all reasonable out-of-pocket expenses of the Administrative Agent and each
Lender actually incurred in connection with the administration and enforcement
of any rights and remedies of the Administrative Agent and Lenders under the
Credit Facility, including, without limitation, in connection with any workout,
restructuring, bankruptcy or other similar proceeding, creating and perfecting
Liens in favor of Administrative Agent on behalf of Lenders pursuant to any
Security Document, enforcing any Obligations of, or collecting any payments due
from, the Borrower or any Subsidiary Guarantor by reason of an Event of Default
(including in connection with the sale of, collection from, or other realization
upon any of the
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Collateral or the enforcement of the Subsidiary Guaranty Agreement); consulting
with appraisers, accountants, engineers, attorneys and other Persons concerning
the nature, scope or value of any right or remedy of the Administrative 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 Administrative Agent and the Lenders, and their respective
parents, Subsidiaries, Affiliates, employees, agents, trustees and advisors,
officers and directors, from and against any obligations, losses, penalties,
fines, liabilities, settlements, damages, actions, judgments, suits,
disbursements, costs and expenses, suffered by any such Person in connection
with any claim (including, without limitation, any Environmental Claims),
investigation, litigation or other proceeding (whether or not the Administrative
Agent or any Lender is a party thereto) and the prosecution and defense thereof,
arising out of or in any way connected with the Loans, this Agreement, any other
Loan Document, or any documents, reports or other information provided to the
Administrative Agent or any Lender or contemplated by or referred to herein or
therein or the transactions contemplated hereby or thereby, 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 14.3 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 after the occurrence of any Event of Default and during the continuance
thereof, the Lenders and any assignee or participant of a Lender in accordance
with Section 14.10 are hereby authorized by the Borrower at any time or from
time to time, without notice to the Borrower 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 the 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 Administrative Agent shall have
declared any or all of the Obligations to be due and payable as permitted by
Section 12.2 and although such Obligations shall be contingent or unmatured.
Notwithstanding the preceding sentence, each Lender agrees to notify the
Borrower and the Administrative Agent promptly after any such set-off and
application, provided that the failure to give such notice shall not affect the
validity of such set-off and application.
SECTION 14.4 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 and all issues related to the
legality, validity or enforceability hereof and thereof shall be determined
under the laws of the State of New York (including Section5-1401 and
Section5-1402 of the General Obligations Law of the State of New York), without
regard to the conflicts of law principles thereof.
SECTION 14.5 Jurisdiction and Venue.
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(a) Jurisdiction. The Borrower hereby irrevocably consents to the
personal jurisdiction of the state and federal courts located in New York, New
York and Mecklenburg County, North Carolina (and any courts from which an appeal
from any of such courts must or may be taken), 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. The Borrower
hereby irrevocably consents to the service of a summons and complaint and other
process in any action, claim or proceeding brought by the Administrative 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 14.1. Nothing in this Section 14.5 shall affect the
right of the Administrative Agent or any Lender to serve legal process in any
other manner permitted by Applicable Law or affect the right of the
Administrative Agent or any Lender to bring any action or proceeding against the
Borrower or its properties in the courts of any other jurisdictions.
(b) Venue. The Borrower hereby irrevocably waives any objection it may
have now or in the future to the laying of venue in the aforesaid jurisdictions
in any action, claim or other proceeding arising out of or in connection with
this Agreement, any other Loan Document or the rights and obligations of the
parties hereunder or thereunder. The Borrower irrevocably waives, in connection
with such action, claim or proceeding, any plea or claim that the action, claim
or other proceeding has been brought in an inconvenient forum.
SECTION 14.6 Binding Arbitration; Waiver of Jury Trial.
(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 this Agreement or any
other Loan Document ("Disputes"), between or among parties hereto and to the
other Loan Documents 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, disputes as to whether a
matter is subject to arbitration, 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 (the "AAA") and the Federal Arbitration Act. All
arbitration hearings shall be conducted in New York, New York or 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 limitations shall apply to any Dispute. A judgment upon
the award may be entered in any court having jurisdiction. Notwithstanding
anything foregoing to the contrary, any arbitration proceeding demanded
hereunder shall begin within ninety (90) days after such demand therefor and
shall be concluded within one hundred twenty (120) days after such demand. These
time limitations may not be extended unless a party hereto shows cause for
extension and then such extension shall not exceed a total of sixty (60) days.
The panel from which all arbitrators are selected shall be comprised of licensed
attorneys selected from the
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Commercial Financial Dispute Arbitration Panel of the AAA. 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. The parties hereto do not waive any applicable Federal or state
substantive law except as provided herein. Notwithstanding the foregoing, this
paragraph shall not apply to any Hedging Agreement.
(b) Jury Trial. THE ADMINISTRATIVE AGENT, EACH LENDER AND THE BORROWER
HEREBY ACKNOWLEDGE THAT BY AGREEING TO BINDING ARBITRATION THEY HAVE IRREVOCABLY
WAIVED 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 the other Loan Documents
preserve, without diminution, certain remedies that such Persons may employ or
exercise freely, either alone, 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, as applicable: (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,
including a proceeding to confirm the sale, (ii) all rights of self help
including peaceful occupation of property and 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 in 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 14.7 Reversal of Payments. To the extent the Borrower makes a
payment or payments to the Administrative Agent for the ratable benefit of the
Lenders or the Administrative 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 received, 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 Administrative
Agent.
SECTION 14.8 Injunctive Relief; Punitive Damages.
(a) Injunctive Relief. The Borrower recognizes that, in the event the
Borrower fails to perform, observe or discharge any of its obligations or
liabilities under this Agreement, any remedy of law may prove to be inadequate
relief to the Lenders. Therefore, the Borrower agrees
82
that the Lenders, at the Lenders' option, shall be entitled to temporary and
permanent injunctive relief in any such case without the necessity of proving
actual damages.
(b) Punitive Damages. The Administrative Agent, the Lenders and the
Borrower (on behalf of itself and its 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 it may now have or that may arise in the
future in connection with any Dispute, whether such Dispute is resolved through
arbitration or judicially.
SECTION 14.9 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 the
Borrower 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 Administrative Agent to the
contrary agreed to by the Borrower, 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 the Borrower'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 Borrower and the
Required 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.
SECTION 14.10 Successors and Assigns; Participations.
(a) Benefit of Agreement. This Agreement shall be binding upon and
inure to the benefit of the Borrower, the Administrative Agent and the Lenders,
all future holders of the Notes, and their respective successors and assigns,
except that the Borrower shall not assign or transfer any of its rights or
obligations under this Agreement without the prior written consent of each
Lender.
(b) Assignment by Lenders. Each Lender may, in the ordinary course of
its business and in accordance with Applicable Law, sell or assign to any
Lender, any Affiliate of a Lender and with the consent of the Borrower (so long
as no Default or Event of Default has occurred and is continuing) and the
consent of the Administrative Agent, which consents shall not be unreasonably
withheld or delayed, assign to one or more other Eligible Assignees (any of the
foregoing assignees or purchasers, a "Purchasing Lender") all or a portion of
its interests, rights and obligations under this Agreement and the other Loan
Documents (including, without limitation, all or a portion of the Extensions of
Credit 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 the Revolving Credit Commitment of the assigning Lender's
rights and obligations under this Agreement;
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(ii) if less than all of the assigning Lender's Revolving
Credit Commitment is to be assigned, the Commitment so assigned shall not be
less than $5,000,000 with respect to the Revolving Credit Facility, unless the
Administrative Agent consents in writing to a lesser amount;
(iii) the Purchasing Lender shall have delivered to the
Administrative Agent all United States Internal Revenue Service Forms required
pursuant to Section 5.11(e) and all of the parties to each such assignment shall
execute and deliver to the Administrative Agent, for its acceptance and
recording in the Register, an Assignment and Acceptance substantially in the
form of Exhibit G attached hereto (or such other form as may be specified by the
Administrative Agent from time to time, an "Assignment and Acceptance"),
together with (to the extent requested by any Purchasing Lender) any Note or
Notes subject to such assignment;
(iv) no assignment of a Revolving Credit Commitment, or
participation in L/C Obligations or Swingline Loans shall be made without the
prior written consent of the Administrative Agent, the Swingline Lender, the
Issuing Lender and (so long as no Default or Event of Default has occurred and
is continuing) the Borrower (which consents shall not be unreasonably withheld);
(v) where consent of the Borrower to an assignment to a
Purchasing Lender is required hereunder (including consent to an assignment to
an Approved Fund), the Borrower shall be deemed to have given its consent five
(5) Business Days after the date written notice thereof has been delivered by
the assigning Lender (through the Administrative Agent) unless such consent is
expressly refused by the Borrower prior to such fifth (5th) Business Day;
(vi) such assignment shall not, without the consent of the
Borrower, require the 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
(vii) the assigning Lender shall pay to the Administrative
Agent an assignment fee of $3,500 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; and provided further that, in
any case of contemporaneous assignments by a Lender (including a group of
affiliated Lenders that are funds managed by the same investment advisor) to a
single assignee or more than one fund managed by the same investment advisor
(which funds are not then Lenders hereunder), only a single $3,500 fee shall be
payable for all such contemporaneous assignments.
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 (unless
otherwise agreed to by the Administrative Agent), (A) the Purchasing Lender
thereunder 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.
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(c) Rights and Duties Upon Assignment. By executing and delivering an
Assignment and Acceptance, the assigning Lender thereunder and the Purchasing
Lender thereunder confirm to and agree with each other and the other parties
hereto as set forth in such Assignment and Acceptance.
(d) Register. The Administrative 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 Extensions of
Credit 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 Borrower, the Administrative 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 Borrower
and by any Lender with respect to entries applicable to such 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 a Purchasing Lender together with
any Note or Notes (if applicable) subject to such assignment and (if applicable)
the written consent to such assignment, the Administrative Agent shall, if such
Assignment and Acceptance has been completed and is substantially in the form of
Exhibit G:
(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
Borrower; and
(iv) promptly deliver a copy of such Assignment and Acceptance
to the Borrower.
Within five (5) Business Days after receipt of notice, the Borrower shall
execute and deliver to the Administrative Agent, in exchange for the surrendered
Note or Notes, a new Note or Notes to the order of such Purchasing Lender (to
the extent requested thereby) in amounts equal to the Revolving Credit
Commitment assumed by it pursuant to such Assignment and Acceptance and a new
Note or Notes to the order of the assigning Lender (to the extent requested
thereby) in an amount equal to the Revolving Credit Commitment retained by it
hereunder. Such new Note or Notes shall be in an aggregate principal amount
equal to the aggregate principal amount of such surrendered Note or Notes, shall
be dated the effective date of such Assignment and Acceptance and shall
otherwise be in substantially the form of the assigned Notes delivered to the
assigning Lender. Each surrendered Note or Notes shall be canceled and returned
to the Borrower. Notwithstanding anything in this Agreement to the contrary, any
Lender which has not been issued a Note or Notes hereunder may at any time
deliver a written request for a Note or Notes to the Administrative Agent and
the Borrower. Within five (5) Business Days after receipt of notice, the
Borrower shall execute and deliver to the Administrative Agent, a Note or Notes
(as applicable) to the order of such Lender in amounts equal to the Revolving
Credit Commitment of
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such Lender. Upon receipt thereby, the Administrative Agent shall promptly
deliver such Note or Notes to such Lender.
(f) Participations. Each Lender may, without notice to or the consent
of the Borrower or the Administrative Agent, in the ordinary course of its
commercial banking business and in accordance with Applicable Law, sell
participations to one or more banks or other entities (any such bank or other
entity, a "Participant") in all or a portion of its rights and obligations under
this Agreement (including, without limitation, all or a portion of its
Extensions of Credit and the Notes held by it); provided that:
(i) each such participation shall be in an amount not less
than $5,000,000 with respect to the Revolving Credit Facility;
(ii) such Lender's obligations under this Agreement
(including, without limitation, its Revolving Credit 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 Borrower, the Administrative Agent and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement;
(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 or Reimbursement
Obligation, extend the term or increase the amount of the Revolving Credit
Commitment of such Lender, 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; and
(vii) any such disposition shall not, without the consent of
the Borrower, require the 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.
The Borrower agrees that each Participant shall be entitled to the
benefits of Section 5.7, Section 5.8, Section 5.9, Section 5.10, Section 5.11
and Section 14.3 to the same extent as if it were a Lender and had acquired its
interest by assignment pursuant to paragraph (b) of this Section 14.10; provided
that a Participant shall not be entitled to receive any greater payment under
Section 5.7, Section 5.8, Section 5.9, Section 5.10, and Section 5.11 than the
applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to
such Participant is made with the Borrower's
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prior written consent and such Participant shall have delivered to the
Administrative Agent all United States Internal Revenue Service Forms required
pursuant to Section 5.11(e).
(g) Disclosure of Information; Confidentiality. Each of the
Administrative Agent and the Lenders agrees to maintain the confidentiality of
the Information (as defined below), except that Information may be disclosed (a)
to its and its Affiliates' directors, officers, employees and agents, including
accountants, legal counsel and other advisors (it being understood that the
Persons to whom such disclosure is made will be informed of the confidential
nature of such Information and instructed to keep such Information
confidential), (b) to the extent requested by, or required to be disclosed to,
any rating agency, or regulatory or similar authority (including any
self-regulatory authority, such as the National Association of Insurance
Commissioners), (c) to the extent required by applicable laws or regulations or
by any subpoena or similar legal process, (d) to any other party hereto, (e) in
connection with the exercise of any remedies under this Agreement or under any
other Loan Document (or any Hedging Agreement with a Lender or the
Administrative Agent) or any action or proceeding relating to this Agreement or
any other Loan Document (or any Hedging Agreement with a Lender or the
Administrative Agent) or the enforcement of rights hereunder or thereunder, (f)
subject to an agreement containing provisions substantially the same as those of
this Section, to (i) any purchasing lender, proposed purchasing lender,
participant or proposed participant in connection with any assignment, proposed
assignment, participation or proposed participation or (ii) any actual or
prospective counterparty (or its advisors) to any swap or derivative transaction
relating to the Borrower and its obligations, (g) with the consent of the
Borrower, (h) to Gold Sheets and other similar bank trade publications, such
information to consist of deal terms and other information customarily found in
such publications, or (i) to the extent such Information (x) becomes publicly
available other than as a result of a breach of this Section or (y) becomes
available to the Administrative Agent or any Lender on a nonconfidential basis
from a source other than the Borrower. For purposes of this Section,
"Information" means all information received from the Borrower or its
Subsidiaries relating to the Borrower or its Subsidiaries or any of their
respective businesses, other than any such information that is available to the
Administrative Agent or any Lender on a nonconfidential basis prior to
disclosure by the Borrower or its Subsidiaries; provided that, in the case of
information received from the Borrower or its Subsidiaries after the date
hereof, such information is clearly identified at the time of delivery as
confidential. Any Person required to maintain the confidentiality of Information
as provided in this Section shall be considered to have complied with its
obligation to do so if such Person has exercised the same degree of care to
maintain the confidentiality of such Information as such Person would accord to
its own confidential information. Notwithstanding anything herein to the
contrary, "Information" shall not include, and the Borrower, its Subsidiaries,
the Administrative Agent, each Lender and the respective Affiliates of each of
the foregoing(and the respective partners, directors, officers, employees,
agents, advisors and other representatives of the aforementioned Persons), and
any other party, may disclose to any and all persons, without limitation of any
kind (a) any information with respect to the U.S. federal and state income tax
treatment of Loans and/or Letters of Credit and the other transactions
contemplated hereby and any facts that may be relevant to understanding the U.S.
federal or state income tax treatment of such Loans and/or Letters of Credit and
the other transactions ("tax structure"), which facts shall not include for this
purpose the names of the parties or any other person named herein, or
information that would permit identification of the parties or such other
persons, or any pricing terms or other nonpublic
87
business or financial information that is unrelated to such tax treatment or tax
structure, and (b) all materials of any kind (including opinions or other tax
analyses) that are provided to the Borrower, the Administrative Agent or such
Lender relating to such tax treatment or tax structure.
(h) Certain Pledges or Assignments. Any Lender may at any time pledge
or assign a security interest in all or any portion of its rights under this
Agreement or any other Loan Document to secure obligations of such Lender,
including without limitation any pledge or assignment to secure obligations to a
Federal Reserve Bank; provided that no such pledge or assignment of a security
interest shall release a Lender form any of its obligations hereunder or
substitute such pledgee or assignee for such Lender as a party hereto.
SECTION 14.11 Amendments, Waivers and Consents. Except as set forth
below or as specifically provided in any Loan Document, 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 Administrative Agent with the consent of the
Required Lenders) and delivered to the Administrative Agent and, in the case of
an amendment, signed by the Borrower; provided, that no amendment, waiver or
consent shall:
(a) (i) increase the Revolving Credit Commitment of any Lender or
increase the amount of any Revolving Credit Loan, (ii) reduce the Revolving
Credit Commitment Percentage, rate of interest or fees payable on any Revolving
Credit Loan or Reimbursement Obligation, (iii) reduce or forgive the principal
amount of any Revolving Credit Loan or the amount of any Reimbursement
Obligation, (iv) extend the originally scheduled time or times of payment of the
principal of any Revolving Credit Loan or Reimbursement Obligation or the time
or times of payment of interest on any Revolving Credit Loan or Reimbursement
Obligation or any fee or commission with respect thereto, (v) permit any
subordination of the principal or interest on any Revolving Credit Loan or
Reimbursement Obligation or (vi) extend the time of the obligation of the
Lenders holding Revolving Credit Commitments to make or issue or participate in
letters, in each case, without the written consent of each Lender holding
Revolving Credit Loans or a Revolving Credit Commitment;
(b) (i) release the Borrower from the Obligations (other than Hedging
Obligations) hereunder, (ii) permit any assignment (other than as specifically
permitted or contemplated in this Agreement) of any of the Borrower's rights and
obligations hereunder, (iii) release any material portion of the Collateral or
release any Security Document (other than asset sales permitted pursuant to
Section 11.5 (which such Collateral may be released upon the consent of the
Administrative Agent only) and as otherwise specifically permitted or
contemplated in this Agreement or the applicable Security Document), (iv)
release any Subsidiary Guarantor from its respective Guaranty Obligations, (v)
permit any Liens (other than Permitted Liens) on any Collateral secured under
this Credit Facility or (vi) amend the provisions of this Section 14.11 or the
definition of Required Lenders, in each case, without the prior written consent
of each Lender.
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In addition, no amendment, waiver or consent to the provisions of Section 5.4
with respect to the pro rata treatment of payments, or Section 5.5 with respect
to the application of proceeds, shall be made without the consent of each Lender
adversely affected thereby.
In addition, no amendment, waiver or consent shall be made to the provisions of
(a) Article XIII without the written consent of the Administrative Agent, and
(b) Article III without the written consent of the Issuing Lender.
SECTION 14.12 Performance of Duties. The Borrower's obligations under
this Agreement and each of the other Loan Documents shall be performed by the
Borrower at its sole cost and expense.
SECTION 14.13 All Powers Coupled with Interest. All powers of attorney
and other authorizations granted to the Lenders, the Administrative Agent and
any Persons designated by the Administrative 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, any of the Commitments remain in
effect or the Credit Facility has not been terminated.
SECTION 14.14 Survival of Indemnities. Notwithstanding any termination
of this Agreement, the indemnities to which the Administrative Agent and the
Lenders are entitled under the provisions of this Article XIV and any other
provision of this Agreement and the other Loan Documents shall continue in full
force and effect and shall protect the Administrative Agent and the Lenders
against events arising after such termination as well as before.
SECTION 14.15 Titles and Captions. Titles and captions of Articles,
Sections and subsections in, and the table of contents of, this Agreement are
for convenience only, and neither limit nor amplify the provisions of this
Agreement.
SECTION 14.16 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 14.17 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 14.18 Term of Agreement. This Agreement shall remain in effect
from the Closing Date through and including the date upon which all Obligations
arising hereunder or under any other Loan Document shall have been indefeasibly
and irrevocably paid and satisfied in full and all Commitments have been
terminated. The Administrative Agent is hereby permitted to release all Liens on
the Collateral in favor of the Administrative Agent, for the ratable benefit of
itself and the Lenders, upon repayment of the outstanding principal of and all
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accrued interest on the Loans, payment of all outstanding fees, expenses and
other Obligations hereunder and the termination of the Lender's Commitments. No
termination of this Agreement shall affect the rights and obligations of the
parties hereto arising prior to such termination or in respect of any provision
of this Agreement which survives such termination.
SECTION 14.19 Advice of Counsel. Each of the parties represents to each
other party hereto that it has discussed this Agreement with its counsel.
SECTION 14.20 No Strict Construction. The parties hereto have
participated jointly in the negotiation and drafting of this Agreement. In the
event an ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the parties hereto and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any provisions of this Agreement.
SECTION 14.21 Inconsistencies with Other Documents; Independent Effect
of Covenants.
(a) In the event there is a conflict or inconsistency between this
Agreement and any other Loan Document, the terms of this Agreement shall
control; provided, that any provision of the Security Documents which imposes
additional burdens on the Borrower or its Subsidiaries or further restricts the
rights of the Borrower or its Subsidiaries or gives the Administrative Agent or
Lenders additional rights shall not be deemed to be in conflict or inconsistent
with this Agreement and shall be given full force and effect.
(b) This Agreement constitutes an amendment and restatement of the
Existing Credit Agreement, as amended, effective from and after the Closing
Date. The execution and delivery of this Agreement shall not constitute a
novation of any Debt or other obligations owing to the Lenders or the
Administrative Agent under the Existing Credit Agreement based on facts or
events occurring or existing prior to the execution and delivery of this
Agreement. On the Closing Date, the credit facilities described in the Existing
Credit Agreement, as amended, shall be amended, supplemented, modified and
restated in their entirety by the facilities described herein, and all loans and
other obligations of the Borrower outstanding as of such date under the Existing
Credit Agreement, as amended, shall be deemed to be loans and obligations
outstanding under the corresponding facilities described herein, without any
further action by any Person, except that the Administrative Agent shall make
such transfers of funds as are necessary in order that the outstanding balance
of such Loans, together with any Loans funded on the Closing Date, reflect the
Commitments of the Lenders hereunder.
(c) The Borrower expressly acknowledges and agrees that each covenant
contained in Articles IX, X, or XI hereof shall be given independent effect.
Accordingly, the Borrower shall not engage in any transaction or other act
otherwise permitted under any covenant contained in Articles IX, X, or XI if,
before or after giving effect to such transaction or act, the Borrower shall or
would be in breach of any other covenant contained in Articles IX, X, or XI.
SECTION 14.22 Reaffirmation of Security Documents and Loan Documents.
The Borrower hereby reaffirms and acknowledges that (a) each of its obligations
as a Grantor under
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the applicable Security Documents, (b) each of the UCC-1 financing statements
filed pursuant to the Security Documents and (c) each other Loan Document to
which they are a party, in each case, shall continue to be in full force and
effect and are hereby in all respects ratified and reaffirmed as if fully
restated as of the date hereof by this Agreement.
[Signature pages to follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed under seal by their duly authorized officers, all as of the day and
year first written above.
O'CHARLEY'S INC., as Borrower
By: /s/ A. ▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------
Name: A. ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Chief Financial Officer,
Secretary and Treasurer
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Administrative Agent and Lender
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Associate
BANK OF AMERICA, N.A., as Co-Syndication
Agent and Lender
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Asst. Vice President
AMSOUTH BANK, as Co-Documentation Agent,
Swingline Lender and Lender
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President
SUNTRUST BANK, as Co-Documentation Agent
and Lender
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
BANK ONE, N.A., as Lender
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
REGIONS BANK, as Lender
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Assistant Vice President,
Corporate Banking, Regions
Bank
COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK B.A. "RABOBANK
INTERNATIONAL", NEW YORK BRANCH, as
Co-Syndication Agent and Lender
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Executive Director
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Executive Director
UNION PLANTERS BANK, N.A., as Lender
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President
FLEET NATIONAL BANK, as Lender
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇
Title: Vice President