EXHIBIT 4.1.1
REVOLVING CREDIT AGREEMENT
dated as of December 26, 2000
between
PANERA BREAD COMPANY
as Borrower
AND
SUNTRUST BANK
as Lender
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS; CONSTRUCTION......................................................1
Section 1.1 Definitions........................................................1
Section 1.2 Accounting Terms and Determination................................12
Section 1.3 Terms Generally...................................................13
ARTICLE II AMOUNT AND TERMS OF THE COMMITMENTS..........................................13
Section 2.1 Loans and Note....................................................13
Section 2.2 Procedure for Loans...............................................14
Section 2.3 Interest Elections................................................14
Section 2.4 Optional Reduction and Termination of Commitments.................15
Section 2.5 Repayment of Loans................................................15
Section 2.6 Optional Prepayments..............................................15
Section 2.7 Interest on Loans.................................................15
Section 2.8 Fees..............................................................16
Section 2.9 Computation of Interest and Fees..................................17
Section 2.10 Increased Costs..................................................17
Section 2.11 Funding Indemnity................................................18
Section 2.12 Payments Generally...............................................18
Section 2.13 Letters of Credit................................................18
ARTICLE III CONDITIONS PRECEDENT TO LOANS AND LETTERS OF CREDIT.........................21
Section 3.1 Conditions To Effectiveness.......................................21
Section 3.2 Each Credit Event.................................................22
ARTICLE IV REPRESENTATIONS AND WARRANTIES...............................................22
Section 4.1 Existence; Power..................................................22
Section 4.2 Organizational Power; Authorization...............................23
Section 4.3 Governmental Approvals; No Conflicts..............................23
Section 4.4 Financial Statements..............................................23
Section 4.5 Litigation........................................................23
Section 4.6 Compliance with Laws and Agreements...............................24
Section 4.7 Investment Company Act, Etc.......................................24
Section 4.8 Taxes.............................................................24
Section 4.9 Margin Regulations................................................24
Section 4.10 ERISA............................................................24
Section 4.11 Ownership of Property............................................24
Section 4.12 Disclosure.......................................................25
Section 4.13 Labor Relations..................................................25
Section 4.14 Subsidiaries.....................................................25
ARTICLE V AFFIRMATIVE COVENANTS.........................................................25
Section 5.1 Financial Statements and Other Information........................25
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Section 5.2 Notices of Material Events........................................27
Section 5.3 Existence; Conduct of Business....................................27
Section 5.4 Compliance with Laws, Etc.........................................27
Section 5.5 Payment of Obligations............................................27
Section 5.6 Books and Records.................................................28
Section 5.7 Visitation, Inspection, Etc.......................................28
Section 5.8 Maintenance of Properties; Insurance..............................28
Section 5.9 Use of Proceeds and Letters of Credit.............................28
Section 5.10 Additional Subsidiaries..........................................28
ARTICLE VI FINANCIAL COVENANTS..........................................................28
Section 6.1 Leverage Ratio....................................................29
Section 6.2 Consolidated Fixed Charge Coverage Ratio..........................29
Section 6.3 Consolidated Net Worth............................................29
ARTICLE VII NEGATIVE COVENANTS..........................................................29
Section 7.1 Indebtedness......................................................29
Section 7.2 Negative Pledge...................................................30
Section 7.3 Fundamental Changes...............................................30
Section 7.4 Investments, Loans, Etc...........................................31
Section 7.5 Restricted Payments...............................................32
Section 7.6 Sale of Assets....................................................32
Section 7.7 Transactions with Affiliates......................................32
Section 7.8 Restrictive Agreements............................................32
Section 7.9 [RESERVED]........................................................33
Section 7.10 Hedging Agreements...............................................33
Section 7.11 Amendment to Material Documents..................................33
Section 7.12 Accounting Changes...............................................33
Section 7.13 Acquisitions.....................................................33
ARTICLE VIII EVENTS OF DEFAULT..........................................................34
Section 8.1 Events of Default.................................................34
ARTICLE IX MISCELLANEOUS................................................................36
Section 9.1 Notices...........................................................36
Section 9.2 Waiver; Amendments................................................37
Section 9.3 Expenses; Indemnification.........................................38
Section 9.4 Successors and Assigns............................................39
Section 9.5 Governing Law; Jurisdiction; Consent to Service of Process........40
Section 9.6 WAIVER OF JURY TRIAL..............................................41
Section 9.7 Right of Setoff...................................................41
Section 9.8 Counterparts; Integration.........................................41
Section 9.9 Survival..........................................................41
Section 9.10 Severability.....................................................42
Section 9.11 Confidentiality..................................................42
Section 9.12 Interest Rate Limitation.........................................42
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SCHEDULES
Schedule 4.14 - Subsidiaries
Schedule 7.1 - Outstanding Indebtedness
Schedule 7.2 - Existing Liens
Schedule 7.4 - Existing Investments
EXHIBITS
Exhibit A - Revolving Credit Note
Exhibit B - Form of Subsidiary Guarantee
Agreement and Annex
Exhibit 2.2 - Notice of Borrowing
Exhibit 2.4 - Form of Continuation
Exhibit 3.1(b)(vii) - Form of Officer's Certificate
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REVOLVING CREDIT AGREEMENT
THIS REVOLVING CREDIT AGREEMENT (this "AGREEMENT") is made and entered into
as of December 26, 2000 by and between PANERA BREAD COMPANY, a Delaware
corporation (the "BORROWER"), and SUNTRUST BANK, a Georgia banking corporation
(the "Lender").
W I T N E S S E T H:
WHEREAS, the Borrower has requested that the Lender establish a $10,000,000
revolving credit facility for Borrower; and
WHEREAS, subject to the terms and conditions of this Agreement, the Lender
is willing to establish the requested revolving credit facility.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the Borrower and the Lender agree as follows:
ARTICLE I
DEFINITIONS; CONSTRUCTION
SECTION 1.1 DEFINITIONS. In addition to the other terms defined herein, the
following terms used herein shall have the meanings herein specified (to be
equally applicable to both the singular and plural forms of the terms defined):
"ADJUSTED LIBO RATE" shall mean, with respect to each Interest Period for a
Eurodollar Loan, the rate per annum obtained by (a) dividing (i) LIBOR for such
Interest Period by (ii) a percentage equal to 1.00 MINUS the Eurodollar Reserve
Percentage and (b) then adding 1.00%.
"AFFILIATE" shall mean, as to any Person, any other Person that directly,
or indirectly through one or more intermediaries, Controls, is Controlled by, or
is under common Control with, such Person.
"AVAILABILITY PERIOD" shall mean the period from the Closing Date to the
Commitment Termination Date.
"BASE RATE" shall mean the higher of (i) the per annum rate which the
Lender publicly announces from time to time to be its prime lending rate, as in
effect from time to time, and (ii) the Federal Funds Rate, as in effect from
time to time, PLUS one-half of one percent (0.50%). The Lender's prime lending
rate is a reference rate and does not necessarily represent the lowest or best
rate charged to customers. The Lender may make commercial loans or other loans
at rates of interest at, above or below the Lender's prime lending rate. Each
change in the Lender's prime lending rate shall be effective from and including
the date such change is publicly announced as being effective.
"BORROWER" shall have the meaning in the introductory paragraph hereof.
"BUSINESS DAY" shall mean (i) any day other than a Saturday, Sunday or
other day on which commercial banks in Nashville, Tennessee are authorized or
required by law to close and (ii) if such day relates to a borrowing of, a
payment or prepayment of principal or interest on, a conversion of or into, or
an Interest Period for, a Eurodollar Loan or a notice with respect to any of the
foregoing, any day on which dealings in Dollars are carried on in the London
interbank market.
"CAPITAL EXPENDITURES" shall mean for any period, without duplication, (a)
the additions to property, plant and equipment and other capital expenditures of
the Borrower and its Subsidiaries that are (or would be) set forth on a
consolidated statement of cash flows of the Borrower for such period prepared in
accordance with GAAP and (b) Capital Lease Obligations incurred by the Borrower
and its Subsidiaries during such period.
"CAPITAL LEASE OBLIGATIONS" of any Person shall mean all obligations of
such Person to pay rent or other amounts under any lease (or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
which obligations are required to be classified and accounted for as capital
leases on a balance sheet of such Person under GAAP, and the amount of such
obligations shall be the capitalized amount thereof determined in accordance
with GAAP.
"CHANGE IN CONTROL" shall mean the occurrence of one or more of the
following events: (a) any sale, lease, exchange or other transfer (in a single
transaction or a series of related transactions) of all or substantially all of
the assets of the Borrower to any Person or "group" (within the meaning of the
Securities Exchange Act of 1934 and the rules of the Securities and Exchange
Commission thereunder in effect on the date hereof), (b) the acquisition of
ownership, directly or indirectly, beneficially or of record, by any Person or
"group" (within the meaning of the Securities Exchange Act of 1934 and the rules
of the Securities and Exchange Commission thereunder as in effect on the date
hereof) of 30% or more of the outstanding shares of the voting stock of the
Borrower; or (c) occupation of a majority of the seats (other than vacant seats)
on the board of directors of the Borrower by Persons who were neither (i)
nominated by the current board of directors or (ii) appointed by directors so
nominated.
"CHANGE IN LAW" shall mean (i) the adoption of any applicable law, rule or
regulation after the date of this Agreement, (ii) any change in any applicable
law, rule or regulation, or any change in the interpretation or application
thereof, by any Governmental Authority after the date of this Agreement, or
(iii) compliance by the Lender with any request, guideline or directive (whether
or not having the force of law) of any Governmental Authority made or issued
after the date of this Agreement.
"CLOSING DATE" shall mean the date on which the conditions precedent set
forth in SECTION 3.1 and SECTION 3.2 have been satisfied or waived in accordance
with SECTION 9.2.
"CODE" shall mean the Internal Revenue Code of 1986, as amended and in
effect from time to time.
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"COMMITMENT" shall mean the obligation of the Lender to make Loans to the
Borrower in an aggregate principal amount not exceeding $10,000,000.00.
"COMMITMENT TERMINATION DATE" shall mean the earliest of (i) December 31,
2003, (ii) the date on which the Commitment is terminated pursuant to SECTION
2.4 and (iii) the date on which all amounts outstanding under this Agreement
have been declared or have automatically become due and payable (whether by
acceleration or otherwise).
"CONSOLIDATED CASH FLOW" shall mean consolidated EBITDAR LESS Maintenance
Capital Expenditures.
"CONSOLIDATED EBITDA" shall mean, for the Borrower and its Subsidiaries for
any period, an amount equal to the sum of (a) Consolidated Net Income for such
period PLUS (b) to the extent deducted in determining Consolidated Net Income
for such period, (i) Consolidated Interest Expense, (ii) income tax expense,
(iii) depreciation and amortization and (iv) all other non-cash charges,
determined on a consolidated basis in accordance with GAAP in each case for such
period.
"CONSOLIDATED EBITDAR" shall mean, for the Borrower and its Subsidiaries
for any period, an amount equal to the sum of (a) Consolidated EBITDA and (b)
Consolidated Lease Expense.
"CONSOLIDATED FIXED CHARGE COVERAGE RATIO" shall mean, for any period of
four consecutive fiscal quarters of the Borrower and its Subsidiaries, the ratio
of (a) Consolidated Cash Flow to (b) Consolidated Fixed Charges for such period.
"CONSOLIDATED FIXED CHARGES" shall mean, for the Borrower and its
Subsidiaries for any period, the sum (without duplication) of (a) Consolidated
Interest Expense for such period, (b) scheduled principal payments made on
Consolidated Long Term Debt during such period, (c) scheduled payments with
respect to Capital Lease Obligations; (d) income tax expense during such period,
(e) Restricted Payments paid during such period and (f) Consolidated Lease
Expense for such period.
"CONSOLIDATED INTEREST EXPENSE" shall mean, for the Borrower and its
Subsidiaries for any period determined on a consolidated basis in accordance
with GAAP, the sum of (i) total cash interest expense, including without
limitation the interest component of any payments in respect of Capital Leases
Obligations capitalized or expensed during such period (whether or not actually
paid during such period) PLUS (ii) the net amount payable (or MINUS the net
amount receivable) under Hedging Agreements during such period (whether or not
actually paid or received during such period).
"CONSOLIDATED LEASE ADJUSTED DEBT" shall mean, as of any date of
determination, the sum of (i) all Indebtedness of the Borrower and its
Subsidiaries for borrowed money; (ii) all Capital Lease Obligations of the
Borrower and its Subsidiaries; (iii) all Guarantees of Borrower and its
Subsidiaries (excluding all guaranteed operating leases associated with Au Bon
Pain as lessee); and (iv) the net present value (calculated using a discount
rate of 10%) of future minimum commitments under all operating leases of
Borrower and its Subsidiaries.
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"CONSOLIDATED LEASE EXPENSE" shall mean, for any period, the aggregate
amount of fixed and contingent rentals payable by the Borrower and its
Subsidiaries with respect to leases of real and personal property (excluding
Capital Lease Obligations) determined on a consolidated basis in accordance with
GAAP for such period.
"CONSOLIDATED LEVERAGE RATIO" shall mean, as of any date of determination
with respect to the Borrower and its Subsidiaries, the ratio of (i) Consolidated
Lease Adjusted Debt as of such date to (ii) Consolidated EBITDAR as of such
date.
"CONSOLIDATED LONG TERM DEBT" shall mean Indebtedness for borrowed money
which has a maturity date of one year or longer from its initial date.
"CONSOLIDATED NET INCOME" shall mean, for any period, the net income (or
loss) of the Borrower and its Subsidiaries for such period determined on a
consolidated basis in accordance with GAAP, but excluding therefrom (to the
extent otherwise included therein) (i) any extraordinary gains or losses, (ii)
any gains attributable to write-ups of assets and (iii) any equity interest of
the Borrower or any Subsidiary of the Borrower in the unremitted earnings of any
Person that is not a Subsidiary and (iv) any income (or loss) of any Person
accrued prior to the date it becomes a Subsidiary or is merged into or
consolidated with the Borrower or any Subsidiary on the date that such Person's
assets are acquired by the Borrower or any Subsidiary.
"CONSOLIDATED NET WORTH" shall mean, as of any date, (i) the total assets
of the Borrower and its Subsidiaries that would be reflected on the Borrower's
consolidated balance sheet as of such date prepared in accordance with GAAP,
after eliminating all amounts properly attributable to minority interests, if
any, in the stock and surplus of Subsidiaries, MINUS the sum of (i) the total
liabilities of the Borrower and its Subsidiaries that would be reflected on the
Borrower's consolidated balance sheet as of such date prepared in accordance
with GAAP and (ii) the amount of any write-up in the book value of any assets
resulting from a revaluation thereof or any write-up in excess of the cost of
such assets acquired reflected on the consolidated balance sheet of the Borrower
as of such date prepared in accordance with GAAP.
"CONTROL" shall mean the power, directly or indirectly, either to (i) vote
50% or more of securities having ordinary voting power for the election of
directors (or persons performing similar functions) of a Person or (ii) direct
or cause the direction of the management and policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise. The
terms "CONTROLLING", "CONTROLLED BY", and "UNDER COMMON CONTROL WITH" have
meanings correlative thereto.
"DEFAULT" shall mean any condition or event that, with the giving of notice
or the lapse of time or both, would constitute an Event of Default.
"DEFAULT INTEREST" shall have the meaning set forth in SECTION 2.7(B).
"DOLLAR(S)" and the sign "$" shall mean lawful money of the United States
of America.
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"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor statute.
"ERISA AFFILIATE" shall mean any trade or business (whether or not
incorporated), which, together with the Borrower, is treated as a single
employer under Section 414(b) or (c) of the Code or, solely for the purposes of
Section 302 of ERISA and Section 412 of the Code, is treated as a single
employer under Section 414 of the Code.
"ERISA EVENT" shall mean (a) any "reportable event", as defined in Section
4043 of ERISA or the regulations issued thereunder with respect to a Plan (other
than an event for which the 30-day notice period is waived); (b) the existence
with respect to any Plan of an "accumulated funding deficiency" (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by the Borrower or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan;
(e) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan
administrator appointed by the PBGC of any notice relating to an intention to
terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f)
the incurrence by the Borrower or any of its ERISA Affiliates of any liability
with respect to the withdrawal or partial withdrawal from any Plan or
Multiemployer Plan; or (g) the receipt by the Borrower or any ERISA Affiliate of
any notice, or the receipt by any Multiemployer Plan from the Borrower or any
ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability
or a determination that a Multiemployer Plan is, or is expected to be, insolvent
or in reorganization, within the meaning of Title IV of ERISA.
"EURODOLLAR" when used in reference to any Loan, refers to whether such
Loan bears interest at a rate determined by reference to the Adjusted LIBO Rate.
"EURODOLLAR RESERVE PERCENTAGE" shall mean the aggregate of the maximum
reserve percentages (including, without limitation, any emergency, supplemental,
special or other marginal reserves) expressed as a decimal (rounded upwards to
the next 1/100th of 1%) in effect on any day to which the Lender is subject with
respect to the Adjusted LIBO Rate pursuant to regulations issued by the Board of
Governors of the Federal Reserve System (or any Governmental Authority
succeeding to any of its principal functions) with respect to eurocurrency
funding (currently referred to as "eurocurrency liabilities" under Regulation
D). Eurodollar Loans shall be deemed to constitute eurocurrency funding and to
be subject to such reserve requirements without benefit of or credit for
proration, exemptions or offsets that may be available from time to time to the
Lender under Regulation D. The Eurodollar Reserve Percentage shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.
"EVENT OF DEFAULT" shall have the meaning provided in Article VIII.
5
"FEDERAL FUNDS RATE" shall mean, for any day, the rate per annum (rounded
upwards, if necessary, to the next 1/100th of 1%) equal to the weighted average
of the rates on overnight Federal funds transactions with member banks of the
Federal Reserve System arranged by Federal funds brokers, as published by the
Federal Reserve Bank of New York on the next succeeding Business Day or if such
rate is not so published for any Business Day, the Federal Funds Rate for such
day shall be the average rounded upwards, if necessary, to the next 1/100th of
1% of the quotations for such day on such transactions received by the Lender
from three Federal funds brokers of recognized standing selected by the Lender.
"GAAP" shall mean generally accepted accounting principles in the United
States applied on a consistent basis and subject to the terms of SECTION 1.2.
"GOVERNMENTAL AUTHORITY" shall mean the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
"GUARANTEE" of or by any Person (the "GUARANTOR") shall mean any
obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of guaranteeing any Indebtedness or other obligation of any
other Person (the "PRIMARY OBLIGOR") in any manner, whether directly or
indirectly and including any obligation, direct or indirect, of the guarantor
(a) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation or to purchase (or to advance or
supply funds for the purchase of) any security for the payment thereof, (b) to
purchase or lease property, securities or services for the purpose of assuring
the owner of such Indebtedness or other obligation of the payment thereof, (c)
to maintain working capital, equity capital or any other financial statement
condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other obligation or (d) as an account party
in respect of any letter of credit or letter of guaranty issued in support of
such Indebtedness or obligation; PROVIDED, that the term "Guarantee" shall not
include endorsements for collection or deposits in the ordinary course of
business. The amount of any Guarantee shall be deemed to be an amount equal to
the stated or determinable amount of the primary obligation in respect of which
Guarantee is made or, if not so stated or determinable, the maximum reasonably
anticipated liability in respect thereof (assuming such Person is required to
perform thereunder) as determined by such Person in good faith. The term
"Guarantee" used as a verb has a corresponding meaning.
"HEDGING AGREEMENTS" shall mean interest rate swap, cap or collar
agreements, interest rate future or option contracts, currency swap agreements,
currency future or option contracts, commodity agreements and other similar
agreements or arrangements designed to protect against fluctuations in interest
rates, currency values or commodity values.
"INDEBTEDNESS" of any Person shall mean, without duplication (i) all
obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments, (iii)
all obligations of such Person in respect of the deferred purchase price of
property or services (other than trade payables incurred in the ordinary course
of business; PROVIDED, that for purposes of SECTION 8.1(F), trade
6
payables overdue by more than 120 days shall be included in this definition
except to the extent that any of such trade payables are being disputed in good
faith and by appropriate measures), (iv) all obligations of such Person under
any conditional sale or other title retention agreement(s) relating to property
acquired by such Person, (v) all Capital Lease Obligations of such Person, (vi)
all obligations, contingent or otherwise, of such Person in respect of letters
of credit, acceptances or similar extensions of credit, (vii) all Guarantees of
such Person of the type of Indebtedness described in clauses (i) through (vi)
above, (viii) all Indebtedness of a third party secured by any Lien on property
owned by such Person, whether or not such Indebtedness has been assumed by such
Person, (ix) all obligations of such Person, contingent or otherwise, to
purchase, redeem, retire or otherwise acquire for value any common stock of such
Person, and (x) Off-Balance Sheet Liabilities. The Indebtedness of any Person
shall include the Indebtedness of any partnership or joint venture in which such
Person is a general partner or a joint venturer, except to the extent that the
terms of such Indebtedness provide that such Person is not liable therefor.
"INTEREST PERIOD" shall mean, with respect to any Eurodollar Loan, a period
of one, two, three or six months, as the Borrower may request; PROVIDED, that:
(i) the initial Interest Period for any such Loan shall commence on
the date of such Loan and each Interest Period occurring thereafter in
respect of such Loan shall commence on the day on which the next preceding
Interest Period expires;
(ii) if any Interest Period would otherwise end on a day other than a
Business Day, such Interest Period shall be extended to the next succeeding
Business Day, unless such Business Day falls in another calendar month, in
which case such Interest Period would end on the next preceding Business
Day;
(iii) any Interest Period which 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 such calendar month; and
(iv) no Interest Period may extend beyond the Commitment Termination
Date.
"LC COMMITMENT" shall mean that portion of the Commitment that may be used
by the Borrower for the issuance of Letters of Credit in an aggregate face
amount not to exceed $5,000,000.
"LC DISBURSEMENT" shall mean a payment made by the Lender pursuant to a
Letter of Credit.
"LC DOCUMENTS" shall mean the Letters of Credit and all applications,
agreements and instruments relating to the Letters of Credit.
"LC EXPOSURE" shall mean, at any time, the sum of (i) the aggregate undrawn
amount of all outstanding Letters of Credit at such time, PLUS (ii) the
aggregate amount of all LC Disbursements that have not been reimbursed by or on
behalf of the Borrower at such time.
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"LETTER OF CREDIT" shall mean any letter of credit issued pursuant to
SECTION 2.13 by the Lender for the account of the Borrower pursuant to the LC
Commitment.
"LIBOR" shall mean, for any applicable Interest Period with respect to any
Eurodollar Loan, the rate per annum for deposits in Dollars for a period equal
to such Interest Period appearing on the display designated as Page 3750 on the
Dow ▇▇▇▇▇ Markets Service (or such other page on that service or such other
service designated by the British Banker's Association for the display of such
Association's Interest Settlement Rates for Dollar deposits) as of 11:00 a.m.
(London, England time) on the day that is two Business Days prior to the first
day of the Interest Period or if such Page 3750 is unavailable for any reason at
such time, the rate which appears on the Reuters Screen ISDA Page as of such
date and such time; PROVIDED, that if the Lender determines that the relevant
foregoing sources are unavailable for the relevant Interest Period, LIBOR shall
mean the rate of interest determined by the Lender to be the average (rounded
upward, if necessary, to the nearest 1/100th of 1%) of the rates per annum at
which deposits in Dollars are offered to the Lender two (2) Business Days
preceding the first day of such Interest Period by leading banks in the London
interbank market as of 10:00 a. m. for delivery on the first day of such
Interest Period, for the number of days comprised therein and in an amount
comparable to the amount of the Eurodollar Loan of the Lender.
"LIEN" shall mean any mortgage, pledge, security interest, lien (statutory
or otherwise), charge, encumbrance, hypothecation, assignment, deposit
arrangement, or other arrangement having the practical effect of the foregoing
or any preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including any conditional sale or
other title retention agreement and any capital lease having the same economic
effect as any of the foregoing).
"LOAN DOCUMENTS" shall mean, collectively, this Agreement, the Note, the LC
Documents, the Notice of Borrowing, the Subsidiary Guarantee Agreement, and any
and all other instruments, agreements, documents and writings executed in
connection with any of the foregoing.
"LOAN PARTIES" shall mean the Borrower and the Subsidiary Loan Parties.
"LOAN" shall mean a loan made by the Lender to the Borrower under its
Commitment.
"MAINTENANCE CAPITAL EXPENDITURES" shall mean Capital Expenditures for
maintaining existing assets of Borrower and it Subsidiaries.
"MATERIAL ADVERSE EFFECT" shall mean, with respect to any event, act,
condition or occurrence of whatever nature (including any adverse determination
in any litigation, arbitration, or governmental investigation or proceeding),
whether singly or in conjunction with any other event or events, act or acts,
condition or conditions, occurrence or occurrences whether or not related, a
material adverse change in, or a material adverse
8
effect on, (i) the business, results of operations, financial condition, assets,
liabilities or prospects of the Borrower and of the Borrower and its
Subsidiaries taken as a whole, (ii) the ability of the Loan Parties to perform
any of their respective obligations under the Loan Documents, (iii) the rights
and remedies of the Lender under any of the Loan Documents or (iv) the legality,
validity or enforceability of any of the Loan Documents.
"MATERIAL INDEBTEDNESS" shall mean Indebtedness (other than the Loans and
Letters of Credit) or obligations in respect of one or more Hedging Agreements,
of any one or more of the Borrower and the Subsidiaries in an aggregate
principal amount exceeding $2,000,000. For purposes of determining Material
Indebtedness, the "principal amount" of the obligations of the Borrower or any
Subsidiary in respect to any Hedging Agreement at any time shall be the maximum
aggregate amount (giving effect to any netting agreements) that the Borrower or
such Subsidiary would be required to pay if such Hedging Agreement were
terminated at such time.
"MOODY'S" shall mean ▇▇▇▇▇'▇ Investors Service, Inc.
"MULTIEMPLOYER PLAN" shall have the meaning set forth in Section 4001(a)(3)
of ERISA.
"NOTE" shall mean a revolving credit note of the Borrower payable to the
order of the Lender in the principal amount of the Commitment, in substantially
the form of EXHIBIT A.
"NOTICE OF CONTINUATION" shall mean the notice given by the Borrower to the
Lender in respect of the continuation of an outstanding Loan as provided in
SECTION 2.3(B) hereof.
"NOTICE OF BORROWING" shall have the meaning as set forth in SECTION 2.2.
"OBLIGATIONS" shall mean all amounts owing by the Borrower to the Lender
pursuant to or in connection with this Agreement or any other Loan Document,
including without limitation, all principal, interest (including any interest
accruing after the filing of any petition in bankruptcy or the commencement of
any insolvency, reorganization or like proceeding relating to the Borrower,
whether or not a claim for post-filing or post-petition interest is allowed in
such proceeding), all reimbursement obligations, fees, expenses, indemnification
and reimbursement payments, costs and expenses (including all fees and expenses
of counsel to the Lender incurred pursuant to this Agreement or any other Loan
Document), whether direct or indirect, absolute or contingent, liquidated or
unliquidated, now existing or hereafter arising hereunder or thereunder,
together with all renewals, extensions, modifications or refinancings thereof.
"OFF-BALANCE SHEET LIABILITIES" of any Person shall mean (i) any repurchase
obligation or liability of such Person with respect to accounts or notes
receivable sold by such Person, (ii) any liability of such Person under any sale
and leaseback transactions which do not create a liability on the balance sheet
of such Person, (iii) any liability of such Person under any so-called
"synthetic" lease transaction or (iv) any obligation arising with respect to any
other transaction which is the functional equivalent of or takes the place of
borrowing but which does not constitute a liability on the balance sheet of such
Person.
9
"PARTICIPANT" shall have the meaning set forth in SECTION 9.4(C).
"PAYMENT OFFICE" shall mean the office of the Lender located at ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or such other location as to which the
Lender shall have given written notice to the Borrower.
"PBGC" shall mean the Pension Benefit Guaranty Corporation referred to and
defined in ERISA, and any successor entity performing similar functions.
"PERMITTED ENCUMBRANCES" shall mean
(i) Liens imposed by law for taxes not yet due or which are being
contested in good faith by appropriate proceedings and with respect to
which adequate reserves are being maintained in accordance with GAAP;
(ii) statutory Liens of landlords and Liens of carriers, warehousemen,
mechanics, materialmen and other Liens imposed by law created in the
ordinary course of business for amounts not yet due or which are being
contested in good faith by appropriate proceedings and with respect to
which adequate reserves are being maintained in accordance with GAAP;
(iii) pledges and deposits made in the ordinary course of business in
compliance with workers' compensation, unemployment insurance and other
social security laws or regulations;
(iv) deposits to secure the performance of bids, trade contracts,
leases, statutory obligations, surety and appeal bonds, performance bonds
and other obligations of a like nature, in each case in the ordinary course
of business;
(v) judgment and attachment liens not giving rise to an Event of
Default or Liens created by or existing from any litigation or legal
proceeding that are currently being contested in good faith by appropriate
proceedings and with respect to which adequate reserves are being
maintained in accordance with GAAP; and
(vi) easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary
course of business that do not secure any monetary obligations and do not
materially detract from the value of the affected property or materially
interfere with the ordinary conduct of business of the Borrower and its
Subsidiaries taken as a whole;
PROVIDED, that the term "Permitted Encumbrances" shall not include any Lien
securing Indebtedness.
"PERMITTED INVESTMENTS" shall mean:
(i) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States (or
by any agency thereof to the extent such obligations are backed by the full
faith and credit of the United States), in each case maturing within one
year from the date of acquisition thereof;
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(ii) commercial paper having the highest rating, at the time of
acquisition thereof, of S&P or Moody's and in either case maturing within
six months from the date of acquisition thereof;
(iii) certificates of deposit, bankers' acceptances and time deposits
maturing within 180 days of the date of acquisition thereof issued or
guaranteed by or placed with, and money market deposit accounts issued or
offered by, any domestic office of any commercial bank organized under the
laws of the United States or any state thereof which has a combined capital
and surplus and undivided profits of not less than $500,000,000;
(iv) fully collateralized repurchase agreements with a term of not
more than 30 days for securities described in clause (i) above and entered
into with a financial institution satisfying the criteria described in
clause (iii) above; and
(v) mutual funds investing solely in any one or more of the Permitted
Investments described in clauses (i) through (iv) above.
"PERSON" shall mean any individual, partnership, firm, corporation,
association, joint venture, limited liability company, trust or other entity, or
any Governmental Authority.
"PLAN" means any employee pension benefit plan (other than a Multiemployer
Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code
or Section 302 of ERISA, and in respect of which the Borrower or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4069 of
ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA.
"REGULATION D" shall mean Regulation D of the Board of Governors of the
Federal Reserve System, as the same may be in effect from time to time, and any
successor regulations.
"RELATED PARTIES" shall mean, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.
"RESPONSIBLE OFFICER" shall mean any of the president, the chief executive
officer, the chief operating officer, the chief financial officer, the treasurer
or a vice president of the Borrower or such other representative of the Borrower
as may be designated in writing by any one of the foregoing with the consent of
the Lender; and, with respect to the financial covenants only, the chief
financial officer or the treasurer of the Borrower.
"RESTRICTED PAYMENT" shall have the meaning set forth in SECTION 7.5.
"S&P" shall mean Standard & Poor's.
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"SUBSIDIARY" shall mean, with respect to any Person (the "PARENT"), any
corporation, partnership, joint venture, limited liability company, association
or other entity the accounts of which would be consolidated with those of the
parent in the parent's consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, as well as any
other corporation, partnership, joint venture, limited liability company,
association or other entity (i) of which securities or other ownership interests
representing more than 50% of the equity or more than 50% of the ordinary voting
power, or in the case of a partnership, more than 50% of the general partnership
interests are, as of such date, owned, Controlled or held, or (ii) that is, as
of such date, otherwise Controlled, by the parent or one or more subsidiaries of
the parent or by the parent and one or more subsidiaries of the parent. Unless
otherwise indicated, all references to "Subsidiary" hereunder shall mean a
Subsidiary of the Borrower.
"SUBSIDIARY GUARANTEE AGREEMENT" shall mean the Subsidiary Guarantee
Agreement, substantially in the form of EXHIBIT B, made by the Subsidiary Loan
Parties in favor of the Lender.
"SUBSIDIARY LOAN PARTY" shall mean each and every Subsidiary that is
required to execute the Subsidiary Guarantee Agreement under SECTION 5.10
hereof.
"TAXES" shall mean any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"WITHDRAWAL LIABILITY" shall mean liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.2 ACCOUNTING TERMS AND DETERMINATION. Unless otherwise defined or
specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all financial statements
required to be delivered hereunder shall be prepared, in accordance with GAAP as
in effect from time to time, applied on a basis consistent (except for such
changes approved by the Borrower's independent public accountants) with the most
recent audited consolidated financial statement of the Borrower delivered
pursuant to SECTION 5.1(A); PROVIDED, that if the Borrower notifies the Lender
that the Borrower wishes to amend any covenant in Article VI to eliminate the
effect of any change in GAAP on the operation of such covenant (or if the Lender
notifies the Borrower that it wishes to amend Article VI for such purpose), then
the Borrower's compliance with such covenant shall be determined on the basis of
GAAP in effect immediately before the relevant change in GAAP became effective,
until either such notice is withdrawn or such covenant is amended in a manner
satisfactory to the Borrower and the Lender.
SECTION 1.3 TERMS GENERALLY. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phase "without limitation". The word "will"
shall be construed to have the same meaning and
12
effect as the word "shall". In the computation of periods of time from a
specified date to a later specified date, the word "from" means "from and
including" and the word "to" means "to but excluding". Unless the context
requires otherwise (i) any definition of or reference to any agreement,
instrument or other document herein shall be construed as referring to such
agreement, instrument or other document as it was originally executed or as it
may from time to time be amended, supplemented or otherwise modified (subject to
any restrictions on such amendments, supplements or modifications set forth
herein), (ii) any reference herein to any Person shall be construed to include
such Person's successors and permitted assigns, (iii) the words "hereof",
"herein" and "hereunder" and words of similar import shall be construed to refer
to this Agreement as a whole and not to any particular provision hereof, (iv)
all references to Articles, Sections, Exhibits and Schedules shall be construed
to refer to Articles, Sections, Exhibits and Schedules to this Agreement and (v)
all references to a specific time shall be construed to refer to the time in the
city and state of the Lender's principal office, unless otherwise indicated.
ARTICLE II
AMOUNT AND TERMS OF THE COMMITMENTS
SECTION 2.1 LOANS AND NOTE.
(a) Subject to the terms and conditions set forth herein, the Lender
agrees to make Loans to the Borrower, from time to time during the
Availability Period, in an aggregate principal amount outstanding at any
time that will not result in the sum of the principal amount of Loans then
outstanding plus the outstanding LC Exposure to exceed the Commitment.
During the Availability Period, the Borrower shall be entitled to borrow,
prepay and reborrow Loans in accordance with the terms and conditions of
this Agreement; PROVIDED, that the Borrower may not borrow or reborrow
should there exist a Default or Event of Default.
(b) The Borrower's obligation to pay the principal of, and interest
on, the Loans shall be evidenced by the records of the Bank and by the
Note. The entries made in such records and/or on the schedule annexed to
the Note shall be PRIMA FACIE evidence of the existence and amounts of the
obligations of the Borrower therein recorded; PROVIDED, that the failure or
delay of the Lender in maintaining or making entries into any such record
or on such schedule or any error therein shall not in any manner affect the
obligation of the Borrower to repay the Loans (both principal and unpaid
accrued interest) in accordance with the terms of this Agreement.
SECTION 2.2 PROCEDURE FOR LOANS. The Borrower shall give the Lender written
notice (or telephonic notice promptly confirmed in writing) of each Loan
substantially in the form of Exhibit 2.2 (a "NOTICE OF BORROWING") prior to
11:00 a.m. two (2) Business Days prior to the requested date of each Loan. Each
Notice of Borrowing shall be irrevocable and shall specify: (i) the principal
amount of the Loan, (ii) the proposed date of such Loan (which shall be a
Business Day), and (iii) the duration of the initial Interest Period applicable
thereto (subject to the provisions of the definition of Interest Period). The
aggregate
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principal amount of each Loan shall be not less than $100,000 or a larger
multiple of $100,000, or in such lesser amounts equal to the amount of the
unused Commitment. Upon the satisfaction of the applicable conditions set forth
in Article III hereof, the Lender will make the proceeds of each Loan available
to the Borrower at the Payment Office on the date specified in the applicable
Notice of Borrowing by crediting an account maintained by the Borrower with the
Lender or at the Borrower's option, by effecting a wire transfer of such amount
to an account designated by the Borrower to the Lender.
SECTION 2.3 INTEREST ELECTIONS.
(a) Each Loan shall be a Eurodollar Loan and shall have an initial
Interest Period as specified in the applicable Notice of Borrowing.
Thereafter, the Borrower may elect to continue the Interest Period for any
Eurodollar Loan, all as provided in this Section.
(b) To make an election pursuant to this Section, the Borrower shall
give the Lender prior written notice (or telephonic notice promptly
confirmed in writing) of each Eurodollar Loan (a "NOTICE OF CONTINUATION")
that is to be continued prior to 11:00 a.m. two (2) Business Days prior to
a continuation of the Loan. Each such Notice of Continuation shall be
irrevocable and shall specify (i) the Loan to which such Notice of
Continuation applies; (ii) the effective date of the election made pursuant
to such Notice of Continuation, which shall be a Business Day; and (iii)
the Interest Period applicable thereto after giving effect to such
election, which shall be a period contemplated by the definition of
"Interest Period."
(c) If, on the expiration of any Interest Period in respect of any
Eurodollar Loan, the Borrower shall have failed to deliver a Notice of
Continuation, then, unless such Loan is repaid as provided herein, the
Borrower shall be deemed to have elected to convert such Loan to a
Eurodollar Loan with an Interest Period of one month. No Loan may be
continued as a Eurodollar Loan if a Default or an Event of Default exists,
unless the Lender shall have otherwise consented in writing.
SECTION 2.4 OPTIONAL REDUCTION AND TERMINATION OF COMMITMENTS.
(a) Unless previously terminated, the Commitment shall terminate on
the Commitment Termination Date.
(b) Upon at least two (2) Business Days' prior written notice (or
telephonic notice promptly confirmed in writing) to the Lender (which
notice shall be irrevocable), the Borrower may reduce the Commitment in
part or terminate the Commitment in whole; PROVIDED, that (i) any partial
reduction pursuant to this SECTION 2.4 shall be in an amount of at least
$100,000 and any larger multiple of $100,000, and (ii) no such reduction
shall be permitted which would reduce the Commitment (after giving effect
thereto and any concurrent prepayments made under SECTION 2.6) to an amount
less than the outstanding Loans PLUS the outstanding LC Exposure.
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SECTION 2.5 REPAYMENT OF LOANS. The outstanding principal amount of all
Loans shall be due and payable (together with accrued and unpaid interest
thereon) on the Commitment Termination Date.
SECTION 2.6 OPTIONAL PREPAYMENTS. The Borrower shall have the right at any
time and from time to time to prepay any Loan, in whole or in part, without
premium or penalty, by giving irrevocable written notice (or telephonic notice
promptly confirmed in writing) to the Lender no later than 11:00 a.m. not less
than two (2) Business Days prior to any such prepayment. Each such notice shall
be irrevocable and shall specify the proposed date of such prepayment and the
principal amount of each Loan or portion thereof to be prepaid. Such amount
shall be due and payable on the date designated in such notice, together with
accrued interest to such date on the amount so prepaid in accordance with
SECTION 2.7(A); PROVIDED, that if a Eurodollar Loan is prepaid on a date other
than the last day of an Interest Period applicable thereto, the Borrower shall
also pay all amounts required pursuant to SECTION 2.11. Each partial prepayment
of any Loan shall be in an amount that would be permitted in the case of an
advance of a Loan pursuant to SECTION 2.2.
SECTION 2.7 INTEREST ON LOANS.
(a) The Borrower shall pay interest on each Eurodollar Loan at the
Adjusted LIBO Rate for the applicable Interest Period in effect for such
Loan.
(b) While an Event of Default exists or after acceleration, at the
option of the Lender, the Borrower shall pay interest ("DEFAULT INTEREST")
with respect to all Eurodollar Loans at the rate otherwise applicable for
the then-current Interest Period PLUS an additional 2% per annum until the
last day of such Interest Period, and thereafter, and with respect to all
Loans and all other Obligations hereunder (other than Loans), at the Base
Rate, PLUS an additional 2% per annum.
(c) Interest on the principal amount of all Loans shall accrue from
and including the date such Loans are made to but excluding the date of any
repayment thereof. Interest on all outstanding Eurodollar Loans shall be
payable on the last day of each Interest Period applicable thereto, and, in
the case of any Eurodollar Loans having an Interest Period in excess of
three months, on each day which occurs every three months after the initial
date of such Interest Period, and on the Commitment Termination Date. All
Default Interest shall be payable on demand.
(d) The Lender shall determine each interest rate applicable to the
Loans hereunder and shall promptly notify the Borrower of such rate in
writing (or by telephone, promptly confirmed in writing). Any such
determination shall be conclusive and binding for all purposes, absent
manifest error.
SECTION 2.8 FEES.
(a) COMMITMENT FEE. The Borrower agrees to pay to the Lender a
commitment fee, which shall accrue at a rate equal to 0.225% per annum on
the daily amount of the unused Commitment during the Availability Period;
PROVIDED, HOWEVER, that if the Lender continues to have any Loans or LC
Exposure
15
outstanding after the Commitment Termination Date, then the commitment fee
shall continue to accrue on the amount of the Lender's unused Commitment
from and after the Commitment Termination Date to the date that all of the
Lender's outstanding Loans and/or LC Exposure have been paid in full.
(b) UTILIZATION FEE. If, during any calendar month, the average daily
outstanding Loans shall exceed 50% of the Commitment, the Borrower shall
pay to Lender a utilization fee, which shall accrue at a rate equal to
0.25% on the amount of such average daily outstanding Loan amount for such
month.
(c) LETTER OF CREDIT FEES. The Borrower agrees to pay to the Lender a
letter of credit fee which shall accrue at one percent (1%) per annum on
the average daily amount of the Lender's LC Exposure (excluding any portion
thereof attributable to unreimbursed LC Disbursements) attributable to such
Letter of Credit during the period from and including the date of issuance
of such Letter of Credit to but excluding the date on which such Letter
expires or is drawn in full (including without limitation any LC Exposure
that remains outstanding after the Commitment Termination Date), as well as
the Lender's standard fees with respect to issuance, amendment, renewal or
extension of any Letter of Credit or processing of drawings thereunder.
(d) CLOSING FEE. The Borrower shall pay to Lender a closing fee equal
to 0.20% of the Commitment. The Closing Fee shall be due and payable on the
Closing Date.
(e) PAYMENTS. Accrued fees (other than the closing fee referenced in
paragraph (d)) shall be payable quarterly in arrears on the last day of
each March, June, September and December, commencing on March 31, 2001 and
on the Commitment Termination Date (and if later, the date the Loans and LC
Exposure shall be repaid in their entirety).
SECTION 2.9 COMPUTATION OF INTEREST AND FEES. All computations of interest
and fees hereunder shall be made on the basis of a year of 360 days for the
actual number of days (including the first day but excluding the last day)
occurring in the period for which such interest or fees are payable (to the
extent computed on the basis of days elapsed). Each determination by the Lender
of an interest amount or fee hereunder shall be made in good faith and, except
for manifest error, shall be final, conclusive and binding for all purposes.
SECTION 2.10 INCREASED COSTS.
(a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special
deposit or similar requirement that is not otherwise included in the
determination of the Adjusted LIBO Rate hereunder against assets of,
deposits with or for the account of, or credit extended by, the Lender
(except any such reserve requirement reflected in the Adjusted LIBO
Rate); or
16
(ii) impose on the Lender or the eurodollar interbank market any
other condition affecting this Agreement or any Eurodollar Loans made
by the Lender; and the result of the foregoing is to increase the cost
to the Lender of making, converting into, continuing or maintaining a
Eurodollar Loan or to increase the cost to the Lender of issuing any
Letter of Credit or to reduce the amount received or receivable by the
Lender hereunder (whether of principal, interest or any other amount),
then the Borrower shall promptly pay, upon written notice from and
demand by the Lender, within five Business Days after the date of such
notice and demand, additional amount or amounts sufficient to
compensate the Lender for such additional costs incurred or reduction
suffered.
(b) If the Lender shall have determined that on or after the date of
this Agreement any Change in Law regarding capital requirements has or
would have the effect of reducing the rate of return on the Lender's
capital (or on the capital of the Lender's parent corporation) as a
consequence of its obligations hereunder or under or in respect of any
Letter of Credit to a level below that which the Lender or the Lender's
parent corporation could have achieved but for such Change in Law (taking
into consideration the Lender's policies or the policies of the Lender's
parent corporation with respect to capital adequacy) then, from time to
time, within five (5)
Business Days after receipt by the Borrower of written demand by the
Lender, the Borrower shall pay to the Lender such additional amounts as
will compensate the Lender or the Lender's parent corporation for any such
reduction suffered.
(c) A certificate of the Lender setting forth the amount or amounts
necessary to compensate the Lender or its parent corporation, as the case
may be, specified in paragraph (a) or (b) of this Section shall be
delivered to the Borrower and shall be conclusive, absent manifest error.
The Borrower shall pay the Lender such amount or amounts within 10 days
after receipt thereof.
(d) Failure or delay on the part of the Lender to demand compensation
pursuant to this Section shall not constitute a waiver of the Lender's
right to demand such compensation.
SECTION 2.11 FUNDING INDEMNITY. In the event of (a) the payment of any
principal of a Eurodollar Loan other than on the last day of the Interest Period
applicable thereto (including as a result of an Event of Default), (b) the
conversion or continuation of a Eurodollar Loan other than on the last day of
the Interest Period applicable thereto, or (c) the failure by the Borrower to
borrow, prepay, or continue any Eurodollar Loan on the date specified in any
applicable notice (regardless of whether such notice is withdrawn or revoked),
then, in any such event, the Borrower shall compensate the Lender, within five
(5) Business Days after written demand from the Lender, for any loss, cost or
expense attributable to such event. Such loss, cost or expense shall be deemed
to include an amount determined by the Lender to be the excess, if any, of (A)
the amount of interest that would have accrued on the principal amount of such
Eurodollar Loan if such event had not occurred at the Adjusted LIBO Rate
applicable to such Eurodollar Loan for the period from the date of such event to
the last day of the then current Interest Period therefor (or in the
17
case of a failure to borrow or continue, for the period that would have been the
Interest Period for such Eurodollar Loan) over (B) the amount of interest that
would accrue on the principal amount of such Eurodollar Loan for the same period
if the Adjusted LIBO Rate were set on the date such Eurodollar Loan was prepaid
or converted or the date on which the Borrower failed to borrow or continue such
Eurodollar Loan. A certificate as to any additional amount payable under this
SECTION 2.11 submitted to the Borrower by the Lender shall be conclusive, absent
manifest error.
SECTION 2.12 PAYMENTS GENERALLY. The Borrower shall make each payment
required to be made by it hereunder prior to 11:00 a.m., on the date when due,
in immediately available funds, without set-off or counterclaim. Any amounts
received after such time on any date may, in the discretion of the Lender, be
deemed to have been received on the next succeeding Business Day for purposes of
calculating interest thereon. All such payments shall be made to the Lender at
its Payment Office. If any payment hereunder shall be due on a day that is not a
Business Day, the date for payment shall be extended to the next succeeding
Business Day, and, in the case of any payment accruing interest, interest
thereon shall be made payable for the period of such extension. All payments
hereunder shall be made in Dollars.
SECTION 2.13 LETTERS OF CREDIT.
(a) During the Availability Period, the Lender agrees to issue, at the
request of the Borrower, Letters of Credit for the account of the Loan
Parties on the terms and conditions hereinafter set forth; PROVIDED, that
(i) each Letter of Credit shall expire on the earlier of (A) the date one
year after the date of issuance of such Letter of Credit (or in the case of
any renewal or extension thereof, one year after such renewal or extension)
and (B) the date that is five (5) Business Days prior to the Commitment
Termination Date; (ii) each Letter of Credit shall be in a stated amount of
at least $50,000; and (iii) the Borrower may not request any Letter of
Credit, if, after giving effect to such issuance (A) the LC Exposure would
exceed the LC Commitment or (B) the LC Exposure, PLUS the outstanding Loans
would exceed the Commitment.
(b) To request the issuance of a Letter of Credit (or any amendment,
renewal or extension of an outstanding Letter of Credit), the Borrower
shall give the Lender irrevocable written notice at least three (3)
Business Days prior to the requested date of such issuance specifying the
date (which shall be a Business Day) such Letter of Credit is to be issued
(or amended, extended or renewed, as the case may be), the expiration date
of such Letter of Credit, the amount of such Letter of Credit , the name
and address of the beneficiary thereof and such other information as shall
be necessary to prepare, amend, renew or extend such Letter of Credit. In
addition to the satisfaction of the conditions in Article III, the issuance
of such Letter of Credit (or any amendment which increases the amount of
such Letter of Credit) will be subject to the further conditions that such
Letter of Credit shall be in such form and contain such terms as the Lender
shall approve and that the Borrower shall have executed and delivered any
additional applications, agreements and instruments relating to such Letter
of Credit as the Lender shall reasonably require; PROVIDED, that in the
event of any conflict between such applications, agreements or instruments
and this Agreement, the terms of this Agreement shall control.
18
(c) The Lender shall examine all documents purporting to represent a
demand for payment under a Letter of Credit promptly following its receipt
thereof. The Lender shall notify the Borrower of such demand for payment
and whether the Lender has made or will make a LC Disbursement thereunder;
PROVIDED, that any failure to give or delay in giving such notice shall not
relieve the Borrower of its obligation to reimburse the Lender with respect
to such LC Disbursement. The Borrower shall be irrevocably and
unconditionally obligated to reimburse the Lender for any LC Disbursements
paid by the Lender in respect of such drawing, without presentment, demand
or other formalities of any kind.
(d) If any Event of Default shall occur and be continuing, on the
Business Day that the Borrower receives notice from the Lender demanding
the deposit of cash collateral pursuant to this paragraph, the Borrower
shall deposit in an account with the Lender, in the name of the Lender and
for the benefit of the Lender, an amount in cash equal to the LC Exposure
as of such date plus any accrued and unpaid interest thereon; PROVIDED,
that the obligation to deposit such cash collateral shall become effective
immediately, and such deposit shall become immediately due and payable,
with demand or notice of any kind, upon the occurrence of any Event of
Default with respect to the Borrower described in clause (g) or (h) of
SECTION 8.1. Such deposit shall be held by the Lender as collateral for the
payment and performance of the obligations of the Borrower under this
Agreement. The Lender shall have exclusive dominion and control, including
the exclusive right of withdrawal, over such account. Such deposits shall
earn interest Federal Funds rate of interest on the investment of such
deposits, which investments shall be made at the option and sole discretion
of the Lender and at the Borrower's risk and expense, such deposits shall
not bear interest. Interest and profits, if any, on such investments shall
accumulate in such account. Moneys in such account shall applied by the
Lender to reimburse itself for LC Disbursements for which it had not been
reimbursed and to the extent so applied, shall be held for the satisfaction
of the reimbursement obligations of the Borrower for the LC Exposure at
such time or, if the maturity of the Loans has been accelerated, be applied
to satisfy other obligations of the Borrower under this Agreement. If the
Borrower is required to provide an amount of cash collateral hereunder as a
result of the occurrence of an Event of Default, such amount plus any
interest earned thereon (to the extent not so applied as aforesaid) shall
be returned to the Borrower with three Business Days after all Events of
Default have been cured or waived.
(e) The Borrower's obligation to reimburse LC Disbursements hereunder
shall be absolute, unconditional and irrevocable and shall be performed
strictly in accordance with the terms of this Agreement under all
circumstances whatsoever and irrespective of any of the following
circumstances:
19
(i) Any lack of validity or enforceability of any Letter of
Credit or this Agreement;
(ii) The existence of any claim, set-off, defense or other right
which the Borrower or any Subsidiary or Affiliate of the Borrower may
have at any time against a beneficiary or any transferee of any Letter
of Credit (or any Persons or entities for whom any such beneficiary or
transferee may be acting), the Lender or any other Person, whether in
connection with this Agreement or the Letter of Credit or any document
related hereto or thereto or any unrelated transaction;
(iii) Any draft or other document presented under a Letter of
Credit proving to be forged, fraudulent or invalid in any respect or
any statement therein being untrue or inaccurate in any respect;
(iv) Payment by the Lender under a Letter of Credit against
presentation of a draft or other document to the Lender that does not
comply with the terms of such Letter of Credit, if such non-compliance
is immaterial;
(v) Any other event or circumstance whatsoever, whether or not
similar to any of the foregoing, that might, but for the provisions of
this Section, constitute a legal or equitable discharge of, or provide
a right of setoff against, the Borrower's obligations hereunder; or
(vi) The existence of a Default or an Event of Default.
Neither the Lender nor any Related Party of the Lender shall have any
liability or responsibility by reason of or in connection with the
issuance or transfer of any Letter of Credit or any payment or failure
to make any payment thereunder (irrespective of any of the
circumstances referred to above), or any error, omission,
interruption, loss or delay in transmission or delivery of any draft,
notice or other communication under or relating to any Letter of
Credit (including any document required to make a drawing thereunder),
any error in interpretation of technical terms or any consequence
arising from causes beyond the control of the Lender; PROVIDED, that
the foregoing shall not be construed to excuse the Lender from
liability to the Borrower to the extent of any direct damages (as
opposed to consequential damages, claims in respect of which are
hereby waived by the Borrower to the extent permitted by applicable
law) suffered by the Borrower that are caused by the Lender's failure
to exercise care when determining whether drafts or other documents
presented under a Letter of Credit comply with the terms thereof. The
parties hereto expressly agree, that in the absence of gross
negligence or willful misconduct on the part of the Lender (as finally
determined by a court of competent jurisdiction), the Lender shall be
deemed to have exercised care in each such determination. In
furtherance of the foregoing and without limiting the generality
thereof, the parties agree that, with respect to documents presented
that appear on their face to be in substantial compliance with the
terms of a Letter of Credit, the Lender may, in its sole discretion,
either accept and make payment upon
20
such documents without responsibility for further investigation,
regardless of any notice or information to the contrary, or refuse to
accept and make payment upon such documents if such documents are not
in strict compliance with the terms of such Letter of Credit.
(f) Each Letter of Credit shall be subject to the Uniform Customs and
Practices for Documentary Credits (1993 Revision), International Chamber of
Commerce Publication No. 500, as the same may be amended from time to time,
and, to the extent not inconsistent therewith, the governing law of this
Agreement set forth in SECTION 9.5.
ARTICLE III
CONDITIONS PRECEDENT TO LOANS AND LETTERS OF CREDIT
SECTION 3.1 CONDITIONS TO EFFECTIVENESS. The obligations of the Lender to
make the initial Loan and to issue the initial Letter of Credit hereunder is
subject to the receipt by the Lender of the following documents in form and
substance reasonably satisfactory to the Lender:
(a) this Agreement duly executed and delivered by the Borrower;
(b) a duly executed Note;
(c) a duly executed Subsidiary Guarantee Agreement;
(d) a certificate of the Secretary or Assistant Secretary of each Loan
Party, attaching and certifying copies of its bylaws and of the resolutions
of its boards of directors, authorizing the execution, delivery and
performance of the Loan Documents to which it is a party and certifying the
name, title and true signature of each officer of such Loan Party executing
the Loan Documents to which it is a party;
(e) certified copies of the articles of incorporation or other charter
documents of each Loan Party, together with certificates of good standing
or existence, as may be available from the Secretary of State of the
jurisdiction of incorporation of such Loan Party and each other
jurisdiction where such Loan Party is required to be qualified to do
business as a foreign corporation;
(f) a certificate, dated the Closing Date and signed by a Responsible
Officer, confirming compliance with the conditions set forth in paragraphs
(a), (b) and (c) of SECTION 3.2.
SECTION 3.2 EACH CREDIT EVENT. The obligation of the Lender to make any
Loan or to issue, amend, renew or extend any Letter of Credit is subject to the
satisfaction of the following conditions:
21
(a) at the time of and immediately after giving effect to such Loan or
the issuance, amendment, renewal or extension of such Letter of Credit, as
applicable, no Default or Event of Default shall exist; and
(b) all representations and warranties of each Loan Party set forth in
the Loan Documents shall be true and correct in all material respects on
and as of the date of such Loan or the date of issuance, amendment,
extension or renewal of such Letter of Credit, in each case before and
after giving effect thereto; and
(c) since the date of the most recent financial statements of the
Borrower described in SECTION 5.1(A), there shall have been no change which
has had or could reasonably be expected to have a Material Adverse Effect.
The making of each Loan and each issuance, amendment, extension or renewal of
any Letter of Credit shall be deemed to constitute a representation and warranty
by the Borrower on the date thereof as to the matters specified in paragraphs
(a), (b) and (c) of this SECTION 3.2.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lender as follows:
SECTION 4.1 EXISTENCE; POWER. The Borrower and each of its Subsidiaries (i)
is duly organized, validly existing and in good standing as a corporation under
the laws of the jurisdiction of its organization, (ii) has all requisite power
and authority to carry on its business as now conducted, and (iii) is duly
qualified to do business, and is in good standing, in each jurisdiction where
such qualification is required, except where a failure to be so qualified could
not reasonably be expected to result in a Material Adverse Effect.
SECTION 4.2 ORGANIZATIONAL POWER; AUTHORIZATION. The execution, delivery
and performance by each Loan Party of the Loan Documents to which it is a party
are within such Loan Party's organizational powers and have been duly authorized
by all necessary organizational action. This Agreement has been duly executed
and delivered by the Borrower, and constitutes, and each other Loan Document to
which any Loan Party is a party, when executed and delivered by such Loan Party,
will constitute, valid and binding obligations of the Borrower or such Loan
Party (as the case may be), enforceable against it in accordance with their
respective terms, except as may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, or similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity.
SECTION 4.3 GOVERNMENTAL APPROVALS; NO CONFLICTS. The execution, delivery
and performance by the Borrower of this Agreement, and by each Loan Party of the
other Loan Documents to which it is a party (a) do not require any consent or
approval of, registration or filing with, or any action by, any Governmental
Authority, except those as have been obtained or made and are in full force and
effect or where the failure to do so, individually or in the aggregate, could
not reasonably be expected to have a Material Adverse Effect,
22
(b) will not violate any applicable law or regulation or the charter, by-laws or
other organizational documents of the Borrower or any of its Subsidiaries or any
order of any Governmental Authority, (c) will not violate or result in a default
under any indenture, material agreement or other material instrument binding on
the Borrower or any of its Subsidiaries or any of its assets or give rise to a
right thereunder to require any payment to be made by the Borrower or any of its
Subsidiaries and (d) will not result in the creation or imposition of any Lien
on any asset of the Borrower or any of its Subsidiaries, except Liens (if any)
created under the Loan Documents.
SECTION 4.4 FINANCIAL STATEMENTS. The Borrower has furnished to the Lender
(i) the audited consolidated balance sheet of the Borrower and its Subsidiaries
as of December 25, 1999 and the related consolidated statements of income,
shareholders' equity and cash flows for the fiscal year then ended audited by
PriceWaterhouseCooper LLP and (ii) the unaudited consolidated balance sheet of
the Borrower and its Subsidiaries as at the end of September 30, 2000, and the
related unaudited consolidated statements of income and cash flows for the
fiscal quarter and year-to-date period then ending, certified by a Responsible
Officer. Such financial statements fairly present the consolidated financial
condition of the Borrower and its Subsidiaries as of such dates and the
consolidated results of operations for such periods in conformity with GAAP
consistently applied, subject to year end audit adjustments and the absence of
footnotes in the case of the statements referred to in clause (ii). Since
September 30, 2000, there have been no changes with respect to the Borrower and
its Subsidiaries which have had or could reasonably be expected to have, singly
or in the aggregate, a Material Adverse Effect.
SECTION 4.5 LITIGATION. No litigation, investigation or proceeding of or
before any arbitrators or Governmental Authorities is pending against or, to the
knowledge of the Borrower, threatened against or affecting the Borrower or any
of its Subsidiaries (i) as to which there is a reasonable possibility of an
adverse determination that could reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect or (ii) which in any
manner draws into question the validity or enforceability of this Agreement or
any other Loan Document.
SECTION 4.6 COMPLIANCE WITH LAWS AND AGREEMENTS. The Borrower and each
Subsidiary is in compliance with (a) all applicable laws, rules, regulations and
orders of any Governmental Authority, and (b) all indentures, agreements or
other instruments binding upon it or its properties, except where
non-compliance, either singly or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.
SECTION 4.7 INVESTMENT COMPANY ACT, ETC. Neither the Borrower nor any of
its Subsidiaries is (a) an "investment company", as defined in, or subject to
regulation under, the Investment Company Act of 1940, as amended, (b) a "holding
company" as defined in, or subject to regulation under, the Public Utility
Holding Company Act of 1935, as amended or (c) otherwise subject to any other
regulatory scheme limiting its ability to incur debt.
SECTION 4.8 TAXES. The Borrower and its Subsidiaries have timely filed or
caused to be filed all Federal income tax returns and all other material tax
returns that are required to be filed by them, and have paid all taxes shown to
be due and payable on such
23
returns or on any assessments made against it or its property and all other
taxes, fees or other charges imposed on it or any of its property by any
Governmental Authority, except (i) to the extent the failure to do so would not
have a Material Adverse Effect or (ii) where the same are currently being
contested in good faith by appropriate proceedings and for which the Borrower or
such Subsidiary, as the case may be, has set aside on its books adequate
reserves.
SECTION 4.9 MARGIN REGULATIONS. None of the proceeds of any of the Loans or
Letters of Credit will be used for "purchasing" or "carrying" any "margin stock"
with the respective meanings of each of such terms under Regulation U as now and
from time to time hereafter in effect or for any purpose that violates the
provisions of the applicable Margin Regulations.
SECTION 4.10 ERISA. No ERISA Event has occurred or is reasonably expected
to occur that, when taken together with all other such ERISA Events for which
liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect.
SECTION 4.11 OWNERSHIP OF PROPERTY.
(a) Each of the Borrower and its Subsidiaries has good title to, or
valid leasehold interests in, all of its real and personal property
material to the operation of its business.
(b) Each of the Borrower and its Subsidiaries owns, or is licensed, or
otherwise has the right, to use, all patents, trademarks, service marks,
trade names, copyrights and other intellectual property material to its
business, and the use thereof by the Borrower and its Subsidiaries does not
infringe on the rights of any other Person, except for any such
infringements that, individually or in the aggregate, would not have a
Material Adverse Effect.
SECTION 4.12 DISCLOSURE. The Borrower has disclosed to the Lender all
agreements, instruments, and corporate or other restrictions to which the
Borrower or any of its Subsidiaries is subject, and all other matters known to
any of them, that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect. None of the reports (including
without limitation all reports that the Borrower is required to file with the
Securities and Exchange Commission), financial statements, certificates or other
information furnished by or on behalf of the Borrower to the Lender in
connection with the negotiation of this Agreement or any other Loan Document or
delivered hereunder or thereunder (as modified or supplemented by any other
information so furnished) contains any material misstatement of fact or omits to
state any material fact necessary to make the statements therein, taken as a
whole, in light of the circumstances under which they were made, not misleading.
SECTION 4.13 LABOR RELATIONS. There are no strikes, lockouts or other
material labor disputes or grievances against the Borrower or any of its
Subsidiaries, or, to the Borrower's knowledge, threatened against or affecting
the Borrower or any of its Subsidiaries, and no
24
significant unfair labor practice, charges or grievances are pending against the
Borrower or any of its Subsidiaries, or to the Borrower's knowledge, threatened
against any of them before any Governmental Authority. All payments due from the
Borrower or any of its Subsidiaries pursuant to the provisions of any collective
bargaining agreement have been paid or accrued as a liability on the books of
the Borrower or any such Subsidiary, except where the failure to do so could not
reasonably be expected to have a Material Adverse Effect.
SECTION 4.14 SUBSIDIARIES. Schedule 4.14 sets forth the name of, the
ownership interest of the Borrower in, the jurisdiction of incorporation of, and
the type of, each Subsidiary and identifies each Subsidiary that is a Subsidiary
Loan Party, in each case as of the Closing Date.
ARTICLE V
AFFIRMATIVE COVENANTS
The Borrower covenants and agrees that so long as the Lender has a
Commitment hereunder or the principal of and interest on any Loan or any fee or
any LC Disbursement remains unpaid or any Letter of Credit remains outstanding:
SECTION 5.1 FINANCIAL STATEMENTS AND OTHER INFORMATION. The Borrower will
deliver to the Lender:
(a) as soon as available and in any event within 90 days after the end
of each fiscal year of Borrower, a copy of the annual audited report for
such fiscal year for the Borrower and its Subsidiaries, containing a
consolidated balance sheet of the Borrower and its Subsidiaries as of the
end of such fiscal year and the related consolidated statements of income,
stockholders' equity and cash flows (together with all footnotes thereto)
of the Borrower and its Subsidiaries for such fiscal year, setting forth in
each case in comparative form the figures for the previous fiscal year, all
in reasonable detail and reported on by PriceWaterhouseCooper LLP or other
independent public accountants of nationally recognized standing (without a
"going concern" or like qualification, exception or explanation and without
any qualification or exception as to scope of such audit) to the effect
that such financial statements present fairly in all material respects the
financial condition and the results of operations of the Borrower and its
Subsidiaries for such fiscal year on a consolidated basis in accordance
with GAAP and that the examination by such accountants in connection with
such consolidated financial statements has been made in accordance with
generally accepted auditing standards;
(b) as soon as available and in any event within 45 days after the end
of each of the first three fiscal quarters of each fiscal year of the
Borrower, an unaudited consolidated balance sheet of the Borrower and its
Subsidiaries as of the end of such fiscal quarter and the related unaudited
consolidated statements of income and cash flows of the Borrower and its
Subsidiaries for such fiscal quarter and the then elapsed portion of such
fiscal year, setting forth in each case in
25
comparative form the figures for the corresponding quarter and the
corresponding portion of Borrower's previous fiscal year, all certified by
the chief financial officer or treasurer of the Borrower as presenting
fairly in all material respects the financial condition and results of
operations of the Borrower and its Subsidiaries on a consolidated basis in
accordance with GAAP, subject to normal year-end audit adjustments and the
absence of footnotes;
(c) concurrently with the delivery of the financial statements
referred to in clauses (a) and (b) above, a certificate of a Responsible
Officer, (i) certifying as to whether there exists a Default or Event of
Default on the date of such certificate, and if a Default or an Event of
Default then exists, specifying the details thereof and the action which
the Borrower has taken or proposes to take with respect thereto, (ii)
setting forth in reasonable detail calculations demonstrating compliance
with Article VI and (iii) stating whether any change in GAAP or the
application thereof has occurred since the date of the Borrower's audited
financial statements referred to in SECTION 4.4 and, if any change has
occurred, specifying the effect of such change on the financial statements
accompanying such certificate;
(d) promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials filed with
the Securities and Exchange Commission, or any Governmental Authority
succeeding to any or all functions of said Commission, or with any national
securities exchange, or distributed by the Borrower to its shareholders
generally, as the case may be; and
(e) promptly following any request therefor, such other information
regarding the results of operations, business affairs and financial
condition of the Borrower or any Subsidiary as the Lender may reasonably
request.
SECTION 5.2 NOTICES OF MATERIAL EVENTS. The Borrower will furnish to the
Lender prompt written notice of the following:
(a) the occurrence of any Default or Event of Default;
(b) the filing or commencement of any action, suit or proceeding by or
before any arbitrator or Governmental Authority against or, to the
knowledge of the Borrower, affecting the Borrower or any Subsidiary which,
if adversely determined, could reasonably be expected to result in a
Material Adverse Effect;
(c) the occurrence of any ERISA Event that alone, or together with any
other ERISA Events that have occurred, could reasonably be expected to
result in liability of the Borrower and its Subsidiaries in an aggregate
amount exceeding $2,000,000; and
(d) any other development that results in, or could reasonably be
expected to result in, a Material Adverse Effect.
26
Each notice delivered under this Section shall be accompanied by a written
statement of a Responsible Officer setting forth the details of the event or
development requiring such notice and any action taken or proposed to be taken
with respect thereto.
SECTION 5.3 EXISTENCE; CONDUCT OF BUSINESS. The Borrower will, and will
cause each of its Subsidiaries to, do or cause to be done all things necessary
to preserve, renew and maintain in full force and effect its legal existence and
its respective rights, licenses, permits, privileges, franchises, patents,
copyrights, trademarks and trade names material to the conduct of its business
and will continue to engage in the same business as presently conducted or such
other businesses that are reasonably related thereto; PROVIDED, that nothing in
this Section shall prohibit any merger, consolidation, liquidation or
dissolution permitted under SECTION 7.3.
SECTION 5.4 COMPLIANCE WITH LAWS, ETC. The Borrower will, and will cause
each of its Subsidiaries to, comply with all laws, rules, regulations and
requirements of any Governmental Authority applicable to its properties, except
where the failure to do so, either individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
SECTION 5.5 PAYMENT OF OBLIGATIONS. The Borrower will, and will cause each
of its Subsidiaries to, pay and discharge at or before maturity, all of its
obligations and liabilities (including without limitation all tax liabilities
and claims that could result in a statutory Lien) before the same shall become
delinquent or in default, except where (a) the validity or amount thereof is
being contested in good faith by appropriate proceedings, (b) the Borrower or
such Subsidiary has set aside on its books adequate reserves with respect
thereto in accordance with GAAP and (c) the failure to make payment pending such
contest could not reasonably be expected to result in a Material Adverse Effect.
SECTION 5.6 BOOKS AND RECORDS. The Borrower will, and will cause each of
its Subsidiaries to, keep proper books of record and account in which full, true
and correct entries shall be made of all dealings and transactions in relation
to its business and activities to the extent necessary to prepare the
consolidated financial statements of Borrower in conformity with GAAP.
SECTION 5.7 VISITATION, INSPECTION, ETC. The Borrower will, and will cause
each of its Subsidiaries to, permit any representative of the Lender to visit
and inspect its properties, to examine its books and records and to make copies
and take extracts therefrom, and to discuss its affairs, finances and accounts
with any of its officers and with its independent certified public accountants,
all at such reasonable times and as often as the Lender may reasonably request
after reasonable prior notice to the Borrower.
SECTION 5.8 MAINTENANCE OF PROPERTIES; INSURANCE. The Borrower will, and
will cause each of its Subsidiaries to, (a) keep and maintain all property
material to the conduct of its business in good working order and condition,
ordinary wear and tear except where the failure to do so, either individually or
it the aggregate, could not reasonably be expected to result in a Material
Adverse Effect and (b) maintain with financially sound and reputable insurance
companies, insurance with respect to its properties and business, and
27
the properties and business of its Subsidiaries, against loss or damage of the
kinds customarily insured against by companies in the same or similar businesses
operating in the same or similar locations.
SECTION 5.9 USE OF PROCEEDS AND LETTERS OF CREDIT. The Borrower will use
the proceeds of all Loans to finance working capital needs and for other general
corporate purposes of the Borrower and its Subsidiaries. No part of the proceeds
of any Loan will be used, whether directly or indirectly, for any purpose that
would violate any rule or regulation of the Board of Governors of the Federal
Reserve System, including Regulations T, U or X. All Letters of Credit will be
used for general corporate purposes.
SECTION 5.10 ADDITIONAL SUBSIDIARIES. If any additional Subsidiary is
acquired or formed after the Closing Date, the Borrower will, within ten (10)
business days after such Subsidiary is acquired or formed, notify the Lender
thereof and will cause such Subsidiary to become a Subsidiary Loan Party by
executing agreements in the form of Annex I to Exhibit B in form and substance
satisfactory to the Lender and will cause such Subsidiary to deliver
simultaneously therewith similar documents applicable to such Subsidiary
required under SECTION 3.1 as reasonably requested by the Lender.
ARTICLE VI
FINANCIAL COVENANTS
The Borrower covenants and agrees that so long as the Lender has its
Commitment hereunder or the principal of or interest on or any Loan remains
unpaid or any fee or any LC Disbursement remains unpaid or any Letter of Credit
remains outstanding:
SECTION 6.1 LEVERAGE RATIO. As of the end of each fiscal quarter of the
Borrower, commencing with the fiscal quarter ending December 29, 2000,
Borrower's Consolidated Leverage Ratio (calculated on a trailing four-quarters
basis) will not exceed 2.50 to 1.00.
SECTION 6.2 CONSOLIDATED FIXED CHARGE COVERAGE RATIO. As of the end of each
fiscal quarter of the Borrower, commencing with the fiscal quarter ending
December 29, 2000, Borrower's a Fixed Charge Coverage Ratio (calculated on a
trailing four-quarters basis) shall be not less than 1.25 to 1.00.
SECTION 6.3 CONSOLIDATED NET WORTH. The Borrower will not permit its
Consolidated Net Worth at any time to be less than the sum of $80,000,000, PLUS
50% of Consolidated Net Income earned subsequent to Borrower's fiscal year
ending in December of 2000 on a cumulative basis; PROVIDED, that if Consolidated
Net Income is negative in any fiscal quarter the amount added for such fiscal
quarter shall be zero and such negative Consolidated Net Income shall not reduce
the amount of Consolidated Net Income added from any previous fiscal quarter.
The amount of Consolidated Net Worth set forth above shall also be increased by
75% of the net proceeds of any public or private offering of common stock of the
Borrower after the Closing Date. Promptly upon the consummation of such
offering, the Borrower shall notify the Lender in writing of the amount of such
equity offering.
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ARTICLE VII
NEGATIVE COVENANTS
The Borrower covenants and agrees that so long as the Lender has its
Commitment hereunder or the principal of or interest on any Loan remains unpaid
or any fee or any LC Disbursement remains unpaid or any Letter of Credit remains
outstanding:
SECTION 7.1 INDEBTEDNESS. The Borrower will not, and will not permit any of
its Subsidiaries to, create, incur, assume or suffer to exist any Indebtedness,
except:
(a) Indebtedness created pursuant to the Loan Documents;
(b) Indebtedness existing on the date hereof and set forth on SCHEDULE
7.1 and extensions, renewals and replacements of any such Indebtedness that
do not increase the outstanding principal amount thereof (immediately prior
to giving effect to such extension, renewal or replacement) or shorten the
maturity or the weighted average life thereof;
(c) Indebtedness of the Borrower owing to any Subsidiary and of any
Subsidiary owing to the Borrower or any other Subsidiary; PROVIDED, that
any such Indebtedness that is owed to a Subsidiary shall be a Subsidiary
Loan Party;
(d) Guarantees by the Borrower of Indebtedness of any Subsidiary and
by any Subsidiary of Indebtedness of the Borrower or any other Subsidiary;
PROVIDED, that Guarantees by a Subsidiary shall be a Subsidiary Loan Party;
(e) Indebtedness in respect of obligations under Hedging Agreements
permitted by SECTION 7.10; and
(f) other Indebtedness in an aggregate principal amount not to exceed
$10,000,000 at any time outstanding.
SECTION 7.2 NEGATIVE PLEDGE. The Borrower will not, and will not permit any
of its Subsidiaries to, create, incur, assume or suffer to exist any Lien on any
of its assets or property now owned or hereafter acquired or, except:
(a) Permitted Encumbrances;
(b) any Liens on any property or asset of the Borrower or any
Subsidiary existing on the Closing Date set forth on SCHEDULE 7.2;
PROVIDED, that such Lien shall not apply to any other property or asset of
the Borrower or any Subsidiary;
(c) purchase money Liens upon or in any fixed or capital assets to
secure the purchase price or the cost of construction or improvement of
such fixed or capital assets or to secure Indebtedness incurred solely for
the purpose of financing the acquisition, construction or improvement of
such fixed or capital assets (including Liens securing any Capital Lease
Obligations); PROVIDED, that (i) such Lien secures
29
Indebtedness permitted by SECTION 7.1(C), (ii) such Lien attaches to such
asset concurrently or within 90 days after the acquisition, improvement or
completion of the construction thereof; (iii) such Lien does not extend to
any other asset; and (iv) the Indebtedness secured thereby does not exceed
the cost of acquiring, constructing or improving such fixed or capital
assets;
(d) any Lien (i) existing on any asset of any Person at the time such
Person becomes a Subsidiary of the Borrower, (ii) existing on any asset of
any Person at the time such Person is merged with or into the Borrower or
any Subsidiary of the Borrower or (iii) existing on any asset prior to the
acquisition thereof by the Borrower or any Subsidiary of the Borrower;
PROVIDED, that any such Lien was not created in the contemplation of any of
the foregoing and any such Lien secures only those obligations which it
secures on the date that such Person becomes a Subsidiary or the date of
such merger or the date of such acquisition; and
(e) extensions, renewals, or replacements of any Lien referred to in
paragraphs (a) through (d) of this Section; PROVIDED, that the principal
amount of the Indebtedness secured thereby is not increased and that any
such extension, renewal or replacement is limited to the assets originally
encumbered thereby.
SECTION 7.3 FUNDAMENTAL CHANGES.
(a) The Borrower will not, and will not permit any Subsidiary to,
merge into or consolidate into any other Person, or permit any other Person
to merge into or consolidate with it, or sell, lease, transfer or otherwise
dispose of (in a single transaction or a series of transactions) all or
substantially all of its assets (in each case, whether now owned or
hereafter acquired) or all or substantially all of the stock of any of its
Subsidiaries (in each case, whether now owned or hereafter acquired) or
liquidate or dissolve; PROVIDED, that if at the time thereof and
immediately after giving effect thereto, no Default or Event of Default
shall have occurred and be continuing (i) the Borrower or any Subsidiary
may merge with a Person if the Borrower (or such Subsidiary if the Borrower
is not a party to such merger) is the surviving Person, (ii) any Subsidiary
may merge into another Subsidiary; PROVIDED, that if any party to such
merger is a Subsidiary Loan Party, the Subsidiary Loan Party shall be the
surviving Person, (iii) any Subsidiary may sell, transfer, lease or
otherwise dispose of all or substantially all of its assets to the Borrower
or to a Subsidiary Loan Party and (iv) any Subsidiary (other than a
Subsidiary Loan Party) may liquidate or dissolve if the Borrower determines
in good faith that such liquidation or dissolution is in the best interests
of the Borrower and is not materially disadvantageous to the Lender;
PROVIDED, that any such merger involving a Person that is not a
wholly-owned Subsidiary immediately prior to such merger shall not be
permitted unless also permitted by SECTION 7.4.
(b) The Borrower will not, and will not permit any of its Subsidiaries
to, engage to any material extent in any business other than businesses of
the type conducted by the Borrower and its Subsidiaries on the date hereof
and businesses reasonably related thereto.
30
SECTION 7.4 INVESTMENTS, LOANS, ETC. The Borrower will not, and will not
permit any of its Subsidiaries to, purchase, hold or acquire (including pursuant
to any merger with any Person that was not a wholly-owned Subsidiary prior to
such merger), any common stock, evidence of indebtedness or other securities
(including any option, warrant, or other right to acquire any of the foregoing)
of, make or permit to exist any loans or advances to, Guarantee any obligations
of, or make or permit to exist any investment or any other interest in, any
other Person (all of the foregoing being collectively called "INVESTMENTS"), or
purchase or otherwise acquire (in one transaction or a series of transactions)
any assets of any other Person that constitute a business unit, except:
(a) Investments (other than Permitted Investments) existing on the
date hereof and set forth on SCHEDULE 7.4 (including Investments in
Subsidiaries);
(b) Permitted Investments;
(c) Guarantees constituting Indebtedness permitted by SECTION 7.1;
(d) Investments made by the Borrower in or to any Subsidiary and by
any Subsidiary to the Borrower or in or to another Subsidiary;
(e) loans or advances to employees, officers or directors of the
Borrower or any Subsidiary in the ordinary course of business for travel,
relocation and related expenses;
(f) Hedging Agreements permitted by SECTION 7.10; and
(g) Other Investments which in the aggregate do not exceed $5,000,000
in any fiscal year of the Borrower.
SECTION 7.5 RESTRICTED PAYMENTS. The Borrower will not, and will not permit
its Subsidiaries to, declare or make, or agree to pay or make, directly or
indirectly, any dividend on any class of its stock, or make any payment on
account of, or set apart assets for a sinking or other analogous fund for, the
purchase, redemption, retirement, defeasance or other acquisition of, any shares
of common stock or Indebtedness subordinated to the Obligations of the Borrower
or any options, warrants, or other rights to purchase such common stock or such
Indebtedness, whether now or hereafter outstanding (each, a "RESTRICTED
PAYMENT"), except for (i) dividends payable by the Borrower solely in shares of
any class of its common stock; (ii) Restricted Payments made by any Subsidiary
to the Borrower or to another Subsidiary; (iii) repurchases of Borrower's
capital shares which do not exceed $5,000,000 in the aggregate; and (iv) cash
dividends paid on, and cash redemptions of, the common stock of the Borrower;
PROVIDED, that no Default or Event of Default has occurred and is continuing at
the time such dividend is paid or redemption is made.
SECTION 7.6 SALE OF ASSETS. The Borrower will not, and will not permit any
of its Subsidiaries to, convey, sell, lease, assign, transfer or otherwise
dispose of, any of its assets, business or property, whether now owned or
hereafter acquired, or, in the case of any
31
Subsidiary, issue or sell any shares of such Subsidiary's common stock to
any Person other than the Borrower (or to qualify directors if required by
applicable law), except:
(a) the sale or other disposition for fair market value of obsolete or
worn out property or other property not necessary for operations disposed
of in the ordinary course of business;
(b) the sale of inventory and Permitted Investments in the ordinary
course of business; and
(c) the sale or other disposition of such assets in an aggregate
amount not to exceed $10,000,000 from the Closing Date to the Commitment
Termination Date.
SECTION 7.7 TRANSACTIONS WITH AFFILIATES. The Borrower will not, and will
not permit any of its Subsidiaries to, sell, lease or otherwise transfer any
property or assets to, or purchase, lease or otherwise acquire any property or
assets from, or otherwise engage in any other transactions with, any of its
Affiliates, except (a) in the ordinary course of business at prices and on terms
and conditions not less favorable to the Borrower or such Subsidiary than could
be obtained on an arm's-length basis from unrelated third parties, (b)
transactions between or among the Borrower and its Subsidiaries not involving
any other Affiliates and (c) any Restricted Payment permitted by SECTION 7.5.
SECTION 7.8 RESTRICTIVE AGREEMENTS. The Borrower will not, and will not
permit any Subsidiary to, directly or indirectly, enter into, incur or permit to
exist any agreement that prohibits, restricts or imposes any condition upon (a)
the ability of the Borrower or any Subsidiary to create, incur or permit any
Lien upon any of its assets or properties, whether now owned or hereafter
acquired, or (b) the ability of any Subsidiary to pay dividends or other
distributions with respect to its common stock, to make or repay loans or
advances to the Borrower or any other Subsidiary, to Guarantee Indebtedness of
the Borrower or any other Subsidiary or to transfer any of its property or
assets to the Borrower or any Subsidiary of the Borrower; PROVIDED, that (i) the
foregoing shall not apply to restrictions or conditions imposed by law or by
this Agreement or any other Loan Document, (ii) the foregoing shall not apply to
customary restrictions and conditions contained in agreements relating to the
sale of a Subsidiary pending such sale, provided such restrictions and
conditions apply only to the Subsidiary that is sold and such sale is permitted
hereunder, (iii) clause (a) shall not apply to restrictions or conditions
imposed by any agreement relating to secured Indebtedness permitted by this
Agreement if such restrictions and conditions apply only to the property or
assets securing such Indebtedness and (iv) clause (a) shall not apply to
customary provisions in leases and other contracts restricting the assignment
thereof.
SECTION 7.9 [RESERVED]
SECTION 7.10 HEDGING AGREEMENTS. The Borrower will not, and will not permit
any of the Subsidiaries to, enter into any Hedging Agreement, other than Hedging
Agreements entered into in the ordinary course of business to hedge or mitigate
risks to which the Borrower or any Subsidiary is exposed in the conduct of its
business or the management
32
of its liabilities. Solely for the avoidance of doubt, the Borrower acknowledges
that a Hedging Agreement entered into for speculative purposes or of a
speculative nature (which shall be deemed to include any Hedging Agreement under
which the Borrower or any of the Subsidiaries is or may become obliged to make
any payment (i) in connection with the purchase by any third party of any common
stock or any Indebtedness or (ii) as a result of changes in the market value of
any common stock or any Indebtedness) is not a Hedging Agreement entered into in
the ordinary course of business to hedge or mitigate risks.
SECTION 7.11 AMENDMENT TO MATERIAL DOCUMENTS. The Borrower will not, and
will not permit any Subsidiary to, amend, modify or waive any of its rights in a
manner materially adverse to the Lender under its certificate of incorporation,
bylaws or other organizational documents.
SECTION 7.12 ACCOUNTING CHANGES. The Borrower will not, and will not permit
any Subsidiary to, make any significant change in accounting treatment or
reporting practices, except as required by GAAP, or change the fiscal year of
the Borrower or of any Subsidiary by more than 30 days, except to change the
fiscal year of a Subsidiary to conform its fiscal year to that of the Borrower.
SECTION 7.13 ACQUISITIONS. Enter into any agreement providing for any
acquisition unless (i) lines of business of the Person to be acquired are
substantially the same as one or more line or lines of business conducted by the
Borrower or its Subsidiaries, (ii) no Default or Event of Default shall have
occurred and be continuing either immediately prior to or immediately after
giving effect to such acquisition, (iii) the Person acquired shall be a
wholly-owned Subsidiary, or be merged into the Borrower upon consummation of the
acquisition (or if assets are being acquired, the acquiror shall be the Borrower
or a Subsidiary), and (iv) after giving effect to such acquisition, the
aggregate costs of all acquisition incurred during the term of this Agreement
(on a cumulative basis) shall not exceed $20,000,000.
ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.1 EVENTS OF DEFAULT. If any of the following events (each an
"EVENT OF DEFAULT") shall occur:
(a) the Borrower shall fail to pay any principal of any Loan or of any
reimbursement obligation in respect of any LC Disbursement when and as the
same shall become due and payable, whether at the due date thereof or at a
date fixed for prepayment or otherwise; or
(b) the Borrower shall fail to pay any interest on any Loan or any fee
or any other amount (other than an amount payable under clause (a) of this
Article) payable under this Agreement or any other Loan Document, when and
as the same shall become due and payable, and such failure shall continue
unremedied for a period of five (5) Business Days; or
33
(c) any representation or warranty made or deemed made by or on behalf
of the Borrower or any Subsidiary in or in connection with this Agreement
or any other Loan Document (including the Schedules attached thereto) and
any amendments or modifications hereof or waivers hereunder, or in any
certificate, report, financial statement or other document submitted to the
Lender by any Loan Party or any representative of any Loan Party pursuant
to or in connection with this Agreement or any other Loan Document shall
prove to be incorrect in any material respect when made or deemed made or
submitted; or
(d) the Borrower shall fail to observe or perform any covenant or
agreement contained in SECTION 5.3 (with respect to the Borrower's
existence) or Article VI; or
(e) the Borrower shall fail to observe any covenant under Article VII
and such failure is not cured within ten (10) Business Days thereof; or
(f) any Loan Party shall fail to observe or perform any covenant or
agreement contained in this Agreement (other than those referred to in
clauses (a), (b) and (d) above), and such failure shall remain unremedied
for 30 days after the earlier of (i) any officer of the Borrower becomes
aware of such failure, or (ii) notice thereof shall have been given to the
Borrower by the Lender; or
(g) the Borrower or any Subsidiary (whether as primary obligor or as
guarantor or other surety) shall fail to pay any principal of or premium or
interest on any Material Indebtedness that is outstanding, when and as the
same shall become due and payable (whether at scheduled maturity, required
prepayment, acceleration, demand or otherwise), and such failure shall
continue after the applicable grace period, if any, specified in the
agreement or instrument evidencing such Indebtedness; or any other event
shall occur or condition shall exist under any agreement or instrument
relating to such Indebtedness and shall continue after the applicable grace
period, if any, specified in such agreement or instrument, if the effect of
such event or condition is to accelerate, or permit the acceleration of,
the maturity of such Indebtedness; or any such Indebtedness shall be
declared to be due and payable; or required to be prepaid or redeemed
(other than by a regularly scheduled required prepayment or redemption),
purchased or defeased, or any offer to prepay, redeem, purchase or defease
such Indebtedness shall be required to be made, in each case prior to the
stated maturity thereof; or
(h) the Borrower or any Subsidiary shall (i) commence a voluntary case
or other proceeding or file any petition seeking liquidation,
reorganization or other relief under any federal, state or foreign
bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a custodian, trustee, receiver, liquidator or
other similar official of it or any substantial part of its property, (ii)
consent to the institution of , or fail to contest in a timely and
appropriate manner, any proceeding or petition described in clause (i) of
this Section, (iii) apply for or consent to the appointment of a custodian,
trustee, receiver, liquidator or other similar official for the Borrower or
any such Subsidiary or for a
34
substantial part of its assets, (iv) file an answer admitting the material
allegations of a petition filed against it in any such proceeding, (v) make
a general assignment for the benefit of creditors, or (vi) take any action
for the purpose of effecting any of the foregoing; or
(i) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed seeking (i) liquidation, reorganization or other
relief in respect of the Borrower or any Subsidiary or its debts, or any
substantial part of its assets, under any federal, state or foreign
bankruptcy, insolvency or other similar law now or hereafter in effect or
(ii) the appointment of a custodian, trustee, receiver, liquidator or other
similar official for the Borrower or any Subsidiary or for a substantial
part of its assets, and in any such case, such proceeding or petition shall
remain undismissed for a period of 60 days or an order or decree approving
or ordering any of the foregoing shall be entered; or
(j) the Borrower or any Subsidiary shall become unable to pay, shall
admit in writing its inability to pay, or shall fail to pay, its debts as
they become due; or
(k) an ERISA Event shall have occurred that, in the opinion of the
Lender, when taken together with other ERISA Events that have occurred,
could reasonably be expected to result in liability to the Borrower and the
Subsidiaries in an aggregate amount exceeding $2,000,000; or
(l) any judgment or order for the payment of money in excess of
$250,000 in the aggregate shall be rendered against the Borrower or any
Subsidiary, and either (i) enforcement proceedings shall have been
commenced by any creditor upon such judgment or order or (ii) there shall
be a period of 30 consecutive days during which a stay of enforcement of
such judgment or order, by reason of a pending appeal or otherwise, shall
not be in effect; or
(m) any non-monetary judgment or order shall be rendered against the
Borrower or any Subsidiary that could reasonably be expected to have a
Material Adverse Effect, and there shall be a period of 30 consecutive days
during which a stay of enforcement of such judgment or order, by reason of
a pending appeal or otherwise, shall not be in effect; or
(n) a Change in Control shall occur or exist; or
(o) any provision of any Subsidiary Guarantee Agreement shall for any
reason cease to be valid and binding on, or enforceable against, any
Subsidiary Loan Party, or any Subsidiary Loan Party shall so state in
writing, or any Subsidiary Loan Party shall seek to terminate its
Subsidiary Guarantee Agreement;
then, and in every such event (other than an event with respect to the Borrower
described in clause (h) or (i) of this Section) and at any time thereafter
during the continuance of such event, the Lender may, by notice to the Borrower,
take any or all of the following actions, at the same or different times: (i)
terminate its Commitment; (ii) declare the principal of
35
and any accrued interest on the Loans, and all other Obligations owing
hereunder, to be, whereupon the same shall become due and payable immediately,
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by the Borrower and (iii) exercise all remedies contained in
any other Loan Document; and that, if an Event of Default specified in either
clause (h) or (i) shall occur, the Commitment shall automatically terminate and
the principal of the Loans then outstanding, together with accrued interest
thereon, and all fees, and all other Obligations shall automatically become due
and payable, without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Borrower.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 NOTICES.
(a) Except in the case of notices and other communications expressly
permitted to be given by telephone, all notices and other communications to
any party herein to be effective shall be in writing and shall be delivered
by hand or overnight courier service, mailed by certified or registered
mail or sent by telecopy, as follows:
To the Borrower: Panera Bread Company
▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, CFO
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
To the Lender: SunTrust Bank
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇, Vice President
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Any party hereto may change its address or telecopy number for notices and
other communications hereunder by notice to the other parties hereto. All
such notices and other communications shall, when transmitted by overnight
delivery, or faxed, be effective when delivered for overnight (next-day)
delivery, or transmitted in legible form by facsimile machine,
respectively, or if mailed, upon the third Business Day after the date
deposited into the mails or if delivered, upon delivery.
(b) Any agreement of the Lender herein to receive certain notices by
telephone or facsimile is solely for the convenience and at the request of
the Borrower. The Lender shall be entitled to rely on the authority of any
Person purporting to be a Person authorized by the Borrower to give such
notice and the Lender shall not have any liability to the Borrower or other
Person on account of any action taken or not taken by the Lender in
reliance upon such telephonic or facsimile notice. The obligation of the
Borrower to repay the Loans and all other Obligations hereunder shall not
be affected in any way or to any extent by any failure of the Lender to
receive written confirmation of any telephonic or facsimile
36
notice or the receipt by the Lender of a confirmation which is at variance
with the terms understood by the Lender to be contained in any such
telephonic or facsimile notice.
SECTION 9.2 WAIVER; AMENDMENTS.
(a) No failure or delay by the Lender in exercising any right or power
thereunder or any other Loan Document, and no course of dealing between the
Borrower and the Lender, shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right or power or any abandonment or
discontinuance of steps to enforce such right or power, preclude any other
or further exercise thereof or the exercise of any other right or power
hereunder or thereunder. The rights and remedies of the Lender hereunder
and under the other Loan Documents are cumulative and are not exclusive of
any rights or remedies provided by law. No waiver of any provision of this
Agreement or any other Loan Document or consent to any departure by the
Borrower therefrom shall in any event be effective unless the same shall be
permitted by paragraph (b) of this Section, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for
which given. Without limiting the generality of the foregoing, the making
of a Loan or the issuance of a Letter of Credit shall not be construed as a
waiver of any Default or Event of Default, regardless of whether the Lender
may have had notice or knowledge of such Default or Event of Default at the
time.
(b) No amendment or waiver of any provision of this Agreement or the
other Loan Documents, nor consent to any departure by the Borrower
therefrom, shall in any event be effective unless the same shall be in
writing and signed by the Borrower and the Lender and then such waiver or
consent shall be effective only in the specific instance and for the
specific purpose for which given.
SECTION 9.3 EXPENSES; INDEMNIFICATION.
(a) The Borrower shall pay (i) all reasonable, out-of-pocket costs and
expenses of the Lender (including, without limitation, the reasonable fees,
charges and disbursements of outside counsel and the allocated cost of
inside counsel) in connection with the enforcement or protection of its
rights in connection with this Agreement, including its rights under this
Section, or in connection with the Loans made or any Letters of Credit
issued hereunder, including all such out-of-pocket expenses incurred during
any workout, restructuring or negotiations in respect of such Loans or
Letters of Credit.
(b) The Borrower shall indemnify the Lender and each Related Party of
the Lender (each, an "INDEMNITEE") against, and hold each of them harmless
from, any and all costs, losses, liabilities, claims, damages and related
expenses, including the fees, charges and disbursements of any counsel for
any Indemnitee, which may be incurred by or asserted against any Indemnitee
arising out of, in connection with
37
or as a result of (i) the execution or delivery of any this Agreement or
any other agreement or instrument contemplated hereby, the performance by
the parties hereto of their respective obligations hereunder or the
consummation of any of the transactions contemplated hereby, (ii) any Loan
or Letter of Credit or any actual or proposed use of the proceeds therefrom
(including any refusal by the Lender to honor a demand for payment under a
Letter of Credit if the documents presented in connection with such demand
do not strictly comply with the terms of such Letter of Credit), or (iii)
any actual or prospective claim, litigation, investigation or proceeding
relating to any of the foregoing, whether based on contract, tort, or any
other theory and regardless of whether any Indemnitee is a party thereto;
PROVIDED, that the Borrower shall not be obligated to indemnify any
Indemnitee for any of the foregoing arising out of such Indemnitee's gross
negligence or willful misconduct as determined by a court of competent
jurisdiction in a final and nonappealable judgment.
(c) The Borrower shall pay, and hold the Lender harmless from and
against, any and all present and future stamp, documentary, and other
similar taxes with respect to this Agreement and any other Loan Documents
or any payments due thereunder, and save the Lender harmless from and
against any and all liabilities with respect to or resulting from any delay
or omission to pay such taxes.
(d) To the extent permitted by applicable law, the Borrower shall not
assert, and hereby waives, any claim against any Indemnitee, on any theory
of liability, for special, indirect, consequential or punitive damages (as
opposed to actual or direct damages) arising out of, in connection with or
as a result of, this Agreement or any agreement or instrument contemplated
hereby, the transactions contemplated therein, any Loan or the Letter of
Credit or the use of proceeds thereof.
(e) All amounts due under this Section shall be payable promptly after
written demand therefor.
SECTION 9.4 SUCCESSORS AND ASSIGNS.
(a) The provisions of this Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns, except that the Borrower may not assign or transfer any of its
rights hereunder without the prior written consent of the Lender (and any
attempted assignment or transfer by the Borrower without such consent shall
be null and void).
(b) The Lender may at any time assign to one or more assignees all or
a portion of its rights and obligations under this Agreement and the other
Loan Documents (including all or a portion of its Commitment and the Loans
and LC Exposure at the time owing to it); PROVIDED, that the Borrower must
give its prior written consent (which consent shall not be unreasonably
withheld or delayed) to any assignment, except an assignment to an
Affiliate of the Lender or during the
38
occurrence and continuation of a Default or an Event of Default. Upon the
execution and delivery of an assignment agreement by the Lender and such
assignee and payment by such assignee of an amount equal to the purchase
price agreed between the Lender and such assignee, such assignee shall
become a party to this Agreement and the other Loan Documents and shall
have the rights and obligations of a Lender under this Agreement, and the
Lender shall be released from its obligations hereunder to a corresponding
extent. Upon the consummation of any such assignment hereunder, the Lender,
the assignee and the Borrower shall make appropriate arrangements to have a
new Note issued to reflect such assignment.
(c) The Lender may at any time, without the consent of the Borrower,
sell participations to one or more banks or other entities (a
"PARTICIPANT") in all or a portion of the Lender's rights and obligations
under this Agreement; PROVIDED, that (i) the Lender's obligations under
this Agreement shall remain unchanged, (ii) the Lender shall remain solely
responsible to the other parties hereto for the performance of its
obligations hereunder, and (iii) the Borrower shall continue to deal solely
and directly with the Lender in connection with the Lender's rights and
obligations under this Agreement and the other Loan Documents. Any
agreement between the Lender and the Participant with respect to such
participation shall provide that the Lender shall retain the sole right and
responsibility to enforce this Agreement and the other Loan Documents and
the right to approve any amendment, modification or waiver of this
Agreement and the other Loan Documents; PROVIDED, that such participation
agreement may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, modification or waiver of this
Agreement described in the first proviso of SECTION 9.2(B) that affects the
Participant.
(d) The Lender may at any time pledge or assign a security interest in
all or any portion of its rights under this Agreement and the Note to
secure its obligations to a Federal Reserve Bank without complying with
this Section; PROVIDED, that no such pledge or assignment shall release the
Lender from any of its obligations hereunder or substitute any such pledgee
or assignee for such Lender as a party hereto.
SECTION 9.5 GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS.
(a) This Agreement and the other Loan Documents shall be construed in
accordance with and be governed by the law (without giving effect to the
conflict of law principles thereof) of the State of Tennessee.
(b) The Borrower hereby irrevocably and unconditionally submits, for
itself and its property, to the non-exclusive jurisdiction of the United
States District Court of the Middle District of Tennessee and of the
Chancery Court of Davidson County, Tennessee, and any appellate court from
any thereof, in any action or proceeding arising out of or relating to this
Agreement or any other Loan Document or the transactions contemplated
hereby or thereby, or for recognition or enforcement of any judgment, and
each of the parties hereto hereby irrevocably and
39
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such Tennessee state court or, to
the extent permitted by applicable law, such Federal court. Each of the
parties hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions
by suit on the judgment or in any other manner provided by law. Nothing in
this Agreement or any other Loan Document shall affect any right that the
Lender may otherwise have to bring any action or proceeding relating to
this Agreement or any other Loan Document against the Borrower or its
properties in the courts of any jurisdiction.
(c) The Borrower irrevocably and unconditionally waives any objection
which it may now or hereafter have to the laying of venue of any such suit,
action or proceeding described in paragraph (b) of this Section and brought
in any court referred to in paragraph (b) of this Section. Each of the
parties hereto irrevocably waives, to the fullest extent permitted by
applicable law, the defense of an inconvenient forum to the maintenance of
such action or proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to the service
of process in the manner provided for notices in SECTION 9.1. Nothing in
this Agreement or in any other Loan Document will affect the right of any
party hereto to serve process in any other manner permitted by law.
SECTION 9.6 WAIVER OF JURY TRIAL. EACH PARTY HERETO IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO
(A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 9.7 RIGHT OF SETOFF. In addition to any rights now or hereafter
granted under applicable law and not by way of limitation of any such rights,
the Lender shall have the right, at any time or from time to time upon the
occurrence and during the continuance of an Event of Default, without prior
notice to the Borrower, any such notice being expressly waived by the Borrower
to the extent permitted by applicable law, to set off and apply against all
deposits (general or special, time or demand, provisional or final) of the
Borrower at any time held or other obligations at any time owing by the Lender
to or for the credit or the account of the Borrower against any and all
Obligations held by the Lender, irrespective of whether the Lender shall have
made demand hereunder and although such Obligations may be unmatured. The Lender
agrees promptly to notify the Borrower after
40
any such set-off and any application made by the Lender; PROVIDED, that the
failure to give such notice shall not affect the validity of such set-off and
application.
SECTION 9.8 COUNTERPARTS; INTEGRATION. This Agreement may be executed by
one or more of the parties to this Agreement on any number of separate
counterparts (including by telecopy), and all of said counterparts taken
together shall be deemed to constitute one and the same instrument. This
Agreement, the other Loan Documents, and any separate letter agreement(s)
relating to any fees payable to the Lender constitute the entire agreement among
the parties hereto and thereto regarding the subject matters hereof and thereof
and supersede all prior agreements and understandings, oral or written,
regarding such subject matters.
SECTION 9.9 SURVIVAL. All covenants, agreements, representations and
warranties made by the Borrower herein and in the certificates or other
instruments delivered in connection with or pursuant to this Agreement shall be
considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of this Agreement and the making of any Loans
and issuance of any Letters of Credit, regardless of any investigation made by
any such other party or on its behalf and notwithstanding that the Lender may
have had notice or knowledge of any Default or incorrect representation or
warranty at the time any credit is extended hereunder, and shall continue in
full force and effect as long as the principal of or any accrued interest on any
Loan or any fee or any other amount payable under this Agreement is outstanding
and unpaid or any Letter of Credit is outstanding and so long as the Commitment
has not expired or terminated. The provisions of SECTIONS 2.11 and 9.3 shall
survive and remain in full force and effect regardless of the consummation of
the transactions contemplated hereby, the repayment of the Loans, the expiration
or termination of the Letters of Credit and the Commitments or the termination
of this Agreement or any provision hereof. All representations and warranties
made herein, in the certificates, reports, notices, and other documents
delivered pursuant to this Agreement shall survive the execution and delivery of
this Agreement and the other Loan Documents, and the making of the Loans.
SECTION 9.10 SEVERABILITY. Any provision of this Agreement or any other
Loan Document held to be illegal, invalid or unenforceable in any jurisdiction,
shall, as to such jurisdiction, be ineffective to the extent of such illegality,
invalidity or unenforceability without affecting the legality, validity or
enforceability of the remaining provisions hereof or thereof; and the
illegality, invalidity or unenforceability of a particular provision in a
particular jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.
SECTION 9.11 CONFIDENTIALITY. The Lender agrees to take normal and
reasonable precautions to maintain the confidentiality of any information
designated in writing as confidential and provided to it by the Borrower or any
Subsidiary, except that such information may be disclosed (i) to any Related
Party of the Lender, including without limitation accountants, legal counsel and
other advisors, (ii) to the extent required by applicable laws or regulations or
by any subpoena or similar legal process, (iii) to the extent requested by any
regulatory agency or authority, (iv) to the extent that such information becomes
publicly available other than as a result of a breach of this Section, or which
41
becomes available to the Lender or any Related Party of the Lender on a
nonconfidential basis from a source other than the Borrower, (v) in connection
with the exercise of any remedy hereunder or any suit, action or proceeding
relating to this Agreement or the enforcement of rights hereunder, and (ix)
subject to provisions substantially similar to this SECTION 9.11, to any actual
or prospective assignee or Participant, or (vi) with the consent of the
Borrower. Any Person required to maintain the confidentiality of any information
as provided for in this Section shall be considered to have complied with its
obligation to do so if such Person has exercised the degree of care to maintain
the confidentiality of such information as an ordinary Person would accord its
own confidential information.
SECTION 9.12 INTEREST RATE LIMITATION. Notwithstanding anything herein to
the contrary, if at any time the interest rate applicable to any Loan, together
with all fees, charges and other amounts which may be treated as interest on
such Loan under applicable law (collectively, the "CHARGES"), shall exceed the
maximum lawful rate of interest (the "MAXIMUM RATE") which may be contracted
for, charged, taken, received or reserved by the Lender in accordance with
applicable law, the rate of interest payable in respect of such Loan hereunder,
together with all Charges payable in respect thereof, shall be limited to the
Maximum Rate and, to the extent lawful, the interest and Charges that would have
been payable in respect of such Loan but were not payable as a result of the
operation of this Section shall be cumulated and the interest and Charges
payable to such Lender in respect of other Loans or periods shall be increased
(but not above the Maximum Rate therefor) until such cumulated amount, together
with interest thereon at the Federal Funds Rate to the date of repayment, shall
have been received by the Lender.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
BORROWER:
PANERA BREAD COMPANY
By:
-----------------------------------------
Title:
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LENDER:
SUNTRUST BANK
By:
-----------------------------------------
Title:
--------------------------------------
42
SCHEDULE 4.14
SUBSIDIARIES
Panera, Inc. 100% Borrower
ABP Midwest Manufacturing Company, Inc. 100% Borrower
Pain Francais, Inc. 100% Borrower
Panera Bread Foundation, Inc. 100% Borrower
SCHEDULE 7.1
OUTSTANDING INDEBTEDNESS
SCHEDULE 7.2
EXISTING LIENS
SCHEDULE 7.4
EXISTING INVESTMENTS
EXHIBIT A
REVOLVING CREDIT NOTE
$10,000,000 Nashville, Tennessee
December 26, 2000
FOR VALUE RECEIVED, the undersigned, PANERA BREAD COMPANY, a Delaware
corporation (the "BORROWER"), hereby promises to pay to SunTrust Bank (the
"LENDER") or its registered assigns at its principal office or any other office
that the Lender designates, on the Commitment Termination Date (as defined in
the Revolving Credit Agreement dated as of December ____, 2000 (as the same may
be amended, supplemented or otherwise modified from time to time, the "CREDIT
AGREEMENT"), between the Borrower and the Lender, the lesser of the principal
sum of TEN MILLION and no/100 Dollars ($10,000,000.00) and the aggregate unpaid
principal amount of all Loans made by the Lender to the Borrower pursuant to the
Credit Agreement, in lawful money of the United States of America in immediately
available funds, and to pay interest from the date hereof on the principal
amount thereof from time to time outstanding, in like funds, at said office, at
the rate or rates per annum and payable on such dates as provided in the Credit
Agreement. In addition, should legal action or an attorney-at-law be utilized to
collect any amount due hereunder, the Borrower further promises to pay all costs
of collection, including the reasonable attorneys' fees of the Lender.
The Borrower promises to pay interest, on demand, on any overdue principal
and, to the extent permitted by law, overdue interest from their due dates at a
rate or rates provided in the Credit Agreement.
All borrowings evidenced by this Revolving Credit Note and all payments and
prepayments of the principal hereof and the date thereof shall be endorsed by
the holder hereof on the schedule attached hereto and made a part hereof or on a
continuation thereof which shall be attached hereto and made a part hereof, or
otherwise recorded by such holder in its internal records; PROVIDED, that the
failure of the holder hereof to make such a notation or any error in such
notation shall not affect the obligations of the Borrower to make the payments
of principal and interest in accordance with the terms of this Revolving Credit
Note and the Credit Agreement.
This Revolving Credit Note is issued in connection with, and is entitled to
the benefits of, the Credit Agreement which, among other things, contains
provisions for the acceleration of the maturity hereof upon the happening of
certain events, for prepayment of the principal hereof prior to the maturity
hereof and for the amendment or waiver of certain provisions of the Credit
Agreement, all upon the terms and conditions therein specified. THIS REVOLVING
CREDIT NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF
THE STATE OF TENNESSEE AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.
PANERA BREAD COMPANY
By:
-----------------------------------------
Title:
--------------------------------------
2
LOANS AND PAYMENTS
UNPAID PRINCIPAL NAME OF PERSON
AMOUNT OF LOAN PAYMENTS OF BALANCE OF MAKING
DATE PRINCIPAL NOTE NOTATION
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EXHIBIT B
SUBSIDIARY GUARANTY AGREEMENT
SUBSIDIARY GUARANTEE AGREEMENT dated as of December 26, 2000, among
[list each of the Subsidiaries] (each such subsidiary individually, a
"GUARANTOR" and collectively, the "GUARANTORS") of PANERA BREAD COMPANY, a
Delaware corporation (the "BORROWER"), and SUNTRUST BANK, a Georgia banking
corporation (the "LENDER")
Reference is made to the Revolving Credit Agreement dated as of December
26, 2000 (as amended, supplemented or otherwise modified from time to time,
the "CREDIT AGREEMENT"), between the Borrower and the Lender. Capitalized
terms used herein and not defined herein shall have the meanings assigned to
such terms in the Credit Agreement.
The Lender has agreed to make Loans to and issue Letters of Credit for the
account of the Borrower, pursuant to, and upon the terms and subject to the
conditions specified in, the Credit Agreement. Each of the Guarantors is a
direct or indirect wholly-owned Subsidiary of the Borrower and acknowledges that
it will derive substantial benefit from the making of the Loans and the issuance
of the Letters of Credit by the Lender. The obligations of the Lender to make
Loans and to issue Letters of Credit are conditioned on, among other things, the
execution and delivery by the Guarantors of a Subsidiary Guarantee Agreement in
the form hereof. As consideration therefor and in order to induce the Lender to
make Loans and to issue Letters of Credit, the Guarantors are willing to execute
this Subsidiary Guarantee Agreement.
Accordingly, the parties hereto agree as follows:
SECTION 1. GUARANTEE. Each Guarantor unconditionally guarantees, jointly
with the other Guarantors and severally, as a primary obligor and not merely as
a surety, (a) the due and punctual payment of (i) the principal of and premium,
if any, and interest (including interest accruing during the pendency of any
bankruptcy, insolvency, receivership or other similar proceeding, regardless of
whether allowed or allowable in such proceeding) on the Loans, when and as due,
whether at maturity, by acceleration, upon one or more dates set for prepayment
or otherwise, (ii) each payment required to be made by the Borrower under the
Credit Agreement in respect of any Letter of Credit, when and as due, including
payments in respect of reimbursement or disbursements, interest thereon and
obligations to provide cash collateral, and (iii) all other monetary
obligations, including fees, costs, expenses and indemnities, whether primary,
secondary, direct, contingent, fixed or otherwise (including monetary
obligations incurred during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding), of the Loan Parties to the Lender under the
Credit Agreement and the other Loan Documents, (b) the due and punctual
performance of all covenants, agreements, obligations and liabilities of the
Loan Parties under or pursuant to the Credit Agreement and the other Loan
Documents; and (c) the due and punctual payment and performance of all
obligations of the Borrower, monetary or otherwise, under
each Hedging Agreement entered into with Lender or an Affiliate of a Lender (all
the monetary and other obligations referred to in the preceding clauses (a)
through (c) being collectively called the "OBLIGATIONS"). Each Guarantor further
agrees that the Obligations may be extended or renewed, in whole or in part,
without notice to or further assent from it, and that it will remain bound upon
its guarantee notwithstanding any extension or renewal of any Obligation.
SECTION 2. OBLIGATIONS NOT WAIVED. To the fullest extent permitted by
applicable law, each Guarantor waives presentment to, demand of payment from and
protest to the Borrower of any of the Obligations, and also waives notice of
acceptance of its guarantee and notice of protest for nonpayment. To the fullest
extent permitted by applicable law, the obligations of each Guarantor hereunder
shall not be affected by (a) the failure of the Lender to assert any claim or
demand or to enforce or exercise any right or remedy against the Borrower or any
other Guarantor under the provisions of the Credit Agreement, any other Loan
Document or otherwise or (b) any rescission, waiver, amendment or modification
of, or any release from any of the terms or provisions of, this Agreement, any
other Loan Document, any Guarantee or any other agreement, including with
respect to any other Guarantor under this Agreement.
SECTION 3. GUARANTEE OF PAYMENT. Each Guarantor further agrees that its
guarantee constitutes a guarantee of payment when due and not of collection, and
waives any right to require that any resort be had by the Lender to any balance
of any deposit account or credit on the books of the Lender in favor of the
Borrower or any other person.
SECTION 4. NO DISCHARGE OR DIMINISHMENT OF GUARANTEE. The obligations of
each Guarantor hereunder shall not be subject to any reduction, limitation,
impairment or termination for any reason (other than the indefeasible payment in
full in cash of the Obligations), including any claim of waiver, release,
surrender, alteration or compromise of any of the Obligations, and shall not be
subject to any defense or setoff, counterclaim, recoupment or termination
whatsoever by reason of the invalidity, illegality or unenforceability of the
Obligations or otherwise. Without limiting the generality of the foregoing, the
obligations of each Guarantor hereunder shall not be discharged or impaired or
otherwise affected by the failure of the Lender to assert any claim or demand or
to enforce any remedy under the Credit Agreement, any other Loan Document or any
other agreement, by any waiver or modification of any provision of any thereof,
by any default, failure or delay, willful or otherwise, in the performance of
the Obligations, or by any other act or omission that may or might in any manner
or to the extent vary the risk of any Guarantor or that would otherwise operate
as a discharge of each Guarantor as a matter of law or equity (other than the
indefeasible payment in full in cash of all the Obligations).
SECTION 5. DEFENSES OF BORROWER WAIVED. To the fullest extent permitted by
applicable law, each Guarantor waives any defense based on or arising out of any
defense of the Borrower or the unenforceability of the Obligations or any part
thereof from any cause, or the cessation from any cause of the liability of the
Borrower, other than the final and indefeasible payment in full in cash of the
Obligations. The Lender may, at its election, compromise or adjust any part of
the Obligations or make any other accommodation with the Borrower or any other
guarantor, without affecting or impairing in any way the liability
2
of any Guarantor hereunder except to the extent the Obligations have been fully,
finally and indefeasibly paid in cash. Pursuant to applicable law, each
Guarantor waives any defense arising out of any such election even though such
election operates, pursuant to applicable law, to impair or to extinguish any
right of reimbursement or subrogation or other right or remedy of such Guarantor
against the Borrower or any other Guarantor.
SECTION 6. AGREEMENT TO PAY; SUBORDINATION. In furtherance of the foregoing
and not in limitation of any other right that the Lender has at law or in equity
against any Guarantor by virtue hereof, upon the failure of the Borrower or any
other Loan Party to pay any Obligation when and as the same shall become due,
whether at maturity, by acceleration, after notice of prepayment or otherwise,
each Guarantor hereby promises to and will forthwith pay, or cause to be paid,
to the Lender in cash the amount of such unpaid Obligations. Upon payment by any
Guarantor of any sums to the Lender, all rights of such Guarantor against the
Borrower arising as a result thereof by way of right of subrogation,
contribution, reimbursement, indemnity or otherwise shall in all respects be
subordinate and junior in right of payment to the prior indefeasible payment in
full in cash of all the Obligations. In addition, any indebtedness of the
Borrower now or hereafter held by any Guarantor is hereby subordinated in right
of payment to the prior payment in full in cash of the Obligations. If any
amount shall erroneously be paid to any Guarantor on account of (i) such
subrogation, contribution, reimbursement, indemnity or similar right or (ii) any
such indebtedness of the Borrower, such amount shall be held in trust for the
benefit of the Lender and shall forthwith be paid to the Lender to be credited
against the payment of the Obligations, whether matured or unmatured, in
accordance with the terms of the Loan Documents.
SECTION 7. INFORMATION. Each Guarantor assumes all responsibility for being
and keeping itself informed of the Borrower's financial condition and assets,
and of all other circumstances bearing upon the risk of nonpayment of the
Obligations and the nature, scope and extent of the risks that such Guarantor
assumes and incurs hereunder, and agrees that the Lender will not have any duty
to advise any of the Guarantors of information known to it or any of them
regarding such circumstances or risks.
SECTION 8. REPRESENTATIONS AND WARRANTIES. Each Guarantor represents and
warrants as to itself that all representations and warranties relating to it (as
a Subsidiary of the Borrower) contained in the Credit Agreement are true and
correct.
SECTION 9. TERMINATION. The guarantees made hereunder (a) shall terminate
when all the Obligations have been paid in full in cash and the Lender has no
further commitment to lend under the Credit Agreement, the LC Exposure has been
reduced to zero and the Lender has no further obligation to issue Letters of
Credit under the Credit Agreement and (b) shall continue to be effective or be
reinstated, as the case may be, if at any time payment, or any part thereof, of
any Obligation is rescinded or must otherwise be restored by Lender or any
Guarantor upon the bankruptcy or reorganization of the Borrower, any Guarantor
or otherwise. In connection with the foregoing, the Lender shall execute and
deliver to such Guarantor or Guarantor's designee, at such Guarantor's expense,
any documents or instruments which such Guarantor shall reasonably request from
time to time to evidence such termination and release.
3
SECTION 10. BINDING EFFECT; SEVERAL AGREEMENT; ASSIGNMENTS. Whenever in
this Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the successors and assigns of such party; and all covenants,
promises and agreements by or on behalf of the Guarantors that are contained in
this Agreement shall bind and inure to the benefit of each party hereto and
their respective successors and assigns. This Agreement shall become effective
as to any Guarantor when a counterpart hereof executed on behalf of such
Guarantor shall have been delivered to the Lender, and a counterpart hereof
shall have been executed on behalf of the Lender, and thereafter shall be
binding upon such Guarantor and the Lender and their respective successors and
assigns, and shall inure to the benefit of such Guarantor, the Lender, and its
respective successors and assigns, except that no Guarantor shall have the right
to assign its rights or obligations hereunder or any interest herein (and any
such attempted assignment shall be void). If all of the capital stock of a
Guarantor is sold, transferred or otherwise disposed of pursuant to a
transaction permitted by the Credit Agreement, such Guarantor shall be released
from its obligations under this Agreement without further action. This Agreement
shall be construed as a separate agreement with respect to each Guarantor and
may be amended, modified, supplemented, waived or released with respect to any
Guarantor without the approval of any other Guarantor and without affecting the
obligations of any other Guarantor hereunder.
SECTION 11. WAIVERS; AMENDMENT. (a) No failure or delay of the Lender of
any in exercising any power or right hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power, or
any abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights of the Lender are cumulative and are not exclusive of
any rights or remedies that they would otherwise have. No waiver of any
provision of this Agreement or consent to any departure by any Guarantor
therefrom shall in any event be effective unless the same shall be permitted by
paragraph (b) below, and then such waiver and consent shall be effective only in
the specific instance and for the purpose for which given. No notice or demand
on any Guarantor in any case shall entitle such Guarantor to any other or
further notice in similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may be waived, amended
or modified except pursuant to a written agreement entered into between the
Guarantors and the Lender.
SECTION 12. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TENNESSEE.
SECTION 13. NOTICES. All communications and notices hereunder shall be in
writing and given as provided in Section 9.1 of the Credit Agreement. All
communications and notices hereunder to each Guarantor shall be given to it at
its address set forth on Schedule I attached hereto.
SECTION 14. SURVIVAL OF AGREEMENT; SEVERABILITY. (a) All covenants,
agreements representations and warranties made by the Guarantors herein and in
the certificates or
4
other instruments prepared or delivered in connection with or pursuant to this
Agreement or the other Loan Document shall be considered to have been relied
upon by the Lender and shall survive the making by the Lender of the Loans and
the issuance of the Letters of Credit regardless of any investigation made by
any of it or on its behalf, and shall continue in full force and effect as long
as the principal of or any accrued interest on any Loan or any other fee or
amount payable under this Agreement or any other Loan Document is outstanding
and unpaid or the LC Exposure does not equal zero and as long as the Commitments
have not been terminated.
(b) In the event one or more of the provisions contained in this Agreement
or in any other Loan Document should be held invalid, illegal or unenforceable
in any respect, the validity, legality and enforceability of the remaining
provisions contained herein and therein shall not in any way be affected or
impaired thereby (it being understood that the invalidity of a particular
provision in a particular jurisdiction shall not in and of itself affect the
validity of such provision in any other jurisdiction). The parties shall
endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
SECTION 15. COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall constitute an original, but all of which when taken together
shall constitute a single contract (subject to Section 10), and shall become
effective as provided in Section 10. Delivery of an executed signature page to
this Agreement by facsimile transmission shall be as effective as delivery of a
manually executed counterpart of this Agreement.
SECTION 16. RULES OF INTERPRETATION. The rules of interpretation specified
in Section 1.3 of the Credit Agreement shall be applicable to this Agreement.
SECTION 17. JURISDICTION; CONSENT TO SERVICE OF PROCESS. (a) Each Guarantor
hereby irrevocably and unconditionally submits, for itself and its property, to
the nonexclusive jurisdiction of the Chancery Court of Davidson County,
Tennessee or Federal court of the United States of America sitting in Nashville,
Tennessee, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Agreement or the other Loan Documents, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in such Tennessee State
court or, to the extent permitted by law, in such Federal court. Each of the
parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement shall
affect any right that the Lender may otherwise have to bring any action or
proceeding relating to this Agreement or the other Loan Documents against any
Guarantor or its properties in the courts of any jurisdiction.
(b) Each Guarantor hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection that it may
now or hereafter have
5
to the laying of venue of any suit, action or proceeding arising out of or
relating to this Agreement or the other Loan Documents in any Tennessee State or
Federal court. Each of the parties hereto hereby irrevocably waives, to the
fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.
(c) Each party to this Agreement irrevocably consents to service of process
in the manner provided for notices in Section 13. Nothing in this Agreement will
affect the right of any party to this Agreement to serve process in any other
manner permitted by law.
SECTION 18. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER
OR IN CONNECTION WITH THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS. EACH PARTY
HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER
PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT,
IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 18.
SECTION 19. ADDITIONAL GUARANTORS. Pursuant to Section 5.10 of the Credit
Agreement, each Subsidiary Loan Party that was not in existence on the date of
the Credit Agreement is required to enter into this Agreement as a Guarantor
upon becoming Subsidiary Loan Party. Upon execution and delivery after the date
hereof by the Lender and such Subsidiary of an instrument in the form of Annex
1, such Subsidiary shall become a Guarantor hereunder with the same force and
effect as if originally named as a Guarantor herein. The execution and delivery
of any instrument adding an additional Guarantor as a party to this Agreement
shall not require the consent of any other Guarantor hereunder. The rights and
obligations of each Guarantor hereunder shall remain in full force and effect
notwithstanding the addition of any new Guarantor as a party to this Agreement.
SECTION 20. RIGHT OF SETOFF. If an Event of Default shall have occurred and
be continuing, Lender is hereby authorized at any time and from time to time, to
the fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other Indebtedness at any time owing by such Lender to or for the credit or the
account of any Guarantor against any or all the obligations of such Guarantor
now or hereafter existing under this Agreement and the other Loan Documents held
by such Lender, irrespective of whether or not such Lender shall have made any
demand under this Agreement or any other Loan Document and although such
obligations may be unmatured. The rights of Lender under this Section 20 are in
addition to other rights and remedies (including other rights of setoff) which
such Lender may have.
6
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first above written.
[LIST EACH OF THE SUBSIDIARIES]
By:
-----------------------------------------
Title:
--------------------------------------
SUNTRUST BANK
By:
-----------------------------------------
Title:
--------------------------------------
7
ANNEX 1 TO THE
SUBSIDIARY GUARANTEE AGREEMENT
SUPPLEMENT NO. ____ dated as of ____________________, 20____, to the
Subsidiary Guarantee Agreement (the "GUARANTEE AGREEMENT") dated as of December
____, 2000 among each of the subsidiaries listed on Schedule I thereto (each
such Subsidiary individually, a "GUARANTOR" and collectively, the "GUARANTORS")
of PANERA BREAD COMPANY, a Delaware corporation (the "BORROWER"), and SUNTRUST
BANK, a Georgia banking corporation, as Lender (the "LENDER").
A. Reference is made to the Revolving Credit Agreement dated as of December
____, 2000 (as amended, supplemented or otherwise modified from time to time,
the "CREDIT AGREEMENT"), among the Borrower and the Lender. Capitalized terms
used herein and not otherwise defined herein shall have the meanings assigned to
such terms in the Credit Agreement.
B. Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to such terms in the Guarantee Agreement and the
Credit Agreement.
C. The Guarantors have entered into the Guarantee Agreement in order to
induce the Lender to make Loans and to issue Letters of Credit. Pursuant to
Section 5.11 of the Credit Agreement, each Subsidiary Loan Party that was not in
existence or not a Subsidiary Loan Party on the date of the Credit Agreement is
required to enter into the Guarantee Agreement as a Guarantor upon becoming a
Subsidiary Loan Party. Section 19 of the Guarantee Agreement provides that
additional Subsidiaries of the Borrower may become Guarantors under the
Guarantee Agreement by execution and delivery of an instrument in the form of
this Supplement. The undersigned Subsidiary of the Borrower (the "NEW
GUARANTOR") is executing this Supplement in accordance with the requirements of
the Credit Agreement to become a Guarantor under the Guarantee Agreement in
order to induce the Lender to make additional Loans and to issue additional
Letters of Credit and as consideration for Loans previously made and Letters of
Credit previously issued.
Accordingly, the Lender and the New Guarantor agree as follows:
SECTION 1. In accordance with Section 19 of the Guarantee Agreement, the
New Guarantor by its signature below becomes a Guarantor under the Guarantee
Agreement with the same force and effect as if originally named therein as a
Guarantor and the New Guarantor hereby (a) agrees to all the terms and
provisions of the Guarantee Agreement applicable to it as Guarantor thereunder
and (b) represents and warrants that the representations and warranties made by
it as a Guarantor thereunder are true and correct on and as of the date hereof.
Each reference to a Guarantor in the Guarantee Agreement shall be deemed to
include the New Guarantor. The Guarantee Agreement is hereby incorporated herein
by reference.
SECTION 2. The New Guarantor represents and warrants to the Lender that
this Supplement has been duly authorized, executed and delivered by it and
constitutes its legal, valid and binding obligation, enforceable against it in
accordance with its terms.
SECTION 3. This Supplement may be executed in counterparts each of which
shall constitute an original, but all of which when taken together shall
constitute a single contract. This Supplement shall become effective when the
Lender shall have received counterparts of this Supplement that, when taken
together, bear the signatures of the New Guarantor and the Lender. Delivery of
an executed signature page to this Supplement by facsimile transmission shall be
as effective as delivery of a manually signed counterpart of this Supplement.
SECTION 4. Except as expressly supplemented hereby, the Guarantee Agreement
shall remain in full force and effect.
SECTION 5. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF TENNESSEE.
SECTION 6. In case any one or more of the provisions contained in this
Supplement should be held invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein and in the Guarantee Agreement shall not in any way be affected or
impaired thereby (it being understood that the invalidity of a particular
provision hereof in a particular jurisdiction shall not in and of itself affect
the validity of such provision in any other jurisdiction). The parties hereto
shall endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
SECTION 7. All communications and notices hereunder shall be in writing and
given as provided in Section 13 of the Guarantee Agreement. All communications
and notices hereunder to the New Guarantor shall be given to it at the address
set forth under its signature below, with a copy to the Borrower.
SECTION 8. The New Guarantor agrees to reimburse the Lender for its
out-of-pocket expenses in connection with this Supplement, including the fees,
disbursements and other charges of counsel for the Lender.
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IN WITNESS WHEREOF, the New Guarantor and the Lender have duly executed
this Supplement to the Guarantee Agreement as of the day and year first above
written.
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By:
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Title:
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SUNTRUST BANK
By:
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Title:
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