Exhibit 4.5
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FACILITIES AGREEMENT
dated as of December 9, 1996
among
BOSTON CHICKEN, INC.,
BANK OF AMERICA ILLINOIS,
As Agent For Certain Lenders,
and
GENERAL ELECTRIC CAPITAL CORPORATION,
For Itself And As Agent For Certain Lease Participants
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The following Table of Contents has been inserted for convenience only and does
not constitute a part of this Agreement.
TABLE OF CONTENTS
PAGE
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ARTICLE I DEFINITIONS AND ACCOUNTING TERMS 2
1.1. Defined Terms................................................. 2
1.2. Accounting Terms.............................................. 13
ARTICLE II REPRESENTATIONS AND WARRANTIES................... 13
2.1. Incorporation, Good Standing, and Due Qualification........... 13
2.2. Corporate Power and Authority................................. 14
2.3. Legally Enforceable Agreement................................. 14
2.4. Financial Statements.......................................... 14
2.5. Other Agreements.............................................. 15
2.6. Litigation.................................................... 15
2.7. No Defaults on Outstanding Judgments or Orders................ 16
2.8. Governmental and Regulatory Approvals......................... 16
2.9. Ownership and Liens........................................... 16
2.10. Subsidiaries etc............................................. 16
2.11. ERISA........................................................ 16
2.12. Stores....................................................... 17
2.13. Hazardous Materials.......................................... 17
2.14. Taxes........................................................ 17
2.15. Debt......................................................... 18
2.16. Financed Franchisee Information.............................. 18
2.17. Investment Company Act....................................... 18
2.18. Public Utility Holding Company Act........................... 18
ARTICLE III AFFIRMATIVE COVENANTS............................ 19
3.1. Maintenance of Existence...................................... 19
3.2. Maintenance of Records........................................ 19
3.3. Maintenance of Properties..................................... 19
3.4. Conduct of Business........................................... 19
3.5. Maintenance of Insurance...................................... 20
3.6. Compliance With Laws.......................................... 20
3.7. Right of Inspection........................................... 20
3.8. Reporting Requirements........................................ 20
3.9. Environmental Laws............................................ 26
3.10. Credit Usage................................................. 26
ARTICLE IV NEGATIVE COVENANTS.............................. 27
4.1. Liens......................................................... 27
4.2. Debt.......................................................... 30
4.3. Mergers, Etc.................................................. 31
4.4. Leases........................................................ 32
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PAGE
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4.5. Sale and Leaseback............................................. 33
4.6. Dividends...................................................... 33
4.7. Sale of Assets................................................. 34
4.8. Investments.................................................... 35
4.9. Guaranties, Etc................................................ 38
4.10. Transactions With Affiliate................................... 39
4.11. Subsidiary, Etc............................................... 39
4.12. Real Property................................................. 40
4.13. Subordinated Debt............................................. 40
4.14. Financed Franchisee........................................... 41
ARTICLE V FINANCIAL COVENANTS............................... 41
5.1. Maximum Senior Secured Leverage Ratio.......................... 41
5.2. Maximum Leverage Ratio......................................... 42
5.3. Fixed Charge Coverage Ratio.................................... 42
5.4. Store Revenue.................................................. 42
ARTICLE VI EVENTS OF DEFAULT................................ 42
6.1. Events of Default.............................................. 42
6.2. Effect of Event of Default..................................... 46
ARTICLE VII MISCELLANEOUS.................................. 46
7.1. Waivers and Amendments......................................... 46
7.2. Notices, Etc................................................... 46
7.3. No Waiver; Remedies............................................ 46
7.4. Successors and Assigns......................................... 47
7.5. Costs, Expenses, and Taxes..................................... 47
7.6. Governing Law.................................................. 47
7.7. Severability of Provisions..................................... 47
7.8. Headings....................................................... 47
7.9. SUBMISSION TO JURISDICTION; WAIVER OF VENUE.................... 47
7.10. General Indemnity............................................. 48
7.11. WAIVER OF JURY TRIAL.......................................... 49
7.12. SERVICE OF PROCESS............................................ 49
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SCHEDULES
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Schedule I - Subsidiaries ((S)2.10)
Schedule II - Stores ((S)2.12)
Schedule IIIA - Debt ((S)2.15)
Schedule IIIB - Permitted Debt ((S)4.2)
Schedule IV - Financed Franchisee Information ((S)2.16)
Schedule V - Requirements for Financed Franchisee Loan
Documents ((S)1.1)
Schedule VI - BWRE Parcels ((S)1.1)
EXHIBITS
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EXHIBIT A - Guaranty
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FACILITIES AGREEMENT
THIS FACILITIES AGREEMENT dated as of December 9, 1996 is among BOSTON
CHICKEN, INC., a Delaware corporation (the "Company"), BANK OF AMERICA ILLINOIS,
as agent for the Lenders and the Issuing Lender referred to below (in such
capacity, together with its successors and assigns, the "Loan Agent"), and
GENERAL ELECTRIC CAPITAL CORPORATION, for itself and as agent for the Lease
Participants referred to below (in its individual capacity, "GECC"; and in such
dual capacity, together with its successors and assigns, the "Lease Agent").
WHEREAS, concurrently herewith the Company is entering into that
certain Secured Revolving Credit Agreement dated as of even date herewith (as
amended, supplemented, modified, restated, refinanced, refunded or renewed from
time to time in accordance with the terms of the Intercreditor Agreement
referred to below, the "Credit Agreement") among the Company, the financial
institutions from time to time party thereto (the "Lenders"), Bank of America
Illinois, as letter of credit issuing bank (in such capacity, the "Issuing
Lender"), and the Loan Agent;
WHEREAS, concurrently herewith the Company is entering into that
certain Master Lease Agreement No. 2, dated as of even date herewith (as
amended, supplemented, modified, restated, refinanced, refunded or renewed from
time to time in accordance with the terms of the Intercreditor Agreement
referred to below, the "1996 Master Lease Agreement") between the Company and
the Lease Agent;
WHEREAS, on the date hereof and/or from time to time hereafter,
subject to the terms of the 1996 Master Lease Agreement, GECC may convey to
certain financial institutions (collectively with GECC, the "Lease
Participants") participation interests in its rights, duties and obligations
under the 1996 Master Lease Agreement; and
WHEREAS, concurrently herewith the Company, the Loan Agent and the
Lease Agent are entering into that certain Intercreditor Agreement dated as of
even date herewith (the "Intercreditor Agreement") which sets forth certain
agreements among the Lenders, the Issuing Lender, the Loan Agent, the Lease
Agent and the Lease Participants with respect to, among other things, voting
rights and collateral issues.
NOW, THEREFORE, in consideration of the mutual promises herein
contained and for other good and valuable consideration, the parties hereto
agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
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SECTION 1.1. Defined Terms. As used in this Agreement the following
terms have the following meanings (terms defined in the singular to have the
same meaning when used in the plural and vice versa):
"Affiliate" means any Person other than a Financed Franchisee: (1)
which directly or indirectly controls, or is controlled by, or is under common
control with, the Company or a Subsidiary; (2) which directly or indirectly
beneficially owns or holds, at the time of determination, outstanding shares
representing ten percent (10%) or more of any class of capital stock,
partnership units or other equity interests of the Company or any Subsidiary
(including, on a fully diluted basis, any options, warrants and other rights to
acquire capital stock, partnership units or other equity interests which are
exercisable at the time of determination, but excluding any options, warrants
and other rights to acquire capital stock, partnership units or other equity
interests which are not then exercisable); or (3) ten percent (10%) or more of
the capital stock, partnership units or other equity interests of which
(calculated in accordance with the foregoing clause (2)) is directly or
indirectly beneficially owned or held by the Company or a Subsidiary. For
purposes of this definition only, the term control means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership of voting
securities, by contract, or otherwise; provided, that for purposes hereof, the
existence of a Franchise Agreement, Area Development Agreement or similar
agreement between the Company and a Person shall not, by itself, evidence that
such Person is controlled by the Company nor shall the Financed Franchisee Loan
Documents executed by a Franchisee evidence that such Franchisee is an Affiliate
of the Company prior to the acquisition by the Company of an equity interest
therein of in excess of ten percent (10%), whether such acquisition occurs by
conversion of debt, exercise of any equity option, or otherwise (including
acquisition by foreclosure following an acceleration under the Financed
Franchisee Loan Documents).
"Agency Agreement" means that certain Agency Agreement dated as of
September 25, 1996 among the Lease Agent, the Company, BC Real Estate
Investments, Inc. and certain Financed Franchisees.
"Agents" means, collectively, the Loan Agent and the Lease Agent; and
"Agent" means the Loan Agent or the Lease Agent.
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"Agreement" means this Facilities Agreement, as amended, supplemented,
modified, restated, refinanced, refunded or renewed from time to time in
accordance with the Intercreditor Agreement.
"Annualized EBITDAL" means, for each fiscal quarter of the Company the
product of (1)(a) the quotient obtained by dividing EBITDAL for such fiscal
quarter by (b) the number of Retail Periods which occur in such fiscal quarter,
multiplied by (2) thirteen (13).
"Business Day" means any day other than a Saturday, Sunday, or other
day on which commercial banks are authorized or required to close under the laws
of the States of Colorado, Illinois or New York.
"BWRE" means Boston West Real Estate Investments, L.L.C., a Delaware
limited liability company.
"BWRE Guaranty" means that certain Guaranty dated February 16, 1996 of
the Company in favor of Sanwa Business Credit Corporation, as the same may be
amended from time to time.
"BWRE Parcels" means those certain parcels of real property and
improvements located thereon, the locations of which are set forth on Schedule
VI hereto.
"Capital Lease" means all leases which have been or should be
capitalized on the books of the lessee in accordance with GAAP.
"Change of Control" shall be deemed to have occurred at such time
after the date hereof as (i) any person or group of persons (within the meaning
of Section 13 or 14 of the Exchange Act) shall acquire at any time after the
date hereof beneficial ownership of more than 25% of the fully diluted common
stock of the Company or (ii) individuals who as of the date hereof constitute
the Company's Board of Directors (together with any new director whose election
by the Company's stockholders was approved by a vote of at least two-thirds of
the directors then still in office who either were directors at the beginning of
such period or whose election or nomination for election was previously so
approved), for any reason, cease to constitute a majority of the directors at
any time then in office.
"Code" means the Internal Revenue Code of 1986, as amended.
"Consolidated Fixed Charges" means, for any period, the sum of cash
interest expense (including all imputed interest
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related to any Capital Lease) plus gross rental payments (excluding, in any
event, payments of purchase amounts under Financial Lease Debt) related to any
Financial Leases other than Capital Leases of the Company and its consolidated
Restricted Subsidiaries for such period.
"Credit Agreement" has the meaning set forth in the Recitals.
"Credit Documents" means, collectively, this Agreement, the Loan
Documents, the 1996 Lease Documents and the Intercreditor Agreement; and "Credit
Document" means any of the foregoing agreements, instruments or documents.
"Creditors" means, collectively, the Loan Agent, the Lenders, the
Issuing Lender, the Lease Agent and the Lease Participants; and "Creditor" means
any of the foregoing Persons.
"Current Pay Subordinated Debt" means Debt of the Company which (1) is
subordinated in priority of payment to the Debt of the Company under the Loan
Documents and the 1996 Lease Documents (including refinancings of and post-
petition interest on the Credit Documents); (2) does not have any principal
payment (but may provide for interest payments) prior to the ninety-first (91st)
day succeeding the Termination Date; (3) contains no financial maintenance
covenants other than (a) one or more financial maintenance covenants which are
substantially identical to those contained in this Agreement, provided that such
financial maintenance covenants are less restrictive than the corresponding
covenants contained in this Agreement and (b) such other financial maintenance
covenants which are reasonably acceptable to the Required Creditors; (4)
contains no cross default clause but may contain a cross acceleration clause;
(5) contains no negative pledge clause (other than any such clause that does not
prohibit or otherwise restrict Liens securing Debt under the Credit Documents);
(6) distinguishes between payment and non-payment defaults for purposes of
suspending payments with respect to such subordinated Debt; and (7) contains a
"fish or cut bait" provision with respect to non-payment defaults of at least 89
days (it being understood that the Company's 4 1/2% Convertible Subordinated
Debentures due 2004 constitute Current Pay Subordinated Debt).
"Debt" means with respect to any Person at any date, without
duplication: (1) indebtedness or liability for borrowed money, or for the
deferred purchase price of property or services (including trade obligations)
owed by such Person; (2) obligations of such Person as lessee under Financial
Leases; (3) current liabilities of such Person in respect of unfunded vested
benefits under any Plan; (4) obligations under letters of credit
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issued for the account of such Person; (5) all obligations arising under
bankers' acceptance facilities issued for the account of such Person; (6) all
guaranties by such Person of the Debt or of operating leases of a third party,
endorsements (other than for collection or deposit in the ordinary course of
business), and other contingent obligations of such Person to purchase primarily
for the purpose of enabling a third party to make payment of Debt or payments
with respect to operating leases of such third party, to provide funds for
payment of the Debt or of operating leases of a third party, to supply funds to
invest in a third party, or otherwise to assure a creditor of a third party
against loss with respect to the Debt or operating leases of such third party;
and (7) obligations secured by any Lien on property owned by such Person,
whether or not the obligations have been assumed.
"Default" means any of the events specified in Section 6.1, whether or
not any requirement for the giving of notice, the lapse of time, or both, or any
other condition, has been satisfied.
"Denver Support Center" means the approximately 16 acre parcel of real
property and improvements thereon, located in Jefferson County, Colorado and
commonly known as 14103 and ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇.
"EBITDAL" means, for each fiscal period of the Company, the
consolidated pre-tax, pre-minority interest earnings of the Company and its
consolidated Restricted Subsidiaries plus the aggregate amounts actually
deducted in determining such net earnings of such period in respect of (1) gross
interest charges (including all accrued and unpaid interest on any
indebtedness), (2) imputed interest charges related to any Capital Leases, (3)
gross rental payments (excluding, in any event, payments of purchase amounts
under Financial Lease Debt) related to any Financial Leases other than Capital
Leases and (4) provisions for amortization and depreciation.
"ENBC" means Einstein/Noah Bagel Corp., a Delaware corporation.
"ENBC Credit Agreement" means that certain Secured Credit Agreement
dated as of May 17, 1996 among ENBC, the lenders from time to time party thereto
and Bank of America Illinois, as agent for such lenders, as the same may be
amended, modified or restated from time to time.
"ENBC Event of Default" means any "Event of Default" as such term is
defined in the ENBC Credit Agreement.
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"Environmental Laws" means any and all federal, state, local laws,
regulations, ordinances, rules, judgments, orders, decrees, permits,
concessions, grants, franchises, licenses, agreements or other governmental
restrictions relating to the environment or to emissions, discharges, releases
or threatened releases of pollutants, contaminants, chemicals, or industrial,
toxic or hazardous substances or wastes into the environment including, without
limitation, ambient air, surface water, ground water, or land, or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport, or handling of pollutants, contaminants, chemicals, or
industrial, toxic or hazardous substances or wastes.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations and published governmental
interpretations thereof.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) which together with the Company would be treated as a single
employer under Section 414(b) or (c) of the Code.
"Event of Default" means any of the events specified in Section 6.1;
provided, that any requirement for the giving of notice, the lapse of time, or
both, or any other condition, has been satisfied.
"Financed Franchisee" means any Franchisee (other than a Subsidiary)
which has duly executed and delivered Financed Franchisee Loan Documents.
"Financed Franchisee Loan Documents" means loan documents entered into
between the Company, as lender, and a Franchisee, as borrower, which, taken as a
whole, meet each of the requirements set forth on Schedule V.
"Financed Subsidiary" means any Restricted Subsidiary which (1) is a
Franchisee and (2) was formerly a Financed Franchisee.
"Financed Subsidiary Loan Documents" means loan documents entered into
between the Company, as lender, and a Financed Subsidiary, as borrower, which
provide for loans that are secured by a perfected Lien (subject only to the
types of Liens described in clauses (1) through (10) of Section 4.1) on all of
the assets of the Financed Subsidiary including, without limitation, all real
and personal property of such Financed Subsidiary and all leasehold interests of
such Financed Subsidiary (unless after such Financed Subsidiary's best efforts
(which shall not require unreasonable efforts) such Financed
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Subsidiary is unable to obtain the consent of the respective landlord for such
leasehold to the extent such consent is required) but excluding any assets
subject to any Sublease; it being understood that such loan documents may permit
the Company to subordinate the indebtedness evidenced by such loan documents and
its perfected Lien securing such indebtedness to the loan and Lien of a third
party lender (to the extent such third party loan is permitted pursuant to
Section 4.2(6)), provided, that the Company shall not agree to subordinate to
the loan and Lien of such third party lender (a) any of its rights of payment
from the Financed Subsidiary arising with respect to royalties, leases or
software or (b) prior to a payment default under the indebtedness owed by such
Financed Subsidiary to a third party lender, the interest payments on the
indebtedness evidenced by such loan documents.
"Financial Lease" means with respect to any Person at any date, any
Capital Lease of such Person and any operating lease of such Person entered into
outside of the ordinary course of business (including without limitation, the
Master Leases).
"Financial Lease Debt" means, as of any date, (1) with respect to any
Capital Lease under which the Company or any of its Restricted Subsidiaries is
the lessee, the principal amount thereof as of such date as determined in
accordance with GAAP; (2) with respect to the 1996 Master Lease Agreement and
the 1995 Master Lease Agreement, the termination value (as defined therein) as
of such date; and (3) with respect to any other Financial Lease under which the
Company or any of its Restricted Subsidiaries is the lessee, the present value
(using a market rate of interest) as of such date of all remaining rental
payments of the Company or such Restricted Subsidiary under such Financial
Leases.
"Franchisee" means any Person (excluding the Company but including any
Subsidiary) who is party to a then existing Franchise Agreement, Area
Development Agreement or similar agreement with the Company or who is otherwise
authorized to operate a Store.
"GAAP" means generally accepted accounting principles in the United
States applied by the Company consistent with past practice (subject to changes
in accounting policies permitted by such generally accepted accounting
principles which have been or are contemporaneously disclosed in writing to each
Agent).
"GECC" has the meaning set forth in the Preamble.
"Guarantor" means any Restricted Subsidiary which from time to time
executes a Guaranty.
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"Guaranty" means a guaranty issued by a Restricted Subsidiary in favor
of either the Loan Agent for the benefit of the Lenders or in favor of the Lease
Agent for the benefit of GECC and the Participants, in each case in
substantially the form of Exhibit A.
"Indemnity" has the meaning set forth in Section 7.10.
"Intercreditor Agreement" has the meaning set forth in the Recitals.
"Issuing Lender" has the meaning set forth in the Recitals.
"Investment" means, with respect to any Person, any loan or advance to
such Person, any purchase or other acquisition of any capital stock, obligations
or other securities of such Person, any capital contribution to such Person or
any other investment in or acquisition of any interest in such Person.
"Lease Agent" has the meaning set forth in the Preamble.
"Lease Participants" has the meaning set forth in the Recitals.
"Lenders" or "Lender" shall have the meaning assigned to such term in
the Recitals and shall include Bank of America Illinois while acting in the
capacity of a Lender, unless otherwise expressly indicated herein.
"Lien" means any mortgage, deed of trust, pledge, security interest,
hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or
other), or preference, priority, or other security agreement, or preferential
arrangement, charge, or encumbrance of any kind or nature whatsoever (including,
without limitation, any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing, and the filing of any financing statement under the Uniform
Commercial Code or comparable law of any jurisdiction to evidence any of the
foregoing).
"Loan Agent" has the meaning set forth in the Preamble.
"Loan Documents" has the meaning assigned thereto in the Credit
Agreement (as the same may be amended, supplemented, modified, reinstated,
refinanced, refunded or renewed from time to time in accordance with the terms
of the Intercreditor Agreement).
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"Master Lease" means either the 1995 Master Lease Agreement or the
1996 Master Lease Agreement; and "Master Leases" means both the 1995 Master
Lease Agreement and the 1996 Master Lease Agreement.
"Material Adverse Change" means a material adverse change in the
condition (financial or otherwise), business, operations or prospects of the
Company and its Restricted Subsidiaries, taken as a whole.
"Multiemployer Plan" means a Plan described in Section 4001(a)(3) of
ERISA and covered by Title IV of ERISA which covers employees of the Company or
any ERISA Affiliate.
"1995 Lease Documents" means the 1995 Master Lease Agreement, the
associated Subleases and all documents ancillary to the foregoing; provided,
that the term "1995 Lease Documents" shall not include any amendment or other
modification thereto (other than Permitted Changes) without the prior written
consent of the Required Creditors.
"1995 Master Lease Agreement" means that certain Master Lease
Agreement dated as of September 27, 1995 between the Company and GECC for itself
and as agent for certain participants, as amended by certain amendments dated
September 28, 1995 and as of even date herewith; provided that the term "1995
Master Lease Agreement" shall not include any amendment or other modification
thereto (other than Permitted Changes) without the prior written consent of the
Required Creditors.
"1996 Master Lease Agreement" has the meaning set forth in the
Recitals.
"1996 Lease Documents" means the 1996 Master Lease Agreement, the
associated Subleases, the respective Guaranties, the Facilities Agreement, the
Agency Agreement and all other agreements, instruments and documents (including,
without limitation, mortgages, deeds of trust, chattel mortgages and security
agreements) delivered from time to time to GECC with respect to the foregoing
(as amended, supplemented, modified, restated, refinanced, refunded or renewed
from time to time in accordance with the terms of the Intercreditor Agreement).
"Non-Current Pay Subordinated Debt" means Debt of the Company which
(1) is subordinated in priority of payment to the Debt of the Company under the
Loan Documents, the 1995 Lease Documents and the 1996 Lease Documents (including
refinancings of and post-petition interest on the Credit Documents); (2) does
not have its (a) any interest payment prior to the earlier to occur of the third
anniversary of the date such Debt is issued or the
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ninety-first (91st) day succeeding the Termination Date or (b) any principal
payment prior to the ninety-first (91st) day succeeding the Termination Date;
(3) contains no financial maintenance covenants other than (a) one or more
financial maintenance covenants which are substantially identical to those
contained in this Agreement, provided that such financial maintenance covenants
are less restrictive than the corresponding covenants contained in this
Agreement and (b) such other financial maintenance covenants which are
reasonably acceptable to the Required Creditors; (4) contains no cross-default
clause but may contain a cross-acceleration clause; (5) contains no negative
pledge clause (other than any such clause that does not prohibit or otherwise
restrict Liens securing Debt of the Company or any Guarantor under the Credit
Documents); (6) distinguishes between payment and non-payment defaults for
purposes of suspending payments with respect to such subordinated debt; and (7)
contains a "fish or cut bait" provision with respect to non-payment defaults of
at least 89 days.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Permitted Changes" means (i) waivers in the ordinary course of
business, (ii) amendments and modifications necessary or appropriate to reflect
additions and changes to the assets and related rental obligations covered by
the 1995 Master Lease Agreement and the associated Subleases, as contemplated by
the respective 1995 Lease Documents, (iii) amendments and modifications effected
in connection with the waiver of a default in payment obligations of the Company
under the 1995 Master Lease Agreement, which amendments and modifications would
not constitute or result in a failure of the Company to perform or observe any
term, covenant or agreement in the Credit Documents as in effect immediately
prior to the effectiveness of such amendments or modifications and (iv) other
amendments and modifications that do not change the substance of the
transactions contemplated by the 1995 Lease Documents taken as a whole.
"Person" means an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, governmental authority, or other entity of whatever
nature.
"Plan" means any plan (as defined in Section 3(3) of ERISA and covered
by ERISA) established, maintained, or to which contributions have been made by
the Company or any ERISA Affiliate, which definition, as of the date hereof, the
Company believes does not encompass the following arrangements:
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Company's Amended and Restated 1991 Employee Stock Option Plan, Company's
Amended and Restated 1991 Stock Option Plan for Non-Employee Directors, as
amended, Company's 1995 Employee Stock Option Plan and its deferred compensation
to market partners, managing partners or others pursuant to similar agreements.
"Pledge Agreement" has the meaning assigned thereto in the Credit
Agreement.
"Prohibited Transaction" means any non-exempt transaction set forth in
Section 406 of ERISA or Section 4975 of the Code.
"Reportable Event" means any of the events set forth in Section 4043
of ERISA other than those events as to which the 30-day notice period is waived
under the regulations thereunder.
"Required Creditors" means Creditors sufficient to amend this
Agreement in accordance with the Intercreditor Agreement.
"Restricted Subsidiary" means, with respect to the Company, any
Subsidiary other than ENBC.
"Retail Period" means any of the thirteen consecutive four-week
periods used by the Company for accounting purposes which begin on or about the
Monday after the last Sunday in December of each year and ending on the last
Sunday in December of the next year.
"Revolving Notes" shall have the meaning assigned thereto in the
Credit Agreement.
"Senior Secured Indebtedness" means, at any time, the aggregate
principal amount of revolving loans and letter of credit obligations (including,
without limitation, the unreimbursed amount of any draws under the letters of
credit) then outstanding under the Credit Agreement plus the aggregate amount of
all Financial Lease Debt then outstanding.
"Significant Subsidiary" means a Restricted Subsidiary which would be
a "significant subsidiary" under either clause (2) or clause (3) of the
definition of "significant subsidiary" in Rule 1-02 of Regulation S-X under the
Securities Act of 1933 and the Securities Exchange Act of 1934, as amended, as
such Regulation is in effect on the date hereof, assuming that the Company is
the "registrant" referred to in such definition.
"Special Purpose Subsidiary" means any Restricted Subsidiary (which is
not a Franchisee): (1) of which the Company
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owns, directly or indirectly through one or more intermediaries, or both, all of
the issued and outstanding voting stock, general partner's interests or other
equity interests having ordinary voting power to elect the board of directors or
other managers of such Restricted Subsidiary; (2) which has executed and
delivered to each of the Loan Agent and the Lease Agent a Guaranty; and (3) the
only assets of which are real property, leases of real property (in which such
Restricted Subsidiary is the landlord) to the extent permitted by Section 4.7 or
general partner interests in Financed Subsidiaries.
"Store" means a retail food service outlet operating under the
tradename of "Boston Market" or "Boston ▇▇▇▇▇▇."
"Subleases" means subleases of equipment and/or real property entered
into between the Company, as lessor, and a Franchisee, as lessee, pursuant to
any Master Lease.
"Subordinated Debt" means Current Pay Subordinated Debt and Non-
Current Pay Subordinated Debt.
"Subsidiary" means, as to the Company, a Person (other than an
individual) of which shares of stock, partnership units or other equity
interests having ordinary voting power (other than shares having such power only
by reason of the happening of a contingency) to elect a majority of the board of
directors or other managers of such Person are at the time owned, directly or
indirectly through one or more intermediaries, or both, by the Company. For
purposes hereof, the existence of a Franchise Agreement, Area Development
Agreement or similar agreement between the Company and a Person shall not, by
itself, evidence that such Person is controlled by the Company, nor shall the
Financed Franchisee Loan Documents executed by a Franchisee evidence such
control prior to the acquisition by the Company of an equity interest therein
having power to elect or control the majority of the board of directors or other
managers of the Financed Franchisee, whether such acquisition occurs by
conversion of debt, exercise of any equity option, or otherwise, including upon
acceleration under the Financed Franchisee Loan Documents.
"Termination Date" means the date upon which no Debt of the Company or
any Guarantor shall be outstanding under any of the Credit Documents and no
Creditor has any contractual obligations under any Credit Document to extend
credit of any nature to the Company.
"Total Indebtedness" means at any date, without duplication, the sum
of (1) indebtedness for borrowed money of the Company and its consolidated
Restricted Subsidiaries (other
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than (a) the Debt of the Company evidenced by that certain Liquid Yield Option
Notes due 2015 issued by the Company on June 1, 1996, 1995 and (b) any Non-
Current Pay Subordinated Debt); plus (2) obligations of the Company and its
consolidated Restricted Subsidiaries as lessee under Financial Lease Debt; plus
(3) obligations of the Company and its consolidated Restricted Subsidiaries
under letters of credit issued and/or outstanding for the account of such party;
plus (4) all obligations of the Company and its consolidated Restricted
Subsidiaries arising under bankers' acceptance facilities issued for the account
of such party; plus (5) 20% of the notional amount of all derivative instruments
of the Company and its consolidated Restricted Subsidiaries; plus (6) all
guarantees by the Company and its consolidated Restricted Subsidiaries, of
indebtedness and other obligations of the type set forth in the foregoing
clauses (1) through (5); plus (7) the aggregate amount of payments due during
the Company's fiscal year in which such date occurs under all real property
leases of Franchisees which are guaranteed by the Company or any of its
consolidated Restricted Subsidiaries.
"Unrestricted Subsidiary" means ENBC.
SECTION 1.2. Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with GAAP
consistent with that applied in the preparation of the financial statements
referred to in Section 2.4, and all financial data prepared by the Company and
submitted pursuant to this Agreement shall be prepared in accordance with such
principles except for the financial data submitted pursuant to Section 3.8(1)
and such other financial data which the Company expressly states has not been
prepared in accordance with such principles.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
------------------------------
The Company represents and warrants to the Creditors that:
SECTION 2.1. Incorporation, Good Standing, and Due Qualification.
The Company and each of its Restricted Subsidiaries: (1) is a corporation,
partnership or limited liability company, as the case may be, duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization or formation; (2) has the power and authority and has all material
governmental licenses, authorizations, consents and approvals necessary to own
its assets and to transact the business in which it is now engaged or proposed
to
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be engaged; and (3) is duly qualified as a foreign corporation, partnership or
limited liability company, as the case may be, and in good standing under the
laws of each other jurisdiction in which the failure to so qualify would result
in a Material Adverse Change.
SECTION 2.2. Corporate Power and Authority. The execution,
delivery, and performance by the Company and each Guarantor of each of the
Credit Documents to which it is a party and the granting by the Company and each
Guarantor of Liens pursuant to the Credit Documents have been duly authorized by
all necessary corporate or other constitutional action on the part of the
Company or such Guarantor, as the case may be, and do not and will not (1)
contravene or conflict with the organizational documents of the Company or such
Guarantor; (2) violate any provision of, or cause the Company or such Guarantor
to be in default under, any law, rule, regulation (including, without
limitation, Regulation U of the Board of Governors of the Federal Reserve
System), order, writ, judgment, injunction, decree, determination, or award
currently in effect having applicability to the Company or such Guarantor; (3)
result in a breach of, or constitute a default under, any material indenture or
loan or credit agreement or any other material agreement, lease, or instrument
to which the Company or such Guarantor is a party or by which it or its
properties may be bound or affected; or (4) result in, or require, the creation
or imposition of any Lien (except as permitted pursuant to Section 4.1), upon or
with respect to any of the properties now owned or hereafter acquired by the
Company or such Guarantor.
SECTION 2.3. Legally Enforceable Agreement. This Agreement is, and
each of the other Credit Documents will be, legal, valid, and binding
obligations of the Company and each of the Guarantors (to the extent they are
parties to such Credit Documents) enforceable against the Company and such
Guarantor (as applicable) in accordance with their respective terms, except to
the extent that such enforcement may be limited by applicable bankruptcy,
insolvency, and other similar laws affecting creditors' rights generally and by
general principles of equity.
SECTION 2.4. Financial Statements. The Company's audited
consolidated financial statements as at December 31, 1995 (the "Audited
Statements") and its unaudited consolidated financial statements as at October
6, 1996, ("Unaudited Statements") have been furnished to each Creditor. The
Audited Statements have been prepared in conformity with GAAP and fairly present
the financial condition of the Company and its Subsidiaries as at such dates and
the results of operations for the periods then ended. The Unaudited Statements
have been prepared in a manner consistent (except for changes in accounting
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policies permitted by GAAP which have been or are contemporaneously disclosed in
writing to each Creditor) with the Audited Statements, except for the lack of
normal year-end accruals, reclassifications, and audit adjustments and financial
statement footnotes. Since the date of the most recent financial statements
supplied to each Creditor pursuant to either Section 3.8(2) or (3), whichever is
the most recently delivered, there has been no Material Adverse Change. No
information, exhibit, or report furnished by the Company to the Creditors in
connection with the negotiation of this Agreement, considered as a whole with
all other information, exhibits and reports furnished to the Creditors in
connection with the negotiation of this Agreement at the time it was furnished
(and as modified or superseded by any information, exhibits and reports
subsequently furnished to the Creditors), contained any material misstatement of
fact or omitted to state a material fact necessary to make the statements
contained therein, in light of the circumstances in which they were made, not
materially misleading; provided, that except as expressly provided below, the
Company makes no representation, warranty, or guaranty as to (1) any projections
furnished to the Creditors (it being understood that such projections have been
prepared by management of the Company on the basis of assumptions which such
management believed were reasonable as of the date of such projections in light
of the historical financial performance of the business of the Company and of
current and reasonably foreseeable business conditions) or (2) any information
supplied by Franchisees or contained in analyst reports or other reports
prepared by third parties or derived therefrom unless in the case of this clause
(2) the Company has actual knowledge at the time such information is delivered
to the Creditors that such information contains a material misstatement of fact
or omits to state a material fact necessary to make the statements contained
therein, in light of the circumstances under which they were made, not
materially misleading.
SECTION 2.5. Other Agreements. Neither the Company nor any
Restricted Subsidiary is a party to any material indenture, loan, or credit
agreement, or to any material lease or other agreement or instrument, or subject
to any charter or corporate restriction which would be breached or accelerated
by entering into the Credit Documents or which would have a material adverse
effect on the ability of the Company to carry out its obligations under the
Credit Documents. Neither the Company nor any Restricted Subsidiary is in
default in any respect in the performance, observance, or fulfillment of any of
the obligations, covenants, or conditions contained in any agreement or
instrument which would result in a Material Adverse Change.
SECTION 2.6. Litigation. There is no pending or (to the Company's
knowledge) threatened action or proceeding against
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or affecting the Company or any Restricted Subsidiary before any court,
governmental agency, or arbitrator, which, in any one case or in the aggregate,
is material to the Company and its Restricted Subsidiaries, taken as a whole, or
would materially and adversely affect the ability of the Company to perform its
respective obligations under the Credit Documents.
SECTION 2.7. No Defaults on Outstanding Judgments or Orders. To the
best of the Company's knowledge, the Company and its Restricted Subsidiaries
have satisfied all material final judgments, and neither the Company nor any
Restricted Subsidiary is in default with respect to any final judgment, writ,
injunction, decree, rule, or regulation of any court, arbitrator, or federal,
state, municipal, or other governmental authority, commission, board, bureau,
agency, or instrumentality, domestic or foreign, which default would result in a
Material Adverse Change.
SECTION 2.8. Governmental and Regulatory Approvals. No
authorizations, approvals or consents of, and no filings or registrations with,
any governmental or regulatory authority or agency are necessary for the
execution, delivery or performance by the Company or any Guarantor, as the case
may be, of the Credit Documents to which it is a party or for the validity or
enforceability thereof, except for filings necessary to perfect Liens granted
pursuant to the Credit Documents.
SECTION 2.9. Ownership and Liens. The Company and each Restricted
Subsidiary has title to, or valid leasehold interests in, all of its properties
and assets, real and personal, and none of the properties and assets owned by
the Company or any Restricted Subsidiary and none of their leasehold interests
is subject to any Lien, except such as may be permitted pursuant to Section 4.1
of this Agreement.
SECTION 2.10. Subsidiaries etc. Schedule I sets forth as of the
initial date of this Agreement (and as of the date of delivery pursuant to
Section 3.8(6) of any subsequent Schedule I) a true and correct list of all
capital stock, partnership units or other equity interests of any Person owned
or otherwise held (including capital stock, partnership units or other equity
interests held as collateral) by the Company and its Subsidiaries and indicates
whether such capital stock, partnership units or other equity interests are
owned or held in some other capacity by the Company or such Subsidiary.
SECTION 2.11. ERISA. The Company and the ERISA Affiliates are in
compliance in all material respects with the applicable provisions of ERISA.
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SECTION 2.12. Stores. Schedule II hereto sets forth, as of the
Friday immediately preceding the Effective Date (and as of the Friday
immediately preceding any date of delivery pursuant to Section 3.8(6) of any
subsequent Schedule II), a complete and accurate list of the addresses of each
Store and whether such Store is operated by the Company, a Restricted
Subsidiary, a Financed Franchisee or a Franchisee which is not a Financed
Franchisee.
SECTION 2.13. Hazardous Materials. (1) The Company and each of its
Subsidiaries have obtained all permits, licenses and other authorizations which
are required to be obtained by the Company or such Subsidiary under all
Environmental Laws, except to the extent failure to have any such permit,
license or authorization would not result in a Material Adverse Change. Except
as disclosed pursuant to clause (3) below, the Company and each of its
Subsidiaries are in compliance with the terms and conditions of all such
permits, licenses and authorizations, and are also in compliance with all other
limitations, restrictions, conditions, standards, prohibitions, requirements,
obligations, schedules and timetables contained in any applicable Environmental
Law or in any regulation, code, plan, order, decree, judgment, injunction,
notice or demand letter issued, entered, promulgated or approved thereunder,
except to the extent that any such failure to comply would not result in a
Material Adverse Change.
(2) There have been no material environmental investigations, studies,
audits, tests, reviews or other analyses conducted by or which are in the
possession of the Company or any of its Subsidiaries in relation to any property
or facility now or previously owned or leased by the Company or any of its
Subsidiaries which have not been made available to the Creditors.
(3) The Company has informed the Creditors in writing of all material
non-compliance of the Company and each of its Subsidiaries with the terms and
conditions of all (a) permits, licenses or authorizations required under all
Environmental Laws and (b) other limitations, restrictions, conditions,
standards, prohibitions, requirements, obligations, schedules and timetables
contained in any applicable Environmental Law or in any applicable regulation,
code, plan, order, decree, judgment, injunction notice or demand letter issued,
entered, promulgated or approved thereunder, except for such instances of
noncompliance which would not result in a Material Adverse Change.
SECTION 2.14. Taxes. The Company and each Subsidiary have filed all
material tax returns (federal, state, and local) required to be filed and have
paid all taxes, assessments, and
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governmental charges and levies thereon which it is aware are due, including
interest and penalties, except to the extent the validity thereof is being
contested in good faith and by appropriate proceedings.
SECTION 2.15. Debt. As of the date hereof, Schedule IIIA sets forth
a complete and correct list of all credit agreements, indentures, purchase
agreements, guaranties, Capital Leases, and other investments, agreements, and
arrangements currently in effect providing for or relating to extensions of
credit (including agreements and arrangements for the issuance of letters of
credit or for bankers' acceptance financing) in respect of which the Company or
any Restricted Subsidiary is in any manner directly or contingently obligated;
and the maximum principal or face amounts of the credit in question, which are
outstanding and which can be outstanding, are correctly stated, and all Liens of
any nature given or agreed to be given as security therefor are correctly
described or indicated in such Schedule.
SECTION 2.16. Financed Franchisee Information. Schedule IV hereto
sets forth, as of the initial date of this Agreement (and as of the date of
delivery pursuant to Section 3.8(6) of any subsequent Schedule IV), a true and
complete list of any Debt owed by each Person to the Company or any Restricted
Subsidiary which is evidenced by a promissory note or other instrument.
SECTION 2.17. Investment Company Act. Neither the Company nor any
of its Subsidiaries is, and each Financed Franchisee has duly represented to the
Company that it is not, an "investment company," or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended.
SECTION 2.18. Public Utility Holding Company Act. Neither the
Company nor any of its Subsidiaries is a "holding company," or an "affiliate" of
a "holding company" or a "subsidiary company" of a "holding company," within the
meaning of the Public Utility Holding Company act of 1935, as amended.
-18-
ARTICLE III
AFFIRMATIVE COVENANTS
---------------------
From and after the date hereof, so long as any Debt of the Company or
any Guarantor arising under the Credit Documents shall remain unpaid or any
Creditor shall have any contractual obligation under any Credit Document to
extend credit of any nature to the Company, the Company will:
SECTION 3.1. Maintenance of Existence. Except as otherwise
permitted by Section 4.3, preserve and maintain, and cause each Restricted
Subsidiary to preserve and maintain, its legal existence and good standing in
the jurisdiction of its organization or formation, and qualify and remain
qualified, and cause each Restricted Subsidiary to qualify and remain qualified,
as a foreign entity in each jurisdiction in which the failure to so qualify
would result in a Material Adverse Change.
SECTION 3.2. Maintenance of Records. Keep, and cause each
Subsidiary to keep, adequate records and books of account.
SECTION 3.3. Maintenance of Properties. Maintain, keep, and
preserve, and cause each Restricted Subsidiary to maintain, keep, and preserve,
all of its material properties (tangible and intangible) necessary or useful in
the proper conduct of its business in good working order and condition, ordinary
wear and tear excepted; provided, however, the Company and each Restricted
Subsidiary may close Stores in the ordinary course of business, in which event
the Company shall give prompt written notice to each Agent.
SECTION 3.4. Conduct of Business. Except (1) for the ownership and
operation of Unrestricted Subsidiaries and any Investments permitted therein by
clause (3) of Section 4.8 and (2) to the extent otherwise permitted pursuant to
clause (5) of Section 4.8, continue, and cause each Restricted Subsidiary to
continue (unless causing to so continue would constitute a breach of fiduciary
duty), to engage in the operation of Stores and/or in the franchising of Stores
to other Persons (and other matters and operations incidental to the foregoing,
including, but not limited to, the holding of real estate or leasehold interests
for Store locations and the distribution of Store supplies or inventory items),
and no other line of business; provided, that after each acquisition by the
Company or a Restricted Subsidiary of preexisting operating assets, the Company
or such Restricted Subsidiary, as the case may be, shall have a reasonable
period of time in which to dispose of any assets so acquired which do not
relate, or are not being converted, to the operation of Stores or
-19-
the franchising of Stores to other Persons (and other matters and operations
incidental to the foregoing).
SECTION 3.5. Maintenance of Insurance. Maintain, and cause each
Restricted Subsidiary to maintain, insurance with commercially reasonable and
reputable insurance companies or associations in such amounts and covering such
risks as are usually carried by companies engaged in the same or a similar
business and similarly situated, which insurance may provide for reasonable
deductibility from coverage thereof.
SECTION 3.6. Compliance With Laws. Comply, and cause each
Subsidiary to comply, in all material respects with all material applicable
laws, rules, regulations, and orders, such compliance to include, without
limitation, paying before the same become delinquent all taxes, assessments, and
governmental charges imposed upon it or upon its property except to the extent
the validity thereof is being contested in good faith and by appropriate
proceedings.
SECTION 3.7. Right of Inspection. At any reasonable time and from
time to time, permit any Creditor or any agent or representative thereof to
examine and make copies of and abstracts from the records and books of account
of, and visit the properties of, the Company and any Subsidiary, and to discuss
the affairs, finances, and accounts of the Company and any Subsidiary with any
of their respective officers, directors and employees and the Company's
independent accountants.
SECTION 3.8. Reporting Requirements. Furnish to each of the Loan
Agent and the Lease Agent (in such number of copies of each as may be specified
by the Agents):
(1) Retail Period financial statements. As soon as available and in
any event within twenty (20) days after the end of each Retail Period of
the Company (or in the case of the last Retail Period of each fiscal
quarter of the Company, within forty-five (45) days after the end of such
Retail Period), consolidated and consolidating balance sheets of the
Company and its Restricted Subsidiaries as at the end of such Retail
Period, consolidated and consolidating statements of operations of the
Company and its Restricted Subsidiaries for the period commencing at the
end of the previous fiscal year and ending with the end of such Retail
Period and for the period commencing at the end of the previous Retail
Period and ending with the end of such Retail Period, and consolidated and
consolidating statements of cash flows of the Company and its Restricted
Subsidiaries for the portion of the
-20-
fiscal year ended with the last day of such Retail Period and for the
period commencing at the end of the previous Retail Period and ending with
the end of such Retail Period, all in reasonable detail and for statements
of operations, stating in comparative form the respective budget figures
for the corresponding period, and a "flash" report of sales by week by unit
in the most complete form as previously delivered to each of the Loan Agent
and the Lease Agent; provided, however, that the Company shall be under no
obligation to deliver to the Loan Agent or the Lease Agent consolidating
financial statements prior to any Creditor's written request therefor or if
the Company has no Significant Subsidiary;
(2) Quarterly financial statements. As soon as available and in any
event within forty-five (45) days after the end of each of the first three
fiscal quarters of each fiscal year of the Company, consolidated and
consolidating balance sheets of the Company and its Restricted Subsidiaries
as at the end of such fiscal quarter, consolidated and consolidating
statements of operations of the Company and its Restricted Subsidiaries for
the period commencing at the end of the previous fiscal year and ending
with the end of such fiscal quarter, and consolidated and consolidating
statements of cash flows of the Company and its Restricted Subsidiaries for
the portion of the fiscal year ended with the last day of such fiscal
quarter, all in reasonable detail and stating in comparative form the
respective consolidated and consolidating figures for the corresponding
date and period in the previous fiscal year and certified by the Chief
Financial Officer, Chief Accounting Officer, Vice President - Finance or
any Senior Vice President of the Company (in his or her capacity as such,
without personal liability therefor) as being prepared consistent with the
Company's audited annual financial statements (subject (a) to year-end
adjustments and changes in accounting policies permitted by GAAP which have
been disclosed in writing to the Agents, and (b) to adjustments necessary
to factor out the consolidated results of operations and financial position
of ENBC from such financial statements); provided, however, that the
Company shall be under no obligation to deliver to the Loan Agent or the
Lease Agent consolidating financial statements prior to any Creditor's
written request therefor or if the Company has no Significant Subsidiary;
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(3) Annual financial statements. As soon as available and in any
event within ninety (90) days after the end of each fiscal year of the
Company, (a) a consolidated and consolidating balance sheet of the Company
and its Subsidiaries as at the end of such fiscal year, consolidated and
consolidating statements of operations of the Company and its Subsidiaries
for such fiscal year, and consolidated and consolidating statements of cash
flows of the Company and its Subsidiaries for such fiscal year, all in
reasonable detail and stating in comparative form the respective
consolidated figures for the corresponding date and period in the prior
fiscal year and all prepared in accordance with GAAP and as to the
consolidated statements accompanied by an unqualified opinion thereon,
except for such qualifications as may be reasonably acceptable to the
Required Creditors, by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Co. or other independent
accountants selected by the Company and reasonably acceptable to the
Required Creditors, and (b) consolidated and consolidating balance sheet of
the Company and its Restricted Subsidiaries as at the end of such fiscal
year, consolidated and consolidating statements of operations of the
Company and its Restricted Subsidiaries for such fiscal year, and
consolidated and consolidating statements of cash flows of the Company and
its Restricted Subsidiaries for such fiscal year, all in reasonable detail
and stating in comparative form the respective consolidated figures for the
corresponding date and period in the prior fiscal year and all and
certified by the Chief Financial Officer, Chief Accounting Officer, Vice
President - Finance or any Senior Vice President of the Company (in his or
her capacity as such, without personal liability therefor) as being
prepared consistent with the Company's audited annual financial statements
(subject to adjustments necessary to factor out the consolidated results of
operations and financial position of ENBC from such financial statements);
provided, however, that in no event shall the Company be obligated to
deliver to the Loan Agent and the Lease Agent consolidating financial
statements prior to any Creditor's written request therefor or if the
Company has no Significant Subsidiary and ENBC is not then a Subsidiary;
(4) Certificate of no Default. Together with the financial
statements furnished by the Company under the preceding clauses (2) and
(3), a certificate of the Chief Financial Officer, Chief Accounting
Officer, Vice President - Finance or any Senior Vice President of the
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Company (in his or her capacity as such, and without personal liability
therefor) (a) certifying that to the best of his or her knowledge no
Default or Event of Default has occurred and is continuing, or if a Default
or Event of Default has occurred and is continuing, a statement as to the
nature thereof and the action which is proposed to be taken with respect
thereto, and (b) showing computations calculated as of the last day of the
fiscal period then ended demonstrating compliance with each of the
covenants contained in Article V;
(5) Accountant's reports. (a) Together with the financial statements
furnished by the Company under the preceding clause (3), a certificate of
the independent public accountants who audited such statements to the
effect that, in making the examination necessary for the audit of such
statements, they have obtained no knowledge of any condition or event which
constitutes a Default or Event of Default, or if such accountants shall
have obtained knowledge of any such condition or event, specify in such
certificate each such condition or event of which they have knowledge and
the nature and status thereof; and (b) promptly upon receipt thereof,
copies of any reports submitted to the Company or any Significant
Subsidiary by independent certified public accountants in connection with
examination of the financial statements of the Company or any Significant
Subsidiary made by such accountants;
(6) Updated Schedules. As soon as reasonably available in final form
and in any event within forty-five (45) days after the end of each Retail
Period, updated Schedules I, II and IV hereto which updated schedules shall
be deemed as of the date of delivery to amend and restate in their entirety
the previously delivered Schedules I, II and IV;
(7) Notice of litigation. Promptly after the commencement thereof,
notice of all actions, suits, and proceedings before any court or
governmental department, commission, board, bureau, agency, or
instrumentality, domestic or foreign, affecting the Company or any
Subsidiary, which, in any one case or in the aggregate, are material to the
Company and its Restricted Subsidiaries taken as a whole, or adversely
affect the ability of the Company to perform its obligations under the
Credit Documents;
(8) Notice of Defaults and Events of Default. (a) Promptly after the
Company becomes aware of the
-23-
occurrence of a default (as such term is used in the 1995 Master Lease
Agreement) or any event which with the passage of time, the giving of
notice or both would constitute such a Default, and (b) as soon as possible
and in any event within three (3) Business Days after the Company becomes
aware of the occurrence of any other Default or Event of Default, a written
notice setting forth the details of such Default or Event of Default and
the action which is proposed to be taken by the Company with respect
thereto;
(9) ERISA reports. Promptly after the filing or receiving thereof,
copies of all substantive reports, including annual reports, with respect
to each Plan for which the Company or a Subsidiary is the plan sponsor and
material notices which the Company or any Subsidiary files with or receives
from the PBGC or the U.S. Department of Labor under ERISA; and as soon as
possible and in any event within thirty (30) days after the Company or any
Subsidiary knows or has reason to know that any Reportable Event or
Prohibited Transaction has occurred with respect to any Plan or that the
PBGC or the Company or any Subsidiary has instituted or will institute
proceedings under Title IV of ERISA to terminate any Plan, the Company will
deliver to each of the Loan Agent and the Lease Agent a certificate of the
Chief Financial Officer, Chief Accounting Officer, Vice President - Finance
or any Senior Vice President of the Company (in his or her capacity as such
and with no personal liability therefor) setting forth details as to such
Reportable Event or Prohibited Transaction or Plan termination and the
action the Company proposes to take with respect thereto;
(10) Reports to other creditors. Promptly after the furnishing
thereof, copies of any material statement or report furnished to any other
creditor of the Company pursuant to the terms of any indenture, loan, or
credit or similar agreement and not otherwise required to be furnished to
the Loan Agent and the Lease Agent pursuant to any other clause of this
Section 3.8;
(11) Proxy statements, etc. Promptly after the sending or filing
thereof, copies of all proxy statements, financial statements, reports and
prospectus (whether preliminary or final) which the Company or any
Restricted Subsidiary is required under applicable securities laws to send
to its stockholders,
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and copies of all regular, periodic, and special reports, and all
registration statements which the Company or any Restricted Subsidiary
files with the Securities and Exchange Commission (or any governmental
authority which may be substituted therefor) or with any national
securities exchange;
(12) Financed Franchisee Loan Documents. Promptly after the execution
and delivery by a Financed Franchisee of any Financed Franchisee Loan
Documents, copies of such Financed Franchisee Loan Documents;
(13) Financed Franchisee and Financed Subsidiary quarterly financial
statements. As soon as available and in any event within forty-five (45)
days after the end of each of the first three fiscal quarters of each
fiscal year of each Financed Franchisee and each Financed Subsidiary, and
as soon as available and in any event within ninety (90) days after the end
of each fiscal year of each Financed Franchisee and each Financed
Subsidiary, balance sheets of each such Financed Franchisee and each such
Financed Subsidiary as at the end of such fiscal quarter or fiscal year,
statements of operations of each such Financed Franchisee and each such
Financed Subsidiary for the period commencing at the end of the previous
fiscal year and ending with the end of such fiscal quarter or fiscal year,
and statements of cash flows of each such Financed Franchisee and each such
Financed Subsidiary for the portion of the fiscal year ended with the last
day of such fiscal quarter or fiscal year, all in reasonable detail and
stating in comparative form the respective figures for the corresponding
date and period in the previous fiscal year and either (A) certified by the
Chief Financial Officer, Chief Accounting Officer, Vice President - Finance
or any Senior Vice President of the Company (in his or her capacity as
such, without personal liability therefor) as being, to the best of such
officer's knowledge, prepared in accordance with GAAP or (B) certified to
the Creditors by the chief executive officer, the chief financial officer
or treasurer of such Financed Franchisee or Financed Subsidiary as
accurate, subject to changes resulting from normal, recurring year-end
adjustments;
(14) Contingent Lease Liabilities. Together with the financial
statements furnished by the Company under the preceding clauses (2) and
(3), a report showing the aggregate amount of payments due during the
twelve-
-25-
month period succeeding the date of such financial statements under all
leases of Financed Franchisees with respect to which the Company is
primarily liable pursuant to leases transferred to Financed Franchisees in
accordance with clause (4) of Section 4.7; and
(15) General information. Such other information respecting the
condition or operations, financial or otherwise, of the Company or any
Subsidiary as any of the Loan Agent, the Lease Agent, Documentation Agent
or the Required Creditors may from time to time reasonably request.
SECTION 3.9. Environmental Laws. Use and operate, and cause each
Subsidiary to use and operate, all of its facilities and properties in material
compliance with all Environmental Laws, keep all necessary permits, approvals,
certificates, licenses and other authorizations relating to environmental
matters in effect and remain in material compliance therewith, and handle all
hazardous substances in material compliance with all applicable Environmental
Laws, except to the extent the failure to comply with the foregoing would not
result in a Material Adverse Change; and provide such information and
certifications which any Creditors may reasonably request from time to time to
evidence compliance with this Section.
SECTION 3.10. Credit Usage.
(1) At the time of each incurrence, and after giving effect thereto,
of Debt under the Credit Agreement or the 1996 Master Lease Agreement
during any fiscal period set forth below (but only at such times and at no
other times) demonstrate to the Loan Agent or the Lease Agent compliance
with the ratio of (1) Senior Secured Indebtedness to (2) Annualized
EBITDAL, for the fiscal quarter then most recently ended for which
financial statements have been delivered to the Loan Agent and the Lease
Agent pursuant to Section 3.8, does not exceed the ratio set forth below
opposite such fiscal period:
Fiscal period(s) Ratio
---------------- -----
Q4 1996 2.50:1.00
Q1 1997 2.75:1.00
Q2 1997 3.00:1.00
Q3 1997 - Q2 1998 2.75:1.00
Q3, Q4 1998 2.50:1.00
Thereafter 2.25:1.00
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(2) In the event the Company receives any proceeds from the incurrence
of Debt under the Credit Agreement or the 1996 Master Lease Agreement on a
day when, after giving effect to such incurrence, the ratio set forth in
the preceding clause was exceeded, the Company shall repay to the Loan
Agent and/or the Lease Agent, as the case may be, proceeds from the
incurrence of such Debt in an amount sufficient to cause compliance with
such ratio as of the date of such incurrence, such repayment to be due
within 10 Business Days of written notice from the Loan Agent or the Lease
Agent, as the case may be, requiring such repayment.
ARTICLE IV
NEGATIVE COVENANTS
------------------
From and after the date hereof, so long as any Debt of the Company or
any Guarantor arising under any of the Credit Documents shall remain unpaid or
any Creditor shall have any contractual obligation under any Credit Document to
extend credit of any nature to the Company, the Company will not:
SECTION 4.1. Liens. Create, incur, assume, or suffer to exist, or
permit any Restricted Subsidiary to create, incur, assume, or suffer to exist
(unless failure to so permit would constitute a breach of fiduciary duty), any
Lien upon or with respect to any of its properties, now owned or hereafter
acquired, except:
(1) Liens securing obligations of a Restricted Subsidiary to the
Company or a Guarantor;
(2) Liens for taxes or assessments or other government charges or
levies if not yet delinquent or, if due and payable, if they are being
contested in good faith by appropriate proceedings and for which
appropriate reserves are maintained;
(3) Liens imposed by law, such as mechanics', materialmen's,
landlords', warehousemen's, and carriers' Liens, and other similar Liens,
securing obligations incurred in the ordinary course of business which are
not past due for more than thirty (30) days or which are being contested in
good faith by appropriate proceedings and for which appropriate reserves
have been established;
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(4) Liens under workers' compensation, unemployment insurance, social
security, or similar legislation;
(5) Liens, deposits, or pledges to secure the performance of bids,
tenders, contracts (other than contracts for the payment of money), leases
(permitted under the terms of this Agreement), public or statutory
obligations, surety, stay, appeal, indemnity, performance or other similar
bonds, or other similar obligations arising in the ordinary course of
business;
(6) Judgment and other similar Liens arising in connection with court
proceedings, provided, that the execution or other enforcement of such
Liens is effectively stayed and the claims secured thereby are being
actively contested in good faith and by appropriate proceedings;
(7) Easements, rights-of-way, restrictions, and other similar
encumbrances which, in the aggregate, do not materially interfere with the
occupation, use, and enjoyment by the Company or any Restricted Subsidiary
of the property or assets encumbered thereby in the normal course of its
business or materially impair the value of the property subject thereto;
(8) Liens securing Debt of the types permitted by clauses (6) and (12)
of Section 4.2, provided, that with respect to Debt of the type permitted
by clause (12) of Section 4.2, such Liens are in existence on the assets so
acquired immediately prior to the consummation of the respective Investment
or other acquisition permitted by clause (12) of Section 4.2 and such Liens
were not created in anticipation of such Investment or other acquisition;
(9) Purchase money Liens on any property owned or hereafter acquired
or the assumption of any Lien on property existing at the time of such
acquisition, or a Lien incurred in connection with any conditional sale or
other title retention agreement or a Capital Lease, provided, that:
(a) Any property subject to any of the foregoing is acquired by
the Company or any Restricted Subsidiary in the ordinary course of its
respective business and the Lien on any such property is created
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contemporaneously with or prior to such acquisition;
(b) The obligation secured by any Lien so created, assumed, or
existing shall not exceed ninety percent (90%) of the lesser of cost
or fair market value as of the time of acquisition of the property
covered thereby to the Company or Restricted Subsidiary acquiring the
same;
(c) Each such Lien shall attach only to the property so acquired
and fixed improvements thereon; and
(d) The Debt of the Company which is secured by such Liens plus
the Debt of all Restricted Subsidiaries secured by such Liens arising
after such Persons become Restricted Subsidiaries shall not exceed at
any time outstanding in the aggregate Three Million Dollars
($3,000,000);
(10) Liens arising pursuant to (a) the Credit Documents, (b) the 1995
Lease Documents, provided, that at no time shall the Financial Lease Debt
arising from the 1995 Lease Documents exceed in principal amount One
Hundred Twenty Million Dollars ($120,000,000) and (c) documentation
evidencing other Financial Lease Debt, provided, that the documentation
evidencing such Financial Lease Debt shall not contain any representation,
covenant or default which is more restrictive than the respective
representations, covenants and defaults set forth in this Agreement;
(11) Liens on dividends and returned premiums due to the Company with
respect to its insurance policies securing not more than Two Million
Dollars ($2,000,000) at any one time outstanding of insurance premiums due
with respect to such policies;
(12) Liens on the Denver Support Center, provided, that the aggregate
amount of Debt secured by such Liens shall in no event exceed Twenty-Five
Million Dollars ($25,000,000); and
(13) Other Liens not of the type permitted by the foregoing clauses
(1) through (12), provided, that the aggregate amount of Debt secured by
such Liens shall in no event exceed Ten Million Dollars ($10,000,000).
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SECTION 4.2. Debt. Create, incur, assume, or suffer to exist, or
permit any Restricted Subsidiary to create, incur, assume, or suffer to exist
(unless failure to so permit would constitute a breach of fiduciary duty), any
Debt, except:
(1) Debt of the Company under the Credit Documents, provided, that at
no time shall (a) Debt arising from the Credit Agreement exceed
$150,000,000 or (b) Debt arising from the 1996 Master Lease Agreement
exceed $300,000,000;
(2) Debt described in Schedule IIIB, but no renewals, extensions, or
refinancings thereof;
(3) Accounts payable to trade creditors for goods or services which
are not aged more than ninety (90) days from billing date incurred in the
ordinary course of business and paid within the specified time, unless
contested in good faith and by appropriate proceedings;
(4) Debt of any Restricted Subsidiary to the Company provided such
Debt complies with any applicable requirements set forth in Section 4.8;
(5) Debt of the Company arising with respect to Company's commitment
to provide funds to any Financed Franchisee or to any Financed Subsidiary
so long as such commitment to provide funds complies with the requirements
set forth in Section 4.8;
(6) Debt which constitutes indebtedness for borrowed money owed by a
Financed Franchisee to a Person other than the Company which indebtedness
is in existence on the date such Financed Franchisee becomes a Financed
Subsidiary, and any renewal, extension or refinancing of such Debt,
provided, that both before and after giving effect to such Financed
Franchisee becoming a Financed Subsidiary no Default or Event of Default
shall exist or be continuing, and provided further, that the outstanding
principal amount of such Debt shall at no time exceed the principal amount
of such Debt outstanding on the date such Financed Franchisee becomes a
Financed Subsidiary;
(7) Debt which is secured by Liens of the type described in clauses
(9), (10), (11) or (12) of Section 4.1;
(8) Debt which constitutes Current Pay Subordinated Debt, provided,
that (i) both before and
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after giving effect to the incurrence of such Debt no Default or Event of
Default shall have occurred or be continuing and (ii) if such Current Pay
Subordinated Debt had been incurred as of the last day of the then most
recently ended fiscal quarter of the Company, after giving effect to the
incurrence of such Debt no Default or Event of Default would have existed;
(9) Debt which constitutes Non-Current Pay Subordinated Debt, provided
that both before and after giving effect to the incurrence of any such Non-
Current Pay Subordinated Debt no Default or Event of Default shall exist or
be continuing;
(10) Debt of the type permitted by Sections 4.4, 4.5, 4.8(1)(b), (c)
and (d) and 4.9;
(11) Debt of the Company arising under the BWRE Guaranty, provided
that (a) the principal amount of indebtedness guaranteed by the BWRE
Guaranty shall at no time exceed $7,350,000 and (b) so long as the BWRE
Guaranty shall remain outstanding, (i) the only assets of BWRE shall be the
BWRE Parcels, those certain Land and Building Leases, each dated February
16, 1996, between Boston West, L.L.C., as tenant, and BWRE, as landlord,
relating to the BWRE Parcels and all rights as landlord arising under such
Land and Building Leases and (ii) Stores shall be operated on the BWRE
Parcels;
(12) Debt incurred or assumed in connection with Investments and other
acquisitions permitted under this Agreement, provided, that the aggregate
principal amount of such Debt shall not exceed $25,000,000 at any one time
outstanding; and
(13) Unsecured Debt not of the type described in the foregoing clauses
(1) through (12) in an aggregate principal amount not to exceed at any one
time outstanding Twenty-Five Million Dollars ($25,000,000); provided, that
(i) before and after giving effect to the incurrence of such Debt no
Default or Event of Default shall have occurred or be continuing and (ii)
if such unsecured Debt had been incurred as of the last day of the then
most recently ended fiscal quarter of the Company, after giving effect to
the incurrence of such unsecured Debt no Default or Event of Default would
have existed.
SECTION 4.3. Mergers, Etc. Merge or consolidate with, or sell,
assign, lease, liquidate, dissolve or otherwise dispose
-31-
of (whether in one transaction or in a series of transactions) all or
substantially all of its assets (whether now owned or hereafter acquired) to any
Person, or acquire all or substantially all of the assets or the business of any
Person, or permit any Restricted Subsidiary to do so (unless failure to so
permit would constitute a breach of fiduciary duty), except that:
(1) any Restricted Subsidiary may merge into or consolidate with or
transfer assets to the Company or a Guarantor, provided, that in the case
of a Guarantor which is a Special Purpose Subsidiary the only assets of the
Subsidiary so merged, consolidated or transferred shall be assets of the
type permitted pursuant to the definition of "Special Purpose Subsidiary";
(2) any Restricted Subsidiary may be dissolved;
(3) the Company, any Guarantor, any Financed Subsidiary or Special
Purpose Subsidiary may acquire all or substantially all of the assets or
the business of any Person, provided, that (i) in the case of a Special
Purpose Subsidiary the only assets so acquired shall be of a type permitted
pursuant to the definition of "Special Purpose Subsidiary", and (ii) as of
and after giving effect to such acquisition no Default or Event of Default
shall exist or be continuing; and
(4) the Company or any Guarantor may acquire capital stock,
partnership units or other equity interests of a Financed Franchisee or a
Restricted Subsidiary in compliance with clause (2) of Section 4.8.
SECTION 4.4. Leases. Create, incur, assume, or suffer to exist, or
permit any Restricted Subsidiary to create, incur, assume, or suffer to exist
(unless failure to so permit would constitute a breach of fiduciary duty), any
obligation as lessee for the rental or hire of any real or personal property,
except:
(1) operating leases of personal property and Capital Leases which do
not give rise to any Lien except those permitted by Section 4.1 and leases
which would be Capital Leases except that because of their immateriality
GAAP does not require them to be capitalized on the books of the lessee,
provided, that in the case of Capital Leases, the sum as of any date of (i)
the aggregate amount of payments due during the twelve month period
succeeding such date under all such Capital Leases which do not give rise
to any Lien plus
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(ii) the aggregate amount of payments due during the twelve month period
succeeding such date under all such Capital Leases which give rise to a
Lien permitted only by clauses (13) of Section 4.1 shall at no time exceed
Ten Million Dollars ($10,000,000);
(2) any leases of real property on which the Company or a Franchisee
operates or plans to operate a Store or which the Company or any Restricted
Subsidiary uses or intends to use for office space or similar purposes,
including without limitation any lease by the Company of the Denver Support
Center;
(3) leases between the Company and any Restricted Subsidiary or
between any Restricted Subsidiaries; and
(4) the Master Leases, any Sublease and any other Financial Lease Debt
permitted hereunder.
SECTION 4.5. Sale and Leaseback. Sell, transfer, or otherwise
dispose of, or permit any Restricted Subsidiary to sell, transfer, or otherwise
dispose of (unless failure to so permit would constitute a breach of fiduciary
duty), any real or personal property or fixtures to any Person and thereafter
directly or indirectly lease back the same or similar property, except: any sale
and subsequent lease back of (1) real or personal property and fixtures
consummated in accordance with any Financial Lease Debt or the Subleases;
provided, that the Company shall require any net proceeds from such sale which
are received on or about the effective date of such Financial Lease Debt and
which are paid directly or indirectly to a Financed Franchisee to be used by
such Financed Franchisee to reduce such Financed Franchisee's Debt to the
Company or (2) the Denver Support Center.
SECTION 4.6. Dividends. Declare or pay any dividends; or purchase,
redeem, retire, or otherwise acquire for value any of its capital stock now or
hereafter outstanding; or make any distribution of assets to its stockholders as
such whether in cash, assets, or obligations of the Company; or allocate or
otherwise set apart any sum for the payment of any dividend or distribution on,
or for the purchase, redemption, or retirement of, any shares of its capital
stock; or make any other distribution by reduction of capital or otherwise in
respect of any shares of its capital stock; or permit any of its Restricted
Subsidiaries (unless failure to so permit would constitute a breach of fiduciary
duty) to purchase or otherwise acquire for value any stock of the Company or
another Restricted Subsidiary, except that (1) the Company may declare and
deliver dividends and make distributions payable solely in capital stock of the
Company
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and (2) Guarantors may purchase or otherwise acquire for value stock of the
Company, provided, that any such Guarantor shall either (x) sell such stock at
its fair market price within twenty Business Days of its acquisition thereof or
(y) use such stock as consideration for or in connection with any acquisition
permitted pursuant to this Agreement.
SECTION 4.7. Sale of Assets. Sell, lease, assign, transfer, or
otherwise dispose of, or permit any Restricted Subsidiary to sell, lease,
assign, transfer, or otherwise dispose of (unless failure to so permit would
constitute a breach of fiduciary duty), any of its now owned or hereafter
acquired assets (including, without limitation, shares of stock and indebtedness
of Restricted Subsidiaries, receivables, leasehold interests, franchise
agreements, trademarks, trade names, copyrights, licenses and other general
intangible interests), except:
(1) for assets disposed of in the ordinary course of business;
(2) the sale or other disposition of assets no longer used or useful
in the conduct of its business;
(3) the sale, leasing or other disposition of real property or the
subleasing of leasehold interests (a) to ENBC or a franchisee of ENBC for
the operation of a retail bagel outlet or (y) to any other Person,
provided, that the Company and its Restricted Subsidiaries may not lease or
sublease more than 30,000 square feet of retail space to Persons (other
than retail space leased to ENBC or its franchisees to be operated as
retail bagels outlets) during any fiscal year;
(4) that any Restricted Subsidiary may sell, lease, assign, or
otherwise transfer its assets to the Company or any Guarantor unless in the
case of a Guarantor which is a Special Purpose Subsidiary, such assets are
not of a type permitted pursuant to the definition of "Special Purpose
Subsidiary";
(5) that the Company or any Restricted Subsidiary may sell, lease,
assign or otherwise transfer to a Franchisee any real property, leasehold
interests or personal property associated with the operation of Stores,
provided that such sale, lease, assignment or transfer is on commercially
reasonable terms negotiated at arms' length and that after giving effect to
such
-34-
sale, lease, assignment or transfer no Default or Event of Default shall
exist or be continuing;
(6) sales permitted under Section 4.5;
(7) any issuances or sales of the capital stock, partnership units or
other equity interests of any Restricted Subsidiary or other Person
permitted pursuant to Section 4.11;
(8) any sale, lease, assignment, transfer or other disposition
permitted or required by any Master Lease or the Agency Agreement;
(9) any disposition of operating assets permitted by the proviso in
Section 3.4;
(10) any transfer by the Company to a Guarantor of the Company's
conversion rights, options, first refusal rights or preemptive rights
provided in any Financed Franchisee Loan Documents or otherwise, provided
that such conversion rights are exercised by the Guarantor within 10 days
after such transfer; and
(11) other dispositions by the Company or any Restricted Subsidiary
not of the type described in the foregoing clauses (1) through (10)
provided that the aggregate amount of all such dispositions shall not
exceed $5,000,000 during the term of this Agreement.
SECTION 4.8. Investments. Make, or permit any Restricted Subsidiary
to make (unless failure to so permit would constitute a breach of fiduciary
duty), any Investment in any Person except:
(1) loans and advances made by the Company to (a) Financed
Franchisees; provided, that (i) the initial loans or advances to any
Financed Franchisee are or have been made pursuant to Financed Franchisee
Loan Documents, (ii) such loans or advances are evidenced by promissory
notes pledged to the Loan Agent for the benefit of the Creditors pursuant
to the Pledge Agreement, (iii) all such loans and advances to Financed
Franchisees shall be secured in the manner described in paragraph (3) of
Schedule V, (iv) all Liens in favor of the Company securing such loans and
advances are duly perfected within 30 days of the initial loan or advance
to such Financed Franchisee, and (v) the aggregate principal amount of all
loans and advances made by the Company to any Financed Franchisee
-35-
under the Financed Franchisee Loan Documents shall not exceed at any time
an amount equal to the products of four (4) multiplied by the aggregate
amount of all capital contributions theretofore made to such Financed
Franchisee; (b) Financed Subsidiaries; provided, that (i) such loans and
advances are made pursuant to Financed Subsidiary Loan Documents, (ii) such
loans or advances are evidenced by promissory notes pledged to the Loan
Agent for the benefit of the Creditors pursuant to the Pledge Agreement and
(iii) all Liens in favor of the Company securing such loans and advances
are duly perfected prior to the initial loan or advance thereunder; (c)
Guarantors, provided that such loans and advances are evidenced by
promissory notes; and (d) to the extent and only to the extent a Sublease
may be deemed to be a loan or advance, to Franchisees or Financed
Subsidiaries as lessees under a Sublease;
(2) the acquisition by the Company or any Guarantor of the capital
stock, partnership units or other equity interests of any Financed
Franchisees, Financed Subsidiaries or Guarantor; provided, that before and
after giving effect to such acquisition no Default or Event of Default
shall exist or be continuing;
(3) Investments in ENBC, provided, that (a) the aggregate amount of
all Investments by the Company and its Restricted Subsidiaries in ENBC
(which may be subordinated to Debt of ENBC owed to third parties) after the
date hereof shall at no time exceed the sum of (i) $50,000,000 plus (ii)
the lesser of (x) the product of $25,000,000 multiplied by the number of
anniversaries of the date hereof which have then occurred and (y) 150% of
the cumulative net income (minus any net loss) of ENBC for each full fiscal
quarter of ENBC occurring after July 31, 1996 plus (iii) in the case of
Investments consisting of the acquisition of capital stock of ENBC, such
additional amounts as shall be necessary for the Company to maintain
ownership of greater than 50% of the issued and outstanding voting capital
stock of ENBC; (b) upon the occurrence of an ENBC Event of Default which
constitutes a default in payment, no further Investments may thereafter be
made in ENBC; (c) upon the occurrence of an ENBC Event of Default which
does not constitute a default in payment, (i) for so long as such ENBC
Event of Default remains uncured and unwaived (in accordance with the terms
of the ENBC Credit Agreement), no Investments may be made in ENBC and (ii)
-36-
following the waiver or cure of such ENBC Event of Default (in accordance
with the terms of the ENBC Credit Agreement), additional Investments
thereafter made may not exceed in the aggregate $10,000,000; and (d) in no
event shall the aggregate amount of Investments in ENBC made by the Company
after the date hereof exceed $125,000,000;
(4) loans and advances made by the Company to an employee in
connection with the relocation of such employee provided such loans and
advances are consistent with past practices;
(5) non-hostile strategic Investments consisting of purchases or other
acquisitions of capital stock, obligations or other securities of any
Person or capital contributions to or other investments or acquisitions of
any interest in any Person in an aggregate amount for all such Persons not
in excess of $25,000,000 from the date hereof through the Termination Date,
as approved by the Board of Directors of the Company, provided that such
strategic investments are reasonably related to the Company's existing
business at the time of such investment;
(6) direct obligations of (or obligations fully guaranteed or insured
by) the United States or any agency thereof with maturities of one year or
less from the date of acquisition;
(7) certificates of deposit with maturities of one year or less from
the date of acquisition issued by any commercial bank having capital and
surplus in excess of One-Hundred Million Dollars ($100,000,000);
(8) commercial paper and variable and fixed rate notes issued by any
commercial bank having capital and surplus in excess of One Hundred Million
Dollars ($100,000,000);
(9) commercial paper and variable rate notes issued by, or guaranteed
by, any industrial or financial company with a short term commercial paper
rating of at least A-2 or the equivalent thereof by Standard & Poor's
Corporation or at least P-2 or the equivalent thereof by ▇▇▇▇▇'▇ Investors
Service, Inc., and in each case maturing within one year after the date of
acquisition;
-37-
(10) stock, obligations, or securities received in settlement of debts
(created in the ordinary course of business) owing to the Company or any
Restricted Subsidiary; and
(11) loans and advances not of the type described in the foregoing
clauses (1) through (10) in the aggregate principal amount not to exceed at
any one time outstanding Six Million Dollars ($6,000,000).
SECTION 4.9. Guaranties, Etc. Assume, guarantee, endorse, or
otherwise be or become directly or contingently responsible or liable, or permit
any Restricted Subsidiary to assume, guarantee, endorse, or otherwise be or
become directly or contingently responsible or liable (unless failure to so
permit would constitute a breach of fiduciary duty) for obligations of any
Person (including, but not limited to, an agreement to purchase any obligation,
stock, assets, goods, or services primarily for the purpose of enabling such
Person to make payment of such obligations, or to supply or advance any funds,
assets, goods, or services primarily for such purpose, or to maintain or cause
such Person to maintain a minimum working capital or net worth, or otherwise to
assure the creditors of any Person against loss), except:
(1) guaranties by endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of business;
(2) primary liability for (a) leases transferred to Financed
Franchisees in accordance with clause (5) of Section 4.7 and (b) Subleases
pursuant to the Master Leases;
(3) other guaranties of lease payments of Franchisees, provided that
as of any date the aggregate amount of all payments due during the twelve
month period succeeding such date under all real property leases of
Franchisees which are the subject of such other guaranties do not exceed
$8,000,000 through fiscal year 1997, $10,000,000 during fiscal year 1998,
with annual increases in this limit thereafter of $1,000,000;
(4) guaranties of Debt permitted solely by clause (11) and (13) of
Section 4.2; and
(5) any Guaranty.
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SECTION 4.10. Transactions With Affiliate. Enter into any
transaction, including, without limitation, the purchase, sale, or exchange of
property or the rendering of any service, with any Financed Franchisee or
Affiliate, or permit any Restricted Subsidiary to enter into any transaction,
including, without limitation, the purchase, sale, or exchange of property or
the rendering of any service, with any Financed Franchisee or Affiliate, except
pursuant to the reasonable requirements of the Company's or such Restricted
Subsidiary's business and upon fair and reasonable terms not materially less
favorable to the Company or such Restricted Subsidiary than similar transactions
entered into with a Person not a Financed Franchisee or Affiliate; provided
that, the foregoing shall not prohibit any transaction effected in accordance
with the respective Financed Franchisee Loan Documents, Financed Subsidiary Loan
Documents or Subleases.
SECTION 4.11. Subsidiary, Etc.
(1) Create, acquire or otherwise permit to exist any Subsidiaries
other than: (a) Special Purpose Subsidiaries; (b) Financed Subsidiaries; (c)
other Restricted Subsidiaries the acquisition of which is permitted by Section
4.8(5); (d) the Unrestricted Subsidiaries; (e) one or more wholly-owned
Guarantors the sole business of which is owning, operating, licensing,
franchising or providing support services for Stores which are located outside
of the United States of America and (f) one or more wholly-owned Guarantors the
sole business of which is owning, operating or franchising Stores which operate
under the tradename "Boston ▇▇▇▇▇▇" and which do not serve the full menu offered
at a Store operating under the tradename of "Boston Market"; provided, that with
respect to any Subsidiary described in clause (b) or (c) of this Section
4.11(1), in the event the Company shall directly or indirectly acquire all of
the issued and outstanding voting stock, general partners interests or other
equity interests having ordinary voting power to elect the board of directors or
other managers of such Subsidiary, simultaneously with such acquisition such
Subsidiary shall execute and deliver to the Loan Agent and the Lease Agent a
Guaranty;
(2) Sell or otherwise dispose of any shares of the capital stock,
partnership units or other equity interests of any Subsidiary or permit any
Subsidiary to issue any additional shares of its capital stock, partnership
units or other equity interest, other than in connection with stock splits,
stock dividends or similar issuances, except directors qualifying shares or
shares, partnership units or other units or interests issued: (1) for fair
consideration; (2) to the Company or any Guarantor upon exercise of the
Company's or such Guarantor's conversion rights, options, first refusal rights
or preemptive rights provided in the Financed Franchisee Loan Documents or
-39-
otherwise; or (3) to employees of such Subsidiary upon exercise of employee
stock, unit or other equity options, provided, that at the time such options are
granted the exercise price is not less than the fair market value of such stock,
unit or other equity interest and, provided, further that after giving effect to
the issuance of stock, units or other equity interest upon exercise of such
options, the issuer would continue to be a Subsidiary.
SECTION 4.12. Real Property. Purchase or otherwise acquire, or
permit any Restricted Subsidiary to purchase or otherwise acquire, title to any
real property (excluding leasehold improvements), except:
(1) the Company, any Guarantor, any Financed Subsidiary or any Special
Purpose Subsidiary may purchase or acquire real property (a) in accordance
with the terms and provisions of the 1996 Master Lease Agreement and the
Agency Agreement or (b) on which Stores are to be operated;
(2) the Company, or any Restricted Subsidiary may purchase or acquire
real property to be used for office space or similar purposes, including
without limitation the Denver Support Center;
(3) the Company or any Restricted Subsidiary may purchase and acquire
real property in connection with the sale, lease or other disposition of
such property in accordance with clause (3) of Section 4.7; and
(4) the Company, any Financed Subsidiary and any Special Purpose
Subsidiary may purchase or acquire real property in connection with an
acquisition permitted pursuant to clause (3) of Section 4.3 or clause (5)
of Section 4.8;
provided that at no time shall the book value of all real property owned by the
Company and its Restricted Subsidiaries on a consolidated basis (less the book
value of any leasehold improvements thereon) exceed an aggregate amount equal to
fifty percent (50%) of the Company's then total consolidated assets.
SECTION 4.13. Subordinated Debt. Make any payment or prepayment
with respect to Subordinated Debt except that (1) interest may be paid on
Current Pay Subordinated Debt and Non-Current Pay Subordinated Debt (to the
extent permitted by the terms of such Current Pay Subordinated Debt or Non-
Current Pay Subordinated Debt, including the subordination provisions thereof)
and (2) Subordinated Debt and interest thereon may be
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converted into equity of the Company or may be prepaid solely from the proceeds
of a substantially contemporaneous issuance of equity or Subordinated Debt
(provided that such Subordinated Debt shall be Non-Current Pay Subordinated Debt
if the Subordinated Debt so prepaid is Non-Current Pay Subordinated Debt) of the
Company.
SECTION 4.14. Financed Franchisee. (1) Amend, modify or otherwise
waive in any respect the terms, conditions or provisions of any Financed
Franchisee Loan Document if but for such amendment, modification or waiver and
any previous amendments, modifications or waivers, the Financed Franchisee party
to such Financed Franchisee Loan Documents would have outstanding payment
defaults aggregate in excess of $100,000 thereunder or if such amendment,
modification or waiver would otherwise cause such documents to no longer meet
each of the requirements set forth on Schedule V and (2) permit the aggregate
principal amount of Debt of all Financed Franchisees which is owed to Persons
other than the Company and which is senior to any Debt of such Financed
Franchisee owed to the Company to exceed at any time (a) prior to the first
anniversary of the date hereof, $75,000,000, (b) on or after such first
anniversary but prior to the second anniversary of the date hereof, $100,000,000
and (c) on or after such second anniversary, $125,000,000.
ARTICLE V
FINANCIAL COVENANTS
-------------------
From and after the date hereof, so long as any Debt of the Company or
any Guarantor arising under any of the Credit Documents shall remain unpaid or
any Creditor shall have any contractual obligation under any Credit Document to
extend credit of any nature to the Company, the Company will:
SECTION 5.1. Maximum Senior Secured Leverage Ratio. Maintain, as of
the last day of each fiscal quarter occurring during the respective fiscal
periods set forth below, a ratio of (1) Senior Secured Indebtedness to (2)
Annualized EBITDAL, for the fiscal quarter then most recently ended, of not
greater than the ratio set forth below opposite such fiscal period:
Fiscal Period(s) Covenant Level
---------------- --------------
Q4 1996 2.75:1.00
Q1, Q2 1997 3.00:1.00
Q3 1997 - Q2 1998 2.75:1.00
Q3, Q4 1998 2.50:1.00
Thereafter 2.25:1.00
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SECTION 5.2. Maximum Leverage Ratio. Maintain, as of the last day
of each fiscal quarter occurring during the respective fiscal periods set forth
below, a ratio of (1) Total Indebtedness to (2) Annualized EBITDAL, for the
fiscal quarter then most recently ended, of not greater than the ratio set forth
below opposite such fiscal period:
Fiscal Period(s) Covenant Level
---------------- --------------
Q4 1996 3.25:1.00
Q1 1997 3.75:1.00
Q2, Q3 1997 3.25:1.00
Q4 1997 - Q4 1998 3.00:1.00
Thereafter 2.75:1.00
SECTION 5.3. Fixed Charge Coverage Ratio. Maintain, as of the last
day of each fiscal quarter occurring during the respective fiscal periods set
forth below, a ratio of (1) EBITDAL for the four consecutive fiscal quarters
then ended to (2) Consolidated Fixed Charges, for such four consecutive fiscal
quarter period, of not less than the ratio set forth below opposite such fiscal
period:
Fiscal Period(s) Covenant Level
---------------- --------------
Q4 1996 - Q2 1997 2.50:1.00
Q3 1997 - Q4 1998 2.75:1.00
Thereafter 3.00:1.00
SECTION 5.4. Store Revenue. Maintain, during each Retail Period
occurring during the fiscal periods set forth below, an average weekly gross
revenue during such Retail Period per Store for all such Stores (whether
operated by the Company or a Franchisee) of not less than the amount set forth
below opposite such fiscal period:
Fiscal Period Covenant Level
------------- --------------
1996 $20,000
1997 $20,500
1998 $22,000
Thereafter $23,500
ARTICLE VI
EVENTS OF DEFAULT
-----------------
SECTION 6.1. Events of Default. If any of the following events
("Events of Default") shall occur:
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(1) Any representation or warranty made or deemed made (pursuant to
any Credit Document) by the Company or any Subsidiary in this Agreement or
any other Credit Document or which is contained in any certificate,
document, opinion, or financial or other statement furnished at any time
under or in connection with any Credit Document shall prove, in light of
the circumstances under which it was made, to have been incorrect in any
material respect on or as of the date made or deemed made;
(2) The Company or any Subsidiary shall fail to perform or observe any
term, covenant or agreement contained in Sections 4.3, 4.4, or 4.6 through
4.14 of this Agreement applicable thereto;
(3) The Company or any Subsidiary shall fail to perform or observe any
term, covenant or agreement contained in Sections 4.1, 4.2, 4.5 or 5.1
through 5.4 of this Agreement and such failure shall continue for four (4)
Business Days after the earlier of discovery, notification or final
calculation thereof applicable thereto;
(4) The Company or any Subsidiary shall fail to perform or observe any
other term, covenant, or agreement contained in any Credit Document
applicable thereto (other than those Sections referenced in the foregoing
clauses (2) and (3)) on its part to be performed or observed and such
failure shall continue for fifteen (15) Business Days following notice
thereof from any of the Loan Agent, the Lease Agent or the Required
Creditors;
(5) The Company or any Restricted Subsidiary shall (i) fail to make
any payment of principal, interest, premium, rents or fees with respect to
any indebtedness for borrowed money (including, without limitation, the
Revolving Notes) or any Financial Lease Debt (including, without
limitation, the Master Leases) of the Company or such Restricted Subsidiary
in an amount in excess of $1,000,000, when due (whether by scheduled
maturity, required prepayment, acceleration, demand, or otherwise) and any
applicable grace periods shall have expired (and in the case of
indebtedness for borrowed money, other than the Revolving Notes, or
Financial Lease Debt, other than the Master Leases, the amount which the
Company or any Restricted Subsidiary so fails to pay is in excess of
$1,000,000), or (ii) fail to perform or observe any term, covenant, or
-43-
condition on its part to be performed or observed under any agreement or
instrument relating to any indebtedness for borrowed money (including,
without limitation, the Revolving Note) or any Financial Lease Debt
(including, without limitation, the Master Leases) of the Company or such
Restricted Subsidiary in an amount in excess of $1,000,000, when required
to be performed or observed, if the effect of such failure to perform or
observe is to accelerate, or to permit the acceleration, after the giving
of notice, of the maturity of such indebtedness, unless such failure to
perform or observe shall be waived by the holder of such indebtedness or
Financial Lease Debt without any material payment or other material
accommodation on the part of the Company or such Restricted Subsidiary; or
any such indebtedness or Financial Lease Debt shall be declared to be due
and payable, or required to be prepaid (other than by a regularly scheduled
required prepayment), prior to the stated maturity thereof;
(6) The Company or any of its Significant Subsidiaries (a) shall
generally not, or shall be unable to, or shall admit in writing its
inability to pay its debts as such debts become due; or (b) shall make an
assignment for the benefit of creditors, petition or apply to any tribunal
for the appointment of a custodian, receiver, or trustee for it or a
substantial part of its assets; or (c) shall commence any proceeding under
any bankruptcy, reorganization, arrangements, readjustment of debt,
dissolution, or liquidation law or statute of any jurisdiction, whether now
or hereafter in effect; or (d) shall have any such petition or application
filed or any such proceeding commenced against it in which an order for
relief is entered or adjudication or appointment is made and which remains
undismissed for a period of sixty (60) days or more; or (e) by any act or
omission shall indicate its consent to, approval of, or knowing
acquiescence in any such petition, application, or proceeding, or order for
relief, or the appointment of a custodian, receiver, or trustee for all or
any substantial part of its properties; or (f) shall suffer any such
custodianship, receivership, or trusteeship to continue undischarged for a
period of sixty (60) days or more;
(7) Any Financed Franchisee shall fail to pay any sum owed to the
Company in connection with indebtedness for borrowed money (including any
interest or premium thereon) in an aggregate amount in excess of two
million dollars ($2,000,000) when due (whether by scheduled maturity,
required prepayment, acceleration,
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demand, or otherwise) and any applicable grace period shall have expired;
(8) One or more judgments, decrees, or orders for the payment of money
in excess of the greater of 3% of the consolidated net worth of the Company
and its Restricted Subsidiaries at such time or of two million Dollars
($2,000,000) in the aggregate shall be rendered against the Company or any
of its Subsidiaries, and such judgments, decrees, or orders shall continue
unsatisfied and in effect for a period of twenty (20) consecutive days
without being vacated, discharged, satisfied, escrowed, stayed or bonded
pending appeal;
(9) Any of the following events occur or exist with respect to the
Company or any ERISA Affiliate: (a) any Prohibited Transaction involving
any Plan; (b) any Reportable Event with respect to any Plan; (c) the filing
under Section 4041 of ERISA of a notice of intent to terminate any Plan or
the termination of any Plan; (d) any event or circumstance that might
reasonably constitute grounds entitling the PBGC to institute proceedings
under Section 4042 of ERISA for the termination of, or for the appointment
of a trustee to administer, any Plan, or the institution by the PBGC of any
such proceedings; (e) complete or partial withdrawal under Section 4201 or
4204 of ERISA from a Multiemployer Plan or the reorganization, insolvency,
or termination of any Multiemployer Plan; and in each case above, such
event or condition, together with all other events or conditions, if any,
would be reasonably likely in the opinion of either the Loan Agent or the
Lease Agent to subject the Company to any tax, penalty, or other liability
to a Plan, a Multiemployer Plan, the PBGC, or otherwise (or any combination
thereof) which in the aggregate exceed two million Dollars ($2,000,000) and
such event or condition remains unsatisfied after fifteen (15) Business
Days from its initial occurrence or results in a Lien (subject to Liens
permitted under Section 4.1) on Company's assets;
(10) Any Guaranty shall, at any time after its execution and delivery
and for any reason cease to be in full force and effect or shall be
declared null and void, or the validity or enforceability thereof shall be
contested by the respective Guarantor, or the respective Guarantor shall
deny it has any further liability or obligation under or shall fail to
perform its material obligations under such Guaranty (subject to any
applicable grace periods set forth therein);
(11) Any Change of Control; or
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(12) Any Material Adverse Change.
SECTION 6.2. Effect of Event of Default. If any Event of Default
shall occur, (1) the Loan Agent, the Issuing Lender and the Lenders shall have
all the rights and remedies available to them under the Credit Agreement and the
other Loan Documents subject to the terms of the Intercreditor Agreement and (2)
the Lease Agent, GECC and the Lease Participants shall have all the rights and
remedies available to them under the 1996 Master Lease Agreement and the other
1996 Lease Documents subject to the terms of the Intercreditor Agreement.
ARTICLE VII
MISCELLANEOUS
-------------
SECTION 7.1. Waivers and Amendments. The provisions of this
Agreement from time to time may be amended, modified or waived in accordance
with the terms of the Intercreditor Agreement.
Upon the effectiveness of any consent, amendment, modification or
waiver under this Agreement, the Loan Agent shall promptly give each Lender and
the Lease Agent shall give each Lease Participant written notice (including a
description) of such consent, amendment, modification or waiver.
SECTION 7.2. Notices, Etc. All notices and other communications
provided for under this Agreement shall be in writing (including telegraphic,
telex or facsimile communication) and mailed or telecommunicated or delivered to
the address of the respective party hereto as set forth on the signature pages
hereto (or, in the case of (1) the Issuing Lender and the Lenders, the address
set forth in the Credit Agreement, and (2) the Lease Participants, the address
set forth in the Participation Agreement); or, as to each party, at such other
address as shall be designated by such party in a written notice to the other
party complying as to delivery with the terms of this Section 7.2. All such
notices and communications shall, when mailed or telecommunicated, be effective
upon the earlier of actual receipt or three (3) Business Days after deposited in
the mails, or one (1) Business Day after transmitted by telex and the
appropriate answerback received, transmitted by facsimile or delivered to the
telegraph company, respectively, addressed as aforesaid.
SECTION 7.3. No Waiver; Remedies. No failure on the part of any
party to exercise, and no delay in exercising, any right, power, or remedy under
any Credit Documents shall operate as a waiver thereof; nor shall any single or
partial exercise of any right under any Credit Documents preclude any other or
-46-
further exercise thereof or the exercise of any other right. The remedies
provided in the Credit Documents are cumulative and not exclusive of any
remedies provided by law.
SECTION 7.4. Successors and Assigns. (1) This Agreement shall be
binding upon and inure to the benefit of the Company and the Creditors and their
respective successors and assigns, except that the Company may not assign or
transfer any of its rights hereunder without the prior written consent of the
Loan Agent and the Lease Agent, all the Lenders and all the Lease Participants
and (2) a Creditor may only assign its rights under this Agreement in connection
with an assignment by such Creditor of its interests under the Credit Documents.
SECTION 7.5. Costs, Expenses, and Taxes. Without duplication of
obligations under other Credit Documents, the Company agrees to pay on demand
all reasonable costs and expenses of the Agents in connection with the
preparation, execution, delivery, filing, recording, and administration of this
Agreement, including, without limitation, the reasonable fees and out-of-pocket
expenses of counsel for the Loan Agent and the Lease Agent, and local counsel
who may be retained by said counsel in connection with perfecting security
interests, with respect thereto, and all costs and expenses, if any, of the
Agents and the Creditors in connection with the enforcement of this Agreement.
SECTION 7.6. Governing Law. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of New York without
regard to its conflict of laws provisions.
SECTION 7.7. Severability of Provisions. Any provision of this
Agreement which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
SECTION 7.8. Headings. Article and Section headings in this
Agreement are included herein for the convenience of reference only and shall
not constitute a part hereof for any other purpose.
SECTION 7.9. SUBMISSION TO JURISDICTION; WAIVER OF VENUE. THE
PARTIES HERETO, AND EACH CREDITOR BY ENTERING INTO THE RESPECTIVE CREDIT
DOCUMENTS TO WHICH IT IS A PARTY SHALL BE DEEMED BY THE EXECUTION AND DELIVERY
OF SUCH CREDIT DOCUMENTS TO, (1) (A) WITH RESPECT TO ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE OTHER CREDIT DOCUMENTS,
HEREBY IRREVOCABLY SUBMIT TO THE JURISDICTION OF ANY NEW YORK
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STATE OR FEDERAL COURT SITTING IN NEW YORK CITY, NEW YORK, AND (B) WITH RESPECT
TO ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY MORTGAGE, SUCH
OTHER STATE COURT OR FEDERAL CIRCUIT COURT SITTING IN OR NEAREST TO THE COUNTY
IN WHICH THE PROPERTY IN QUESTION SUBJECT TO SUCH MORTGAGE IS LOCATED, (2)
IRREVOCABLY AGREE THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE
HEARD AND DETERMINED IN SUCH STATE OR FEDERAL COURT SPECIFIED IN SECTION 7.9(1)
AND (3) AGREE NOT TO INSTITUTE ANY LEGAL ACTION OR PROCEEDING AGAINST ANY AGENT,
ANY OTHER PARTY HERETO OR THE DIRECTORS, OFFICERS, EMPLOYEES, AGENTS OR PROPERTY
OF ANY THEREOF, ARISING OUT OF OR RELATING TO THIS AGREEMENT, IN ANY COURT OTHER
THAN AS HEREINABOVE SPECIFIED IN THIS SECTION 7.9. THE PARTIES HERETO AND EACH
CREDITOR BY ENTERING INTO THE RESPECTIVE CREDIT DOCUMENTS TO WHICH IT IS A PARTY
SHALL BE DEEMED BY THE EXECUTION AND DELIVERY OF SUCH CREDIT DOCUMENTS TO,
HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION
THEY MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE IN ANY SUCH ACTION OR
PROCEEDING (WHETHER BROUGHT BY SUCH PARTY OR OTHERWISE) IN ANY COURT HEREINABOVE
SPECIFIED IN THIS SECTION 7.9 AS WELL AS ANY RIGHT THEY MAY NOW OR HEREAFTER
HAVE, TO REMOVE ANY SUCH ACTION OR PROCEEDING, ONCE COMMENCED, TO ANOTHER COURT
ON THE GROUNDS OF FORUM NON CONVENIENS OR OTHERWISE. THE PARTIES HERETO AND EACH
CREDITOR BY ENTERING INTO THE RESPECTIVE CREDIT DOCUMENTS TO WHICH IT IS A PARTY
SHALL BE DEEMED BY THE EXECUTION AND DELIVERY OF SUCH CREDIT DOCUMENTS TO, AGREE
THAT A FINAL, NON-APPEALABLE 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.
SECTION 7.10. General Indemnity. In addition to the payment of
expenses pursuant to Section 7.5 and without duplication of obligations under
the Credit Documents, Company agrees to indemnify, pay and hold the Loan Agent,
the Lease Agent and the officers, directors, employees, agents, and affiliates
of the Loan Agent and the Lease Agent, (collectively, the "Indemnitees"),
harmless from and against any and all other liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, claims, costs, expenses and
disbursements of any kind or nature whatsoever (including, without limitation,
the reasonable fees and disbursements of counsel for any of such Indemnitees in
connection with any investigative, administrative or judicial proceeding
commenced or threatened, whether or not any of such Indemnitees shall be
designated a party thereto) that may be imposed on, incurred by, or asserted
against any Indemnitee, in any manner relating to or arising out of this
Agreement or any other agreements executed and delivered by the Company in
connection herewith (the "indemnified liabilities"); provided, that Company
shall have no obligation to an Indemnitee hereunder with respect to indemnified
liabilities arising from the gross negligence or willful misconduct of such
Indemnitee or from any action by an Indemnitee against an officer, director or
-48-
employee of an Indemnitee. To the extent that the undertaking to indemnify, pay
and hold harmless set forth in the preceding sentence may be unenforceable
because it violates any law or public policy, the Company shall contribute the
maximum portion that it is permitted to pay under applicable law to the payment
and satisfaction of all indemnified liabilities incurred by the Indemnitees or
any of them. The provisions of the undertakings and indemnification set out in
this Section 7.10 shall survive satisfaction and payment of the Company's
obligations hereunder and termination of this Agreement.
SECTION 7.11. WAIVER OF JURY TRIAL. THE PARTIES HERETO, AND EACH
CREDITOR BY ENTERING INTO THE RESPECTIVE CREDIT DOCUMENTS TO WHICH IT IS A PARTY
SHALL BE DEEMED BY THE EXECUTION AND DELIVERY OF SUCH CREDIT DOCUMENTS TO,
HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT TO A TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM CONCERNING ANY RIGHTS UNDER THIS
AGREEMENT OR UNDER ANY OTHER DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE
FUTURE BE DELIVERED IN CONNECTION HEREWITH, AND AGREE THAT ANY SUCH ACTION,
PROCEEDING OR COUNTERCLAIM SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY;
THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE AGENTS ENTERING INTO THIS
AGREEMENT.
SECTION 7.12. SERVICE OF PROCESS. THE PARTIES HERETO, AND EACH
CREDITOR BY ENTERING INTO THE RESPECTIVE CREDIT DOCUMENTS TO WHICH IT IS A PARTY
SHALL BE DEEMED BY THE EXECUTION AND DELIVERY OF SUCH CREDIT DOCUMENTS TO,
HEREBY IRREVOCABLY CONSENT TO SERVICE OF PROCESS BY MEANS OF CERTIFIED MAIL AT
THE ADDRESS PROVIDED FOR IN SECTION 7.2. NOTHING IN THIS AGREEMENT WILL AFFECT
THE RIGHT OF THE AGENTS OR THE COMPANY TO SERVE SERVICE OF PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
BOSTON CHICKEN, INC.
By: /s/ ▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
14123 Denver ▇▇▇▇ ▇▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
BANK OF AMERICA ILLINOIS, as Loan Agent
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
GENERAL ELECTRIC CAPITAL CORPORATION,
as Lease Agent
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Syndication Senior Manager
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇. ▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
-50-
EXHIBIT A
---------
Form of Guaranty
----------------
FOR VALUE RECEIVED and in consideration of any financial accommodations
heretofore or hereafter at any time made or granted to Boston Chicken, Inc., a
Delaware corporation (hereinafter called the "Company"), [by the financial
institutions who are or may become party to that certain Secured Revolving
Credit Agreement, dated as of December __, 1996 (as the same may at any time be
amended, modified or supplemented from time to time, the "Credit Agreement";
capitalized terms used herein and not otherwise defined herein have the
respective meanings assigned thereto in the Facilities Agreement referenced in
the Credit Agreement), among the Company, the lenders party thereto, Bank of
America Illinois, as letter of credit issuer (collectively with such lenders,
the "Creditors"), Bankers Trust Company, as documentary agent, and Bank of
America Illinois, as agent for the Creditors (in such capacity, the "Agent")]
[by financial institutions in connection with that certain Master Lease
Agreement No. 2, dated as of December __, 1996 (as the same may at any time be
amended, modified or supplemented from time to time, the "1996 Master Lease
Agreement"; capitalized terms used herein and not otherwise defined herein have
the respective meanings assigned thereto in the Facilities Agreement referenced
in the 1996 Master Lease Agreement), between the Company and General Electric
Capital Corporation, for itself and as agent for certain financial institutions
which may from time to time acquire participating interest therein (in its
individual capacity, "GECC"; collectively with such financial institutions the
"Creditors"; and in its capacity as agent for the Creditors, the "Agent")]/1/,
the undersigned hereby unconditionally guarantees the full and prompt payment
when due, whether at stated maturity, by required prepayment, declaration,
demand, acceleration or otherwise (including amounts that would become due but
for the operation of the automatic stay under section 362(a) of the Bankruptcy
Code (11 U.S.C.(S) 362(a)), and at all times thereafter, of all obligations of
the Company to the Creditors which arise out of or in connection with the
[Credit Agreement] [1996 Master Lease Agreement]/2/ howsoever created, arising
or evidenced, whether direct or indirect, joint or several, absolute or
contingent, or now or hereafter existing, or due or to become due (all such
obligations being hereinafter collectively called the "Liabilities"), and the
undersigned further agrees to pay all reasonable expenses (including Attorney
Costs) paid or incurred by the Agent or the Creditors in endeavoring to collect
the Liabilities, or any part thereof, and in enforcing this guaranty.
-----------------
/1/ Select appropriate clause.
/2/ Select appropriate agreement.
1
1. The undersigned agrees that, in the event of the dissolution or
insolvency of the Company, the undersigned or any Significant Subsidiary, or the
general failure to pay, or admission in writing of the inability of the Company,
the undersigned or any Significant Subsidiary to pay debts as they become due,
or an assignment by the Company, the undersigned or any Significant Subsidiary
for the benefit of creditors, or the institution of any proceeding by or against
the Company, the undersigned or any Significant Subsidiary alleging that the
Company, the undersigned or such Significant Subsidiary is insolvent or unable
to pay debts as they mature, and if such event shall occur at a time when any of
the Liabilities may not then be due and payable, the undersigned will pay to the
Agent for the benefit of the Creditors forthwith the full amount which would be
payable hereunder by the undersigned if all Liabilities were then due and
payable.
2. To secure all obligations of the undersigned hereunder, the Agent for
the benefit of the Creditors shall have a lien upon and security interest in
(and may during the continuance of any [Event of Default (such term is used
herein as defined in the Credit Agreement)] [Default (such term is used herein
as defined in the 1996 Master Lease Agreement)]/3/, without demand or notice of
any kind, at any time and from time to time when any amount shall be due and
payable by the undersigned hereunder, appropriate and apply toward the payment
of such amount, in such order of application as the Agent may elect, subject to
the terms of the Intercreditor Agreement) any and all balances, credits,
deposits, accounts or moneys of or in the name of the undersigned now or
hereafter maintained with the Agent or any Creditor and any and all property of
every kind or description of or in the name of the undersigned now or hereafter,
for any reason or purpose whatsoever, in the possession or control of, or in
transit to, the Agent or any Creditor or any agent or bailee for the Agent or
any Creditor.
3. This guaranty shall in all respects be a continuing, absolute and
unconditional guaranty, and shall remain in full force and effect
(notwithstanding, without limitation, the dissolution of the undersigned) until
all of the Liabilities have been paid in full, subject to discontinuance as to
the undersigned only upon actual receipt by the Agent of written notice from the
undersigned, or any person duly authorized and acting on behalf of the
undersigned, of the discontinuance hereof as to the undersigned; provided, that
no such notice of discontinuance shall affect or impair any of the agreements
and obligations of the undersigned hereunder with respect to any and all
Liabilities existing prior to the time of actual receipt of such notice by the
Agent, any and all Liabilities created or acquired thereafter pursuant to any
previous commitments made by
-------------------
/3/ Select appropriate reference.
2
the Creditors, any and all extensions or renewals of any of the foregoing, any
and all interest on any of the foregoing, and any and all expenses paid or
incurred by the Agent or any Creditor in endeavoring to collect any of the
foregoing and in enforcing this guaranty against the undersigned; and all of the
agreements and obligations of the undersigned under this guaranty shall,
notwithstanding any such notice of discontinuance, remain fully in effect until
all such Liabilities (including any extensions or renewals of any thereof) and
all such interest and expenses shall have been paid in full.
4. The undersigned further agrees that, if at any time all or any part of
any payment theretofore applied by the Agent or any Creditor to any of the
Liabilities is or must be rescinded or returned by the Agent or any of the
Creditors for any reason whatsoever (including, without limitation, the
insolvency, bankruptcy or reorganization of the Company), such Liabilities
shall, for the purposes of this guaranty, to the extent that such payment is or
must be rescinded or returned, be deemed to have continued in existence,
notwithstanding such application by the Agent or any Creditor, and this guaranty
shall continue to be effective or be reinstated, as the case may be, as to such
Liabilities, all as though such application by the Agent or such Creditor had
not been made.
5. The Agent or Creditor may, from time to time, whether before or after
any discontinuance of this guaranty, at its sole discretion and without notice
to the undersigned, take any or all of the following actions: (a) retain or
obtain a security interest in any property to secure any of the Liabilities or
any obligation hereunder, (b) retain or obtain the primary or secondary
obligation of any obligor or obligors, in addition to the undersigned, (c)
extend or renew for one or more periods (whether or not longer than the original
period), or alter or exchange, any of the Liabilities, or release or compromise
any obligation of the undersigned hereunder with respect to any of the
Liabilities, (d) release its security interest in, or surrender, release or
permit any substitution or exchange for, all or any part of any property
securing any of the Liabilities or any obligation hereunder, and (e) during the
continuance of any Event of Default resort to the undersigned for payment of any
of the Liabilities, whether or not the Agent or Creditor (i) shall have resorted
to any property securing any of the Liabilities or any obligation hereunder or
(ii) shall have proceeded against any other obligor primarily or secondarily
obligated with respect to any of the Liabilities (all of the actions referred to
in preceding clauses (i) and (ii), and any and all other surety defenses of the
undersigned, being hereby expressly waived by the undersigned).
6. Any amounts received by the Agent from whatsoever source on account of
the Liabilities may be applied by it toward the payment of such of the
Liabilities, and in such order of
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application, as the Agent may from time to time elect, subject to the terms of
the Intercreditor Agreement.
7. No payment made by or for the account of the undersigned pursuant to
this guaranty shall entitle the undersigned by subrogation or otherwise to any
payment by the Company or from or out of any property of the Company and the
undersigned shall not exercise any right or remedy against the Company or any
property of the Company by reason of any performance by the undersigned of this
guaranty. The undersigned waives, to the fullest extent permitted by law, all
rights of the undersigned against the Company, arising out of any payment by the
undersigned under this guaranty, whether arising by way of any subrogation,
contribution, reimbursement or otherwise and agrees that, to the extent that any
such rights may not be waived under applicable law, it will contribute such
rights to the Company as a capital contribution concurrently with the arising of
such rights.
8. The undersigned hereby expressly waives: (a) notice of the acceptance
by the Agent of this guaranty, (b) notice of the existence or creation or non-
payment of all or any of the Liabilities, (c) presentment, demand, notice of
dishonor, protest and all other notices whatsoever, and (d) all diligence in
collection or protection of or realization upon the Liabilities or any thereof,
any obligation hereunder, or any security for or guaranty of any of the
foregoing.
9. The Creditors may, from time to time, without notice to the
undersigned, assign or transfer any or all of the Liabilities or any interest
therein subject to [Section 10.5 of the Credit Agreement] [Section 16 of that
certain Participation Agreement dated as of December __, 1996, among GECC and
such other Creditors]/4/; and, notwithstanding any such assignment or transfer
or any subsequent assignment or transfer thereof, such Liabilities shall be and
remain Liabilities for the purposes of this guaranty, and each and every
immediate and successive assignee or transferee of any of the Liabilities or of
any interest therein shall, to the extent of the interest of such assignee or
transferee in the Liabilities, be entitled to the benefits of this guaranty to
the same extent as if such assignee or transferee were a Creditor.
10. The undersigned hereby warrants to the Agent and the Creditors that
the undersigned now has and will continue to have independent means of obtaining
information concerning the affairs, financial condition and business of the
Company. The Agent and the Creditors shall not have any duty or responsibility
--------------------
/4/ Select appropriate reference.
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to provide the undersigned with any credit or other information concerning the
affairs, financial condition or business of the Company which may come into the
Agent's or the Creditors' possession.
11. The undersigned hereby warrants and agrees that: (a) the undersigned
is a [corporation][partnership] duly existing and in good standing under the
laws of ________ and the undersigned is duly qualified and in good standing and
authorized to do business in each jurisdiction where, because of the nature of
its activities or properties, such qualification is required, (b) the
undersigned has full power and authority to execute and deliver this guaranty,
(c) the execution, delivery and performance by the undersigned of this guaranty
are within the undersigned's powers, have been duly authorized by all necessary
action, have received all necessary governmental approval (if any shall be
required), and do not and will not contravene or conflict with any provision of
law or of the organizational documents of the undersigned or of any agreement
binding upon the undersigned, (d) this guaranty is the legal, valid and binding
obligation of the undersigned enforceable against the undersigned in accordance
with its terms, except as enforceability may be limited by bankruptcy or other
laws relating to or affecting creditors' rights generally or by equitable
principles, and (e) this guaranty will directly or indirectly benefit the
undersigned.
12. No delay on the part of the Agent or the Creditors in the exercise of
any right or remedy shall operate as a waiver thereof, and no single or partial
exercise by the Agent or the Creditors of any right or remedy shall preclude
other or further exercise thereof or the exercise of any other right or remedy;
nor shall any modification or waiver of any of the provisions of this guaranty
be binding upon the Agent or the Creditors except as expressly set forth in a
writing duly signed and delivered on behalf of the Agent for the benefit of the
Creditors. No action of the Agent or the Creditors permitted hereunder shall in
any way affect or impair the rights of the Agent or the Creditors and the
obligations of the undersigned under this guaranty. For the purposes of this
guaranty, Liabilities shall include all obligations of the Company to the Agent
and the Creditors, notwithstanding any right or power of the Company or anyone
else to assert any claim or defense as to the invalidity or unenforceability of
any such obligation, and no such claim or defense shall affect or impair the
obligations of the undersigned hereunder. The obligations of the undersigned
under this guaranty shall be absolute and unconditional irrespective of any
circumstance whatsoever which might constitute a legal or equitable discharge or
defense of the undersigned. The undersigned hereby acknowledges that there are
no conditions to the effectiveness of this guaranty.
13. This guaranty shall be binding upon the undersigned, and upon any
successors and assigns of the undersigned.
14. THIS GUARANTY SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT
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GIVING EFFECT TO ITS PRINCIPLES OF CHOICE OF LAW. WHEREVER POSSIBLE EACH
PROVISION OF THIS GUARANTY SHALL BE INTERPRETED IN SUCH MANNER AS TO BE
EFFECTIVE AND VALID UNDER APPLICABLE LAW, BUT IF ANY PROVISION OF THIS GUARANTY
SHALL BE PROHIBITED BY OR INVALID UNDER SUCH LAW, SUCH PROVISION SHALL BE
INEFFECTIVE TO THE EXTENT OF SUCH PROHIBITION OR INVALIDITY, WITHOUT
INVALIDATING THE REMAINDER OF SUCH PROVISION OR THE REMAINING PROVISIONS OF THIS
GUARANTY.
15. The undersigned hereby irrevocably agrees that any legal action or
proceeding pertaining to this guaranty may be brought in the courts of the State
of New York or any Federal Court sitting in New York City, New York. The
undersigned hereby irrevocably agrees that service of process in such action or
proceeding may be made either by mailing, by registered or certified mail,
postage prepaid, a copy of the summons or complaint, or other legal process in
such action or proceeding to the undersigned at the address shown on the
signature page hereof. Service of process in any such action or proceeding,
effected as aforesaid, shall be effective upon receipt by the undersigned and
shall be deemed personal service upon the undersigned and shall be legal and
binding upon the undersigned for all purposes. The undersigned hereby waives,
to the fullest extent permitted by law, any objection it may now or hereafter
have to the laying of venue in any such action or proceeding in any such court
as well as any right it may now or hereafter have to remove any such action or
proceeding, once commenced, to another court on the grounds of forum non
conveniens or otherwise.
16. THE UNDERSIGNED HEREBY EXPRESSLY WAIVES ANY RIGHT TO A TRIAL BY JURY
IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS (A) UNDER THIS
GUARANTY OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR
WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR (B) ARISING FROM
ANY BANKING RELATIONSHIP EXISTING IN CONNECTION WITH THIS GUARANTY, AND AGREES
THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE
A JURY.
17. The undersigned hereby confirms that it is its intention that this
Guaranty not constitute a fraudulent transfer or conveyance for purposes of the
Bankruptcy Code, the Uniform Fraudulent Conveyance Act or any similar Federal or
state law. To effectuate the foregoing intention, the undersigned hereby
irrevocably agrees that the secured liabilities guaranteed by the undersigned
shall be limited to such amount as will, after giving effect to such maximum
amount and all other (contingent and otherwise) liabilities of the undersigned
that are relevant under such laws, result in the liabilities of the undersigned
in respect of such maximum amount not constituting a fraudulent transfer or
conveyance.
SIGNED AND DELIVERED this ____ day of _______, 199_.
[GUARANTOR]
By:_____________________________________
Title:__________________________________
Address: _____________________________
_____________________________
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