U.S. $5,000,000
CREDIT AGREEMENT
Dated as of October 31, 1996
By and Between
VICORP RESTAURANTS, INC.
as the Borrower
and
NATIONSBANK OF TEXAS, N.A.
as the Lender
TABLE OF CONTENTS
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Page
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ARTICLE I DEFINITIONS AND ACCOUNTING TERMS 1
1.01 Certain Defined Terms 1
1.02 Computation of Time Periods 7
1.03 Accounting Terms; Fiscal Periods 7
1.04 Other Definitional Provisions 7
ARTICLE II THE FACILITY AND COMMITMENT 7
2.01 The Advance Facility 7
2.02 The Advance Commitment 7
2.03 Fees 8
2.04 Reduction of the Advance Commitment 8
2.05 Payments and Computations 8
2.06 Increased Capital or Costs and Reduced Return 8
2.07 Interest Rate Contracts 9
ARTICLE III THE ADVANCE FACILITY 9
3.01 The Advances 9
3.02 Making the Advances 9
3.03 Conversion or Continuation of Advances 9
3.04 Additional Provisions Applicable to Eurodollar
Rate Advances 10
3.05 Note; Repayment 11
3.06 Interest 11
3.07 Additional Interest on Eurodollar Rate Advances 12
3.08 Pre-payments 12
3.09 Maximum Interest Rate 12
3.10 Interest Recapture 13
ARTICLE IV CONDITIONS OF EXTENSIONS OF CREDIT 13
4.01 Conditions Precedent to Initial Extension of Credit 13
4.02 Conditions Precedent to Each Extension of Credit,
Conversion or Continuation 13
ARTICLE V REPRESENTATIONS AND WARRANTIES 14
5.01 Representations and Warranties of the Borrower 14
ARTICLE VI COVENANTS OF THE BORROWER 14
6.01 Affirmative Covenants 14
6.02 Negative Covenants 14
6.03 Financial Covenants 14
ARTICLE VII EVENTS OF DEFAULT 15
7.01 Events of Default 15
ARTICLE VIII MISCELLANEOUS 16
8.01 Amendments, Etc. 16
8.02 Notices, Etc. 16
8.03 No Waiver; Remedies 16
8.04 Payments Set Aside 16
8.05 Costs, Expenses and Taxes 17
8.06 Right of Set-Off 17
8.07 Indemnification 17
8.08 Change in Accounting Principles 18
8.09 The Lender's Performance of Defaulted Acts 18
8.10 Binding Effect; Assignments; Participations 18
8.11 CHOICE OF LAW 19
8.12 CONSENT TO JURISDICTION 19
8.13 WAIVER OF JURY TRIAL 19
8.14 Term 19
8.15 Execution in Counterparts 19
8.16 Lender's Creation of Security Interest 19
CREDIT AGREEMENT
This Credit Agreement is made as of October 31, 1996 by and
between VICORP Restaurants, Inc., a Colorado corporation with an
office located at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Borrower"), and NationsBank of Texas, N.A.,
a national banking association (the "Lender"), said Credit
Agreement, as the same may be amended, modified or supplemented
from time to time, being hereinafter referred to as the "Agreement").
PRELIMINARY STATEMENT
---------------------
The Borrower and the Lender have entered into this Agreement
in order to set forth the terms and conditions under which the
Lender will, from time to time, make loans and extend other
financial accommodations to or for the benefit of the Borrower.
NOW, THEREFORE, the Borrower and the Lender agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this Agreement, the
following capitalized terms shall have the following meanings
(such meanings to be equally applicable to both the singular and
plural form of the terms defined):
"Adjusted Consolidated EBITDAR" means, for any period with
respect to the Borrower and its subsidiaries, the sum of the
amounts for such period, of (i) Operating Income, plus (ii)
depreciation, amortization and other non-cash charges deducted in
computing operating income, plus (iii) Consolidated Rental Payments.
"Advance" means an advance by the Lender to the Borrower
pursuant to Article III, and refers to a Base Rate Advance or a
Eurodollar Rate Advance (each of which shall be a "Type" of Advance).
"Advance Commitment" has the meaning specified in Section 2.02.
"Advance Facility" has the meaning specified in Section 2.01.
"Affiliate" means, with respect to any Person, any other
Person controlled by, controlling or under common control with
such Person, or having similar shareholders owning at least five
percent (5%) of such Person and such other Person, whether such
control be direct or indirect. All of the Borrower's officers,
shareholders holding in excess of five percent (5%) of any class
of capital stock of the Borrower, directors, subsidiary corporations,
joint ventures and partners shall be deemed to be the Borrower's
Affiliates for purposes of this Agreement.
"Aggregate Outstandings" means, at any time, the aggregate
principal amount of the Advances outstanding at such time.
"Alternate Base Rate" means, for any day, the greater of (a)
the sum of the Federal Funds Rate plus 0.5%, or (b) the annual
interest rate most recently announced by the Lender as its prime
rate in effect at its principal office, automatically fluctuating
upward and downward with and as specified in each announcement
without special notice to the Borrower or any other Person (which
prime rate may not necessarily represent the lowest or best rate
actually charged to a customer).
"Applicable Commitment Fee" means, on any day, the commitment
fee percentage based on the ratio of debt to capitalization, calculated
as set forth in the definition of "Applicable Margin", as follows:
Applicable
Commitment
Fee
Ratio of debt to capitalization Percentage
------------------------------------- -----------
Greater than or equal to 0.35 to 1.0 0.500%
Less than 0.35 to 1.0 but greater than
or equal to 0.30 to 1.0 0.500%
Less than 0.30 to 1.0 but greater than
or equal to 0.20 to 1.0 0.375%
Less than 0.20 to 1.0 0.250%
"Applicable Lending Office" means the Lender's Domestic Lending
Office, in the case of a Base Rate Advance, and the Lender's Eurodollar
Lending Office, in the case of a Eurodollar Rate Advance.
"Applicable Margin" means, on any day, the interest margin
over the Eurodollar Rate, based on a ratio of debt to capitalization,
as follows:
Applicable
Margin for
Eurodollar
Rate
Ratio of debt to capitalization Advances
------------------------------- ----------
Greater than or equal to 0.35 to 1.0 1.750%
Less than 0.35 to 1.0 but greater than
or equal to 0.30 to 1.0 1.625%
Less than 0.30 to 1.0 but greater than
or equal to 0.20 to 1.0 1.500%
Less than 0.20 to 1.0 1.250%
For purposes of determining the Applicable Margin, (i) the ratio
of debt to capitalization shall be the ratio of (i) the sum of
(A) Consolidated Funded Debt, plus (B) Capital Lease Obligations
of the Borrower and its subsidiaries, to (ii) the sum of (x)
Consolidated Funded Debt, plus (y) Consolidated Net Worth, plus
(z) Capital Lease Obligations of the Borrower and its subsidiaries,
and shall be calculated quarterly as of the last day of the fiscal
quarter for which the most recent quarterly financial statements have
been delivered pursuant to Section 7.01(b) of the Multi-Bank Credit
Agreement, and shall apply to all Advances made on or after the date
such financial statements are delivered, until recalculated in accordance
with this paragraph. If Borrower fails to furnish such financial
statements (or the related compliance certificate) when required
pursuant to Section 7.02(b) of the Multi-Bank Credit Agreement,
then the highest appplicable margin identified above shall apply
to all subsequent Advances until the Borrower furnishes the
required financial statements and compliance certificate. The
initial calculation as of the Closing Date shall be based upon
the financial statements dated as of July 31, 1996.
"Bankruptcy Code" means Title 11 of the United States Code (11 U.S.C.
101 et seq.), as amended from time to time.
"Base Rate Advance" means an Advance that bears interest as provided in
Section 3.06(a).
"Benefit Plan" means an employee benefit plan as defined in
Section 3(35) of ERISA (other than a Multi-employer Plan) in
respect of which the Borrower or any ERISA Affiliate is, or
within the immediately preceding six (6) years was, an "employer"
as defined in Section 3(5) of ERISA.
"Borrowing" means a borrowing consisting of one or more
Advances of the same Type made on the same day by the Lender.
"Business Day" means a day of the year on which banks are
not required or authorized to close in Dallas, Texas, and if the
applicable Business Day relates to any Eurodollar Rate Advance, a
day of the year on which dealings are carried on in the London
interbank market.
"Capital Lease" means, as applied to any Person, any lease
of any property (whether real, personal or mixed) by that Person
as lessee that, in conformity with GAAP, is or should be
accounted for as a capital lease on the balance sheet of such Person.
"Capital Lease Obligations" means, as applied to any Person,
the obligations of such Person as lessee under leases that are
Capital Leases.
"Consolidated Fixed Charges" means, for any period, (i)
consolidated gross cash payments of interest expense (including
the interest component of Capital Leases) of the Borrower and its
subsidiaries, including, without limitation, all commissions,
discounts and other fees and charges owed with respect to letters
of credit, all as determined in conformity with GAAP, plus (ii)
Consolidated Rental Payments for such period, plus (iii) all
scheduled principal payments required to be made by the Borrower
or any of its subsidiaries during such period with respect to any Debt.
"Consolidated Funded Debt" means, as at any date of
determination, all interest bearing indebtedness, obligations and
other liabilities of the Borrower and its subsidiaries for
borrowed money or evidenced by bonds, debentures, acceptances,
notes or other similar instruments (whether such interest arises
as a result of accrual or accretion).
"Consolidated Net Worth" means, as at any date of
determination, the amount by which consolidated total assets of
the Borrower and its subsidiaries, determined in conformity with
GAAP, exceed consolidated total liabilities of the Borrower and
its subsidiaries, determined in conformity with GAAP.
"Consolidated Rental Payments" means, for any period, the
aggregate amount of all rents paid or accrued (net of sublease
rents paid or accrued) under all Operating Leases of the Borrower
or any of its consolidated subsidiaries as lessee, as determined
in conformity with GAAP.
"Conversion Date" means, with respect to any Advance, the
date that such Advance, if a Base Rate Advance, is converted into
a Eurodollar Rate Advance, or, if a Eurodollar Rate Advance, is
converted into a Base Rate Advance, in either case in accordance
with the procedures described in Section 3.03.
"Costs and Expenses" has the meaning specified in Section 8.05.
"Debt" means, as applied to any Person, (i) indebtedness for
borrowed money of such Person, (ii) obligations of such Person
evidenced by bonds, debentures, notes or other similar
instruments, (iii) obligations of such Person to pay the deferred
purchase price of property or services, except trade accounts
payable and accrued expenses arising in the ordinary course of
business but only if and so long as the same are payable on
available trade terms, (iv) Capital Lease Obligations of such
Person, (v) obligations of such Person under direct or indirect
guaranties in respect of, and obligations (contingent or
otherwise) to purchase or otherwise acquire, or otherwise to
assure a creditor against loss in respect of, indebtedness or
obligations of others of the kinds referred to in clauses (i)
through (iv) above, and (vi) liabilities of such Person in
respect of unfunded vested benefits under Benefit Plans.
"Default" means an event which with the lapse of time or the
giving of notice or both would constitute an Event of Default.
"Domestic Lending Office" means the office of the Lender
specified as its "Domestic Lending Office" on the signature pages
hereof or such other office as the Lender may from time to time
specify to the Borrower.
"Eligible Interest Rate Contract" has the meaning specified
in Section 2.07.
"ERISA" means the Employee Retirement Income Security Act of
1974, any amendments thereto, any successor statute, and any
regulations or guidance promulgated thereunder.
"ERISA Affiliate" means any (i) corporation which is a
member of the same controlled group of corporations (within the
meaning of Section 414(b) of the IRC) as the Borrower, (ii)
partnership or other trade or business (whether or not
incorporated) under common control (within the meaning of Section
414(c) of the IRC) with the Borrower, or (iii) member of the same
affiliated service group (within the meaning of Section 414(m) of
the IRC) as the Borrower, any corporation described in clause (i)
above or any partnership or trade or business described in clause
(ii) above.
"Eurocurrency Liabilities" has the meaning assigned to that
term in Regulation D of the Board of Governors of the Federal
Reserve System, as in effect from time to time.
"Eurodollar Lending Office" means the office of the Lender
specified as its "Eurodollar Lending Office" on the signature
pages hereof, or such other office as the Lender may from time to
time specify to the Borrower.
"Eurodollar Rate" means, for any Eurodollar Rate Advance for
any Interest Period therefor, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) appearing on
Telerate Page 3750 (or any successor page) as the London
interbank offered rate for deposits in Dollars at approximately
11:00 a.m. (London time) two Business Days prior to the first day
of such Interest Period for a term comparable to such Interest
Period. If for any reason such rate is not available, the term
"Eurodollar Rate" shall mean, for any Eurodollar Rate Advance for
any Interest Period therefor, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) appearing on
Reuters Screen LIBO Page as the London interbank offered rate for
deposits in Dollars at approximately 11:00 a.m. (London time) two
Business Days prior to the first day of such Interest Period;
provided, however, that if more than one rate is specified on
Reuters Screen LIBO Page, the applicable rate shall be the
arithmetic mean of all such rates.
"Eurodollar Rate Advance" means an Advance which bears interest
as provided in Section 3.06(b).
"Eurodollar Rate Reserve Percentage" means, for any Interest
Period for any Eurodollar Rate Advance, the reserve percentage
applicable during such Interest Period (or if more than one such
percentage shall be so applicable, the daily average of such
percentages for those days in such Interest Period during which
any such percentage shall be so applicable), with respect to the
Lender, under regulations issued from time to time by the Board
of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including, without
limitation, any emergency, supplemental or other marginal reserve
requirement), if any, for the Lender, with respect to liabilities
or assets consisting of or including Eurocurrency Liabilities
having a term equal to such Interest Period.
"Event of Default" has the meaning specified in Section 7.01.
"Federal Funds Rate" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to
the weighted average of the rates on overnight federal funds
transactions with members of the Federal Reserve System arranged
by federal funds brokers, as published for such day (or, if such
day is not a Business Day, for the immediately preceding Business
Day) by the Federal Reserve Bank of New York, or, if such rate is
not so published for any day which is a Business Day, the average
of the quotations for such day on such transactions received by
the Lender from three federal funds brokers of recognized
standing selected by it.
"Final Order" has the meaning specified in Section 8.07.
"GAAP" means generally accepted accounting principles set
forth in the rules, regulations, statements, opinions and
pronouncements of the American Institute of Certified Public
Accountants and the Financial Accounting Standards Board (or
agencies with similar functions and of comparable stature and
authority within the accounting profession), which are applicable
to the circumstances as of the date of determination.
"Governmental Authority" means any nation or government, any
federal, state, city, town, municipality, county, local or other
political subdivision thereof or thereto and any department,
commission, board, bureau, instrumentality, agency or other
entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"Indemnified Parties" has the meaning specified in Section 8.07(a).
"Interest Period" means, for each Eurodollar Rate Advance, a
period of one (1), two (2) or three (3) months, as the Borrower
may select, upon notice received by the Lender not later than
noon (Dallas time) on the third Business Day prior to the first
day of such period, and commencing on the date of such Advance,
the date of continuation of such Advance pursuant to Section 3.03
or the date of conversion of a Base Rate Advance pursuant to
Section 3.03; provided, however, that:
(i) the aggregate principal amount of all Advances having
Interest Periods ending after any Principal Repayment Date shall
not exceed the principal amount of all Advances permitted to be
outstanding after giving effect to the principal payments to be
made on or prior to such Principal Repayment Date;
(ii) the Borrower may not select any Interest Period that
ends after the Maturity Date;
(iii) Interest Periods commencing on the same date for
Advances shall be of the same duration; and
(iv) whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last day
of such Interest Period shall be extended to occur on the next
succeeding Business Day, provided, however, that if such
extension would cause the last day of such Interest Period to
occur in the next following calendar month, the last day of such
interest Period shall occur on the next preceding Business Day.
"Interest Period Expiration Date" means the last day of
any Interest Period for any Eurodollar Rate Advance.
"Interest Rate Contracts" means interest rate swap
agreements, interest rate collar agreements, options on any of
the foregoing, or any other agreements or arrangements designed
to provide protection against fluctuations in interest rates.
"IRC" means the Internal Revenue Code of 1986, as
amended to the date hereof and from time to time hereafter, any
successor statute and any regulations or guidance promulgated
thereunder.
"Lien" means any mortgage, deed of trust, pledge,
hypothecation, assignment, deposit arrangement, security
arrangement, security interest, encumbrance for the payment of
money, lien (statutory or other), preference, priority or other
security agreement or preferential arrangement of any kind or
nature whatsoever.
"Loan Documents" means this Agreement, the Note, the
Multi-Bank Credit Agreement, and each of the other instruments,
documents and agreements executed and/or delivered by the
Borrower in connection herewith and therewith.
"Maturity Date" means October 30, 1997.
"Maximum Amount" and "Maximum Rate" respectively mean
the maximum non-usurious amount and the maximum non-usurious rate
of interest that, under applicable law, the Lender is permitted
to contract for, charge, take, reserve or receive on the Obligations.
"Multi-Bank Credit Agreement" means the Credit
Agreement of even date herewith among the Borrower, the financial
institutions named therein, and NationsBank of Texas, N.A., as
agent for itself and such other financial institutions, evidencing
a total line of credit up to $35,000,000, consisting of (i) a revolving
credit facility and (ii) a letter of credit facility, as such Credit
Agreement may be amended from time to time with the consent of the Lender
hereunder.
"Multiemployer Plan" means a Plan maintained pursuant
to a collective bargaining agreement or any other arrangement to
which the Borrower or any ERISA Affiliate is a party and to which
more than one employer is obligated to make contributions.
"Note" has the meaning specified in Section 3.05.
"Notice of Borrowing" has the meaning specified in Section 3.02(a).
"Notice of Continuation or Conversion" has the meaningspecified
in Section 3.03(b).
"Obligations" means and includes all loans, advances,
debts, liabilities, obligations, covenants and duties owing to
the Lender from the Borrower of any kind or nature, present or
future, arising under any of the Loan Documents, whether or not
for the payment of money, whether arising by reason of an
extension of credit, opening of a letter of credit, loan,
guaranty, indemnification or in any other manner, whether direct
or indirect, absolute or contingent, due or to become due, now
existing or hereafter arising and the performance obligations of
the Borrower under any Eligible Interest Rate Contracts. The
term "Obligations" includes, without limitation, the principal
amount of all Advances and interest, charges, expenses, fees,
attorneys' and paralegals' fees and any other sums chargeable to
the Borrower under this Agreement.
"Operating Lease" means, as applied to any Person, any
lease of any property (whether real, personal or mixed) by that
Person as lessee which is not a Capital Lease.
"PBGC" means the Pension Benefit Guaranty Corporation
and any Person succeeding to the functions thereof.
"Person" means an individual, partnership, corporation
(including a business trust), joint stock company, trust,
unincorporated association, joint venture or other entity, or a
government or any political subdivision or agency thereof.
"Plan" means an employee pension benefit plan that is
covered by Title IV of ERISA or subject to the minimum funding
standards under Section 412 of the IRC as to which the Borrower
or any ERISA Affiliate may have any liability.
"Principal Repayment Date" means any date on which an
installment of the aggregate outstanding principal amount of the
Advances is due under the Note.
"Prior Agreement" means the Second Amended and Restated
Credit Agreement dated as of June 18, 1993, among Borrower, the
financial institutions named therein as lenders, and Citibank,
N.A., as agent for such lenders, as amended.
"Rate Adjustment Period" means a period (i) commencing
on the first day of the month next succeeding the date that the
Lender receives internal financial statements acceptable to it
demonstrating that the Borrower has maintained, for two (2)
consecutive fiscal quarters, the Required Rate Adjustment Level,
and (ii) continuing for so long as the Borrower continues to
maintain such Required Rate Adjustment Level.
"Reportable Event" means any of the events described in
Section 4043 of ERISA or the regulations issued thereunder.
"Required Rate Adjustment Level" means a ratio of
Adjusted Consolidated EBITDAR to Consolidated Fixed Charges,
measured as of the end of the most recently ended fiscal quarter
for the period of four fiscal quarters ending on such date, of at
least 1.75 to 1.
"Single Employer Plan" means a Plan maintained by the
Borrower or any ERISA Affiliate for employees of the Borrower or
such ERISA Affiliate.
"Taxes" means, for any Person, taxes, assessments or
other governmental charges or levies imposed upon it, its income,
or any of its properties, franchises or assets.
"Termination Date" means the earliest to occur of (i)
the Maturity Date, or (ii) the termination in whole of the
Advance Commitment pursuant to Section 7.01.
"Unfunded Liabilities" means, (i) in the case of a
Single Employer Plan, the amount, if any, by which the present
value of all vested nonforfeitable benefits under such Plan
exceeds the fair market value of all Plan assets allocable to
such benefits, all determined as of the most recent valuation
date for such Plan, and (ii) in the case of a Multiemployer Plan,
the withdrawal liability of the Borrower or any ERISA Affiliate
under such Plan.
"Unused Commitment" means, at any time, the excess of
the Advance Commitment over the Aggregate Outstandings at such time.
SECTION 1.02. Computation of Time Periods. In this Agreement
in the computation of periods of time from a specified date to a
later specified date, the word "from" means "from and including"
and the words "to" and "until" each means "to but excluding."
SECTION 1.03. Accounting Terms; Fiscal Periods. Except as
otherwise permitted pursuant to Section 8.08 all accounting terms
not specifically defined herein shall be construed in accordance
with GAAP. All references in this Agreement to any fiscal period
shall refer to a fiscal period of the Borrower, unless otherwise
specified.
SECTION 1.04. Other Definitional Provisions. References to
"Sections", "Articles", and "Exhibits" shall be to Sections,
Articles, and Exhibits, respectively, of this Agreement unless
otherwise specifically provided. Certain defined terms used in
sections which are incorporated herein by reference to the Multi-
Bank Credit Agreement shall have the meanings assigned to such
terms in the Multi-Bank Credit Agreement.
ARTICLE II
THE FACILITY AND COMMITMENT
SECTION 2.01. The Advance Facility. On and subject to the
terms and conditions hereinafter set forth the Lender agrees to extend
credit and other financial accommodations of the kind described
below to the Borrower, from time to time, on any Business Day
during the period from the date hereof until the Termination Date
by making Advances to the Borrower pursuant to Article III (the
"Advance Facility").
SECTION 2.02. The Advance Commitment. The credit extended by
the Lender by making Advances under the Advance Facility shall be
in an aggregate principal amount of Advances not to exceed
$5,000,000 at any time outstanding (the "Advance Commitment"),
during the period from the date hereof to the Termination Date.
The Borrower also agrees to pay to the Lender a commitment fee on
the average daily Unused Commitment from the date of this
Agreement until the Termination Date equal to the Applicable
Commitment Fee per annum. Such commitment fee shall be payable
on the last day of each March, June, September and December,
commencing December 31, 1996, during the term of this Agreement,
and on the Termination Date.
SECTION 2.03. Fees. The Borrower agrees to pay the Lender the
upfront fee described in the fee letter agreement of even date
herewith between the Borrower and the Lender.
SECTION 2.04. Reduction of the Advance Commitment. The Borrower
shall have the right, upon at least thirty (30) Business Days'
notice to the Lender, to terminate in whole or reduce in part the
Advance Commitment by an amount not exceeding the Unused Commitment;
provided, however, that each partial reduction shall be in the amount
of $1,000,000 and in integral multiples of $1,000,000 in excess of that
amount.
SECTION 2.05. Payments and Computations.
(a) The Borrower shall make each payment hereunder by
wire transfer of immediately available funds not later than Noon
(Dallas time) on the day when due in United States Dollars to the
Lender, at the Lender's address referred to in Section 8.02.
(b) The Borrower hereby authorizes the Lender, if and
to the extent payment owed to the Lender is not made when due
hereunder, to charge from time to time against any or all of the
Borrower's accounts with the Lender any amount so due, or, upon
notice to the Borrower, to make Base Rate Advances in the amount
of and in payment of such amounts.
(c) All computations of interest on Base Rate Advances
shall be made by the Lender, on the basis of a year of 365 or 366
days, as the case may be, for the actual number of days
(including the first day but excluding the last day) occurring in
the period for which such interest is payable. All computations
of interest on Eurodollar Rate Advances and of fees (including,
without limitation, all computations of interest pursuant to
Section 3.07) shall be made by the Lender, on the basis of a year
of 360 days, in each case for the actual number of days
(including the first day but excluding the last day) occurring in
the period for which such interest or fees are payable. Each
determination by the Lender of an interest rate hereunder shall
be conclusive and binding for all purposes, absent manifest error.
(d) Whenever any payment hereunder shall be stated to
be due on a day other than a Business Day, such payment shall be
made on the next succeeding Business Day, and such extension of
time shall in such case be included in the computation of payment
of interest or fees, as the case may be; provided, however, that
if such extension would cause payment of interest on or principal
of Eurodollar Rate Advances to be made in the next following
calendar month, such payment shall be made on the immediately
preceding Business Day.
SECTION 2.06. Increased Capital or Costs and Reduced Return.
(a) If, due to either (i) the introduction of or any change (other
than any change by way of imposition or increase of reserve
requirements included in the Eurodollar Rate Reserve Percentage)
in or in the interpretation of any law or regulation; or (ii) the
compliance with any guideline or request from any central bank or
other Governmental Authority (whether or not having the force of
law), there shall be any increase in the cost to the Lender of
agreeing to make or making, funding or maintaining Eurodollar
Rate Advances, by an amount deemed by the Lender to be material,
then the Borrower shall, from time to time, promptly following
demand by the Lender, pay to the Lender such additional amount or
amounts as will compensate the Lender for such increased cost.
(b) If after the date hereof, the Lender shall have
determined that the adoption of any applicable law, rule or
regulation regarding capital adequacy, or any change therein, or
any change in the interpretation or administration thereof by any
Governmental Authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance
by the Lender (or its Applicable Lending Office) with any request
or directive regarding capital adequacy (whether or not having
the force of law) of any such Governmental Authority, central
bank or comparable agency, has or would have the effect of
reducing the rate of return on the Lender's capital as a
consequence of its obligations hereunder to a level below that
which the Lender could have achieved but for such adoption,
change or compliance by an amount deemed by the Lender to be
material, then the Borrower shall, from time to time, promptly
following demand by the Lender, pay to the Lender, such
additional amount or amounts as will compensate the Lender for
such reduction.
(c) The Lender agrees to promptly notify the Borrower
of any event of which the Lender has knowledge, occurring after
the date hereof, which will entitle the Lender to compensation
pursuant to this Section 2.06 and will designate a different
Applicable Lending Office if such designation will avoid the need
for, or reduce the amount of, such compensation and will not, in
the judgment of the Lender, be otherwise disadvantageous to the
Lender. A certificate of the Lender claiming compensation under
this Section 2.06 and setting forth the additional amount or
amounts to be paid to the Lender hereunder, submitted to the
Borrower, shall be conclusive in the absence of manifest error.
In determining such amount, the Lender may use any reasonable
averaging and attribution methods.
SECTION 2.07. Interest Rate Contracts. At any time the Lender
may, but shall have no obligation to, enter into Interest Rate
Contracts with respect to the Advances, provided that the
notional amount for all such Interest Rate Contracts in effect at
any time shall not exceed $5,000,000 in the aggregate, and each
such Interest Rate Contract shall be deemed an "Eligible Interest
Rate Contract" (whether or not the aggregate notional amount
subsequently exceeds such limit).
ARTICLE III
THE ADVANCE FACILITY
SECTION 3.01. The Advances. The Lender agrees, on the terms and
conditions hereinafter set forth, to make Advances to the
Borrower from time to time on any Business Day during the period
from the date hereof until the Termination Date in an amount not
to exceed the Advance Commitment. Each Advance made by the
Lender shall be in an amount not less than $250,000. Each
Borrowing shall consist of Advances made on the same day by the
Lender. Within the limits of the Advance Commitment, the
Borrower may borrow pursuant to this Section 3.01, prepay
pursuant to Section 3.08, and reborrow under this Section 3.01.
SECTION 3.02. Making the Advances.
(a) Each Borrowing shall be made on notice by the Borrower
to the Lender, given not later than 12:00 noon (Dallas time) (i)
in the case of a Borrowing comprised of Base Rate Advances, on
the date of the proposed Borrowing; and (ii) in the case of a
Borrowing comprised of Eurodollar Rate Advances, on the third
Business Day prior to the date of the proposed Borrowing;
provided, however, that if a Default or an Event of Default has
occurred and is continuing, the Borrower shall not be entitled to
request Borrowings comprised of Eurodollar Rate Advances and the
Lender shall not be required to make any Advances. Each such
notice of a borrowing (a "Notice of Borrowing") shall be by
telephone, confirmed immediately in writing (whether by telecopy,
telex, cable or otherwise), in substantially the form of Exhibit A,
specifying therein the requested (i) date of such Borrowing
(which shall be a Business Day); (ii) Type of Advances comprising
such Borrowing; (iii) amount of such Borrowing; and (iv) Interest
Period for such Advance in the case of a requested Borrowing
comprised of Eurodollar Rate Advances. Upon fulfillment of the
applicable conditions set forth in Article IV, the Lender will
make same day funds available to the Borrower at the Lender's
address referred to in Section 8.02 in an amount equal to the
amount requested by the Borrower for such Borrowing on the date
requested by the Borrower therefor.
(b) Each Notice of Borrowing shall be irrevocable and
binding on the Borrower. In the case of any Borrowing that the
related Notice of Borrowing specifies is to be comprised of
Eurodollar Rate Advances, the Borrower shall indemnify the Lender
against any loss, cost or expense incurred by the Lender as a
result of any failure by the Borrower to fulfill, on or before
the date specified in such Notice of Borrowing for such
Borrowing, the applicable conditions set forth in Article V,
including, without limitation, any loss (including loss of
anticipated profits), cost or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired
by the Lender to fund the Advance to be made by the Lender as
part of such Borrowing when such Advance, as a result of such
failure, is not made on such date.
SECTION 3.03. Conversion or Continuation of Advances.
(a) The Borrower shall have the option (i) to convert at
any time all or any part of the outstanding Base Rate Advances
comprising the same Borrowing into one or more Eurodollar Rate
Advances, each for an Interest Period commencing on the applicable
Conversion Date; (ii) to convert on any Interest Period Expiration
Date all of the outstanding Eurodollar Rate Advances comprising the
same Borrowing into one or more Base Rate Advances; or (iii) to
continue on any Interest Period Expiration Date all or any part of
outstanding Eurodollar Rate Advances comprising the same Borrowing
as one or more Eurodollar Rate Advances, each for an Interest Period
commencing on such Interest Period Expiration Date; provided, however,
that (A) if the Borrower shall not have exercised its options set
forth in either clauses (ii) or (iii) of this Section 3.03(a) with
respect to any Eurodollar Rate Advances comprising a Borrowing by
delivery to the Lender of a Notice of Continuation or Conversion in
accordance with the terms of Section 3.03(b), the Borrower shall
be deemed to have irrevocably elected to convert such Eurodollar
Rate Advances into Base Rate Advances on the Interest Period
Expiration Date for such Advances, and (B) if a Default or an
Event of Default has occurred and is continuing the Borrower
shall not be entitled to convert Base Rate Advances or continue
Eurodollar Rate Advances.
(b) Each continuation or conversion of Advances pursuant to
this Section 3.03 shall be made on notice by the Borrower to the
Lender given not later than Noon (Dallas time) on (i) in the case
of the conversion of one or more Eurodollar Rate Advances into
Base Rate Advances, the first Business Day prior to the date of
the proposed conversion, and (ii) in every other instance, the
third Business Day prior to the date of the proposed conversion
or continuation. Each such notice of continuation or conversion
(a "Notice of Continuation or Conversion") shall be by telephone,
confirmed immediately in writing (whether by telecopy, telex,
cable or otherwise), in substantially the form of Exhibit B,
specifying therein the requested (i) date of such continuation or
conversion (which shall be a Business Day); (ii) amount of the
Advances to be converted or continued; (iii) nature of such
conversion or continuation; and (iv) Interest Periods for such
Advances, in the case of a conversion of one or more Base Rate
Advances to a Eurodollar Rate Advance or a continuation of one or
more Eurodollar Rate Advances.
(c) Each Notice of Continuation or Conversion shall be
irrevocable and binding upon the Borrower. In the case of any
Advance which the related Notice of Continuation or Conversion
specifies is to be a Eurodollar Rate Advance, the Borrower shall
indemnify the Lender against any loss, cost or expense incurred
by the Lender as a result of any failure to fulfill on or before
the date of the continuation or conversion specified in such
Notice of Continuation or conversion for such Advance the
applicable conditions set forth in Article IV, including, without
limitation, any loss (including loss of anticipated profits),
cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by the Lender to
fund such Advance when such Advance is not converted or
continued, as the case may be, on such date.
SECTION 3.04. Additional Provisions Applicable to Eurodollar
Rate Advances. Anything in Section 3.02 or 3.03 above to the
contrary notwithstanding:
(a) If the Lender shall notify the Borrower that the
introduction of or any change in or in the interpretation of any
law or regulation makes it unlawful, or that any central bank or
other Governmental Authority asserts that it is unlawful, for the
Lender or its Eurodollar Lending Office to perform its obligations
hereunder to make Eurodollar Rate Advances or to fund or maintain
Eurodollar Rate Advances hereunder, the right of the Borrower to
select Eurodollar Rate Advances for any Borrowing or to convert
any Base Rate Advances to Eurodollar Rate Advances shall be suspended
until the Lender shall notify the Borrower that the circumstances
causing such suspension no longer exist. Upon the Lender's giving
of the notice to the Borrower referred to in this Section 3.04(a),
the Borrower shall, upon at least one (1) Business Day's written
notice to the Lender, or if permitted by applicable law no later
than the date permitted thereby, in the Borrower's sole discretion,
either (i) prepay, notwithstanding the provisions of Section 3.08
hereof, the principal amount of all outstanding Eurodollar Rate
Advances together with accrued interest thereon to the date of
payment; or (ii) convert, notwithstanding the provisions of Section 3.03,
all Eurodollar Rate Advances then outstanding into Base Rate
Advances. Upon any such prepayment or conversion of a Eurodollar
Rate Advance, the Borrower shall reimburse the Lender in respect
thereof pursuant to Section 8.05(b).
(b) If the Lender shall, on the date of the making of
any requested Borrowing comprised of Eurodollar Rate Advances,
the continuation pursuant to Section 3.03 of any Eurodollar Rate
Advances or the conversion pursuant to Section 3.03 of any Base
Rate Advances, notify the Borrower that it is unable, for any
reason whatsoever, to obtain timely information for determining
the Eurodollar Rate for such Advances, the right of the Borrower
to select Eurodollar Rate Advances for such Borrowing or any
Borrowing subsequently made, converted or continued shall be
suspended until the Lender shall notify the Borrower that the
circumstances causing such suspension no longer exist and each
Advance requested to be converted into or made or continued as a
Eurodollar Rate Advance shall be a Base Rate Advance.
(c) If the Lender shall, at least one (1) Business Day
prior to the date of the making of any requested Borrowing to be
comprised of Eurodollar Rate Advances, the continuation pursuant
to Section 3.03 of any Eurodollar Rate Advances or the conversion
pursuant to Section 3.03 of any Base Rate Advances, notify the
Borrower that the Eurodollar Rate for such Advances will not
adequately reflect the cost to the Lender of making or funding
such Advances, the right of the Borrower to select Eurodollar
Rate Advances for such Borrowing or any Borrowing subsequently
made, converted or continued shall be suspended until the Lender
shall notify the Borrower that the circumstances causing such
suspension no longer exist and each Advance by the Lender
requested to be converted into or made or continued as a
Eurodollar Rate Advance shall be a Base Rate Advance.
(d) Any Taxes payable by the Lender or ruled (by a
Governmental Authority) payable by the Lender in respect of any
Loan Document shall, if permitted by law, be paid by the
Borrower, together with interest and penalties, if any (except
for (i) (1) Taxes imposed on or measured by the overall net
income of the Lender, and (2) franchise or similar taxes of the
Lender, and (ii) interest and penalties incurred as a result of
the gross negligence or willful misconduct of the Lender). The
Lender shall notify the Borrower and deliver to the Borrower a
certificate setting forth in reasonable detail the calculation of
the amount of payable Taxes, which certificate is conclusive and
binding (absent manifest error), and the Borrower shall promptly
pay that amount to the Lender. If the Lender subsequently
receives a refund of the Taxes paid to it by the Borrower, then
the Lender shall promptly pay the refund to the Borrower.
(e) The Borrower Agrees To Indemnify The Lender Against,
And Pay To It Upon Demand, Any Funding Losses, Costs or
Expenses Described In Section 3.02(b), 3.03(c) or 8.05(b) With
Respect To Eurodollar Rate Advances. The provisions of and
undertakings and indemnification set forth in this paragraph
shall survive the satisfaction and payment of the Obligations and
termination of this Agreement.
SECTION 3.05. Note; Repayment. The Lender's Advances shall be
evidenced by a Revolving Loan Note executed by the Borrower and
delivered to the Lender pursuant to Article IV (as amended,
modified, substituted or supplemented from time to time, the
"Note"), substantially in the form of Exhibit C, in an original
principal amount equal to the maximum Advance Commitment on the
date hereof. Unless the Termination Date shall have earlier
occurred, the Borrower shall repay the principal amount of the
Advances outstanding on the Maturity Date.
SECTION 3.06. Interest. The Borrower shall pay interest on
the unpaid principal amount of each Advance from the date of such
Advance until such principal amount shall be paid in full, at the
following rates specified below:
(a) Base Rate Advances. If such Advance is a Base Rate
Advance, at a rate per annum equal at all times to the Alternate
Base Rate in effect from time to time, payable monthly in arrears
on the last Business Day of each calendar month and on the date
such Base Rate Advance shall be paid in full; provided, however,
that any amount of principal which is not paid when due (whether
at stated maturity, by acceleration or otherwise) shall bear
interest, from the date on which such amount is due until such
amount is paid in full, payable on demand, at a rate per annum
equal at all times to two percent (2.0%) per annum above the
Alternate Base Rate in effect from time to time.
(b) Eurodollar Rate Advances. If such Advance is a
Eurodollar Rate Advance, at a rate per annum equal at all times
during any Interest Period for such Advance to the sum of the
Applicable Margin plus the Eurodollar Rate for such Advance for
such Interest Period, payable in arrears on the last day of such
Interest Period; provided, however, that any amount of principal
which is not paid when due (whether at stated maturity, by
acceleration or otherwise) shall bear interest, from the date on
which such amount is due until such amount is paid in full,
payable on demand, at a rate per annum equal at all times to two
percent (2.0%) per annum above the Alternate Base Rate in effect
from time to time.
(c) Default Interest. Notwithstanding anything to the
contrary in Sections 3.06(a) and 3.06(b), effective upon the
occurrence of an Event of Default and for as long thereafter as
such Event of Default shall be continuing, all amounts outstanding
under the Loan Documents shall bear interest at a rate per annum
equal at all times to two percent (2.0%) per annum above the Alternate
Base Rate in effect from time to time, payable on demand and, absent
demand, at the times specified in Section 3.06(a) with respect to
Base Rate Advances and at the times specified in Section 3.06(b)
with respect to Eurodollar Rate Advances.
(d) Rate Adjustment Periods. Notwithstanding anything to
the contrary in Sections 3.06(a) and 3.06(b) but subject to
Section 3.06(c) above, at all times during a Rate Adjustment
Period, interest on each Eurodollar Rate Advance shall be at a
rate of one-quarter of one percent (0.25%) below the rate that
would otherwise be payable under Section 3.06(b), provided,
however, that (A) no reduction in the interest rate applicable to
any Eurodollar Rate Advance outstanding on the commencement of a
Rate Adjustment Period shall take effect until such Eurodollar
Rate Advance has been continued or converted pursuant to Section
3.03; (B) no reduction in the interest rate applicable to any
Eurodollar Rate Advance shall reduce such rate below the sum of
1.25% plus the Eurodollar Rate for such Advance for such Interest
Period; and (C) interest on any amount of principal which is not
paid when due (whether at stated maturity, by acceleration or
otherwise) shall continue to be paid at the rates otherwise
specified in Section 3.06(a) or 3.06(b) for such past due amounts.
SECTION 3.07. Additional Interest on Eurodollar Rate Advances.
The Borrower shall pay to the Lender so long as the Lender shall
be required under regulations of the Board of Governors of the
Federal Reserve System to maintain reserves with respect to
liabilities or assets consisting of or including Eurocurrency
Liabilities, additional interest on the unpaid principal amount
of each Eurodollar Rate Advance of the Lender, from the date of
such Advance until such principal amount is paid in full, at an
interest rate per annum equal at all times to the remainder
obtained by subtracting (i) the Eurodollar Rate for the Interest
Period for such Advance from (ii) the rate obtained by dividing
such Eurodollar Rate by a percentage equal to 100% minus the
Eurodollar Rate Reserve Percentage of the Lender for such
Interest Period, payable on each date on which interest is
payable on such Advance. Such additional interest so notified to
the Borrower by the Lender shall be payable to the Lender on the
dates specified for payment of interest for such Advance in Section 3.06.
SECTION 3.08. Pre-payments. The Borrower may prepay the
outstanding amount of any Advance in whole or in part with
accrued interest to the date of such prepayment on the amount
prepaid; provided, however, that (i) notice of any prepayment of
a Eurodollar Rate Advance must be given at least three (3)
Business Days prior to the date of prepayment; (ii) notice of any
prepayment of a Base Rate Advance must be given not later than
12:00 noon (Dallas time) on the date of prepayment; (iii) any
prepayment of any Eurodollar Rate Advance shall be made on, and
only on, the last day of an Interest Period for such Advance; and
(iv) each partial prepayment shall be in a principal amount of
$250,000 and integral multiples of $50,000 in excess of that
amount and, if made after the Termination Date, shall be applied
to the principal installments on the Note in the inverse order of
their maturities.
SECTION 3.09. Maximum Interest Rate. Regardless of any
provision contained in any Loan Document or any document related
thereto, it is the intent of the parties to this Agreement that
the Lender shall not contract for, charge, take, reserve, receive
or apply, as interest on all or any part of the Obligations any
amount in excess of the Maximum Rate or the Maximum Amount or
receive any unearned interest in violation of any applicable law,
and, if the Lender ever does, then any excess shall be treated as
a partial repayment or prepayment of principal and any remaining
excess shall be refunded to the Borrower. In determining if the
interest paid or payable exceeds the Maximum Rate, the Borrower
and the Lender shall, to the maximum extent permitted under
applicable law, (a) treat all Borrowings as but a single extension
of credit (and the Lender and the Borrower agree that is the case
and that provision in this Agreement for multiple Borrowings is for
convenience only), (b) characterize any nonprincipal payment as an
expense, fee or premium rather than as interest, (c) exclude voluntary
repayments or prepayments and their effects, and (d) amortize, prorate,
allocate and spread the total amount of interest throughout the entire
contemplated term of the Obligations. However, if the Obligations are
paid in full before the end of their full contemplated term, and if the
interest received for its actual period of existence exceeds the
Maximum Amount, the Lender shall refund any excess (and the Lender may
not, to the extent permitted by law, be subject to any penalties
provided by any laws for contracting for, charging, taking, reserving
or receiving interest in excess of the Maximum Amount). If the laws
of the State of Texas are applicable for purposes of determining the
"Maximum Rate" or the "Maximum Amount," then those terms mean the
"indicated rate ceiling" from time to time in effect under
Article 5069-1.04, Title 79, Revised Civil Statutes of Texas, as
amended. The Borrower agrees that Chapter 15, Subtitle 79, Revised
Civil Statutes of Texas, 1925, as amended (which regulates certain
revolving credit loan accounts and revolving tri-party accounts),
does not apply to the Obligations, other than Article 15.10(b).
SECTION 3.10. Interest Recapture. If the designated interest
rate applicable to any Borrowing exceeds the Maximum Rate, the
interest rate on that the Borrowing is limited to the Maximum
Rate, but any subsequent reductions in the designated rate shall
not reduce the interest rate thereon below the Maximum Rate until
the total amount of accrued interest equals the amount of interest
that would have accrued if that designated rate had always been in
effect. If at maturity (stated or by acceleration), or at final
payment of the Note, the total interest paid or accrued is less
than the interest that would have accrued if the designated rates
had always been in effect, then, at that time and to the extent
permitted by applicable law, the Borrower shall pay an amount equal
to the difference between (a) the lesser of the amount of interest
that would have accrued if the designated rates had always been in
effect and the amount of interest that would have accrued if the
Maximum Rate had always been in effect, and (b) the amount of interest
actually paid or accrued on the Note.
ARTICLE IV
CONDITIONS OF EXTENSIONS OF CREDIT
SECTION 4.01. Conditions Precedent to Initial Extension of Credit.
The obligation of the Lender to extend credit under this Agreement is
subject to the following conditions precedent:
(a) The Lender shall have received on or before the day of
the initial extension of credit under this Agreement the following,
each dated such day, in form and substance satisfactory to the Lender:
(i) The Note payable to the order of the Lender in an
amount equal to the maximum Advance Commitment;
(ii) Certified copies of (A) the resolutions of the Board of
Directors of the Borrower approving this Agreement, the Note and
each of the other Loan Documents; and (B) all documents evidencing
other necessary corporate action and governmental approvals, if any,
with respect to this Agreement, the Note and each of the other Loan
Documents;
(iii) A certificate of the Secretary or an Assistant Secretary
of the Borrower certifying the names and true signatures of the
officers of the Borrower authorized to sign this Agreement, the Note
and each of the other Loan Documents, and the accuracy and currency
of the Borrower's Articles of Incorporation and By-Laws attached thereto;
(iv) A favorable opinion of counsel to the Borrower, substantially
in the form of Exhibit E to the Multi-Bank Credit Agreement and as to
such other matters as the Lender may reasonably request;
(v) Payment instructions from the Borrower with respect to
its obligations under the Prior Agreement and evidence that the
Borrower has cancelled the financing commitments under the Prior
Agreement; and
(vi) Such other documents, instruments and agreements in
furtherance of the financing transaction contemplated in the Loan
Documents, each in form and substance satisfactory to the Lender
and its counsel, including, without limitation, the documents,
instruments and agreements described on the List of Closing
Documents attached to the Multi-Bank Credit Agreement as Exhibit F.
(b) No law or regulation affecting the Lender's entering into the
financing transaction contemplated by the Loan Documents shall impose upon
the Lender any material obligation, fee, liability, cost, expense or damages.
SECTION 4.02. Conditions Precedent to Each Extension of Credit,
Conversion or Continuation. The obligation of the Lender to make
an Advance, or to convert or continue any Advance as described in
Section 3.03 on the occasion of each such extension of credit
(including the initial extension of credit hereunder), conversion
or continuation shall be subject to the further conditions precedent
that on the date of such extension of credit, conversion or continuation:
(a) The following statements shall be true (and each of the
giving of the applicable Notice of Borrowing or Notice of Continuation
or Conversion, as applicable, and the acceptance by the Borrower of the
proceeds or other benefits of the requested extension of credit, conversion
or continuation shall constitute a representation and warranty by the
Borrower that on the date of such extension of credit, conversion or
continuation such statements are true):
(i) The representations and warranties contained in Section
6.01 of the Multi-Bank Credit Agreement are correct on and as of
the date of such extension of credit, conversion or continuation
before and immediately after giving effect to such extension of
credit, conversion or continuation and to the application of the
proceeds or other benefits thereof, as though made on and as of
such date; and
(ii) No event has occurred and is continuing, or would
result from such extension of credit, conversion or continuation
or from the application of the proceeds or other benefits
thereof, that constitutes a Default or an Event of Default.
(b) The Lender shall have received such other approvals, opinions
or documents as the Lender may reasonably request.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
SECTION 5.01. Representations and Warranties of the Borrower.
The Borrower represents and warrants to the Lender that the
representations and warranties contained in Section 6.01 of the
Multi-Bank Credit Agreement (each of which is hereby incorporated
by reference as if set forth herein verbatim, except that references
therein to "the Agent" or "the Lenders" shall be deemed to be references
to the Lender under this Agreement) are true, correct and complete as of
the date of this Agreement and as of the date of each reaffirmation thereof
made pursuant to Section 4.02(a)(i).
ARTICLE VI
COVENANTS OF THE BORROWER
SECTION 6.01. Affirmative Covenants. The Borrower covenants to
the Lender that, so long as any Obligation shall remain unpaid or
the Lender shall have any commitment hereunder, the Borrower will,
unless the Lender shall otherwise consent in writing, do and perform
all acts necessary to comply with each of the affirmative covenants
set forth in Section 7.01 of the Multi-Bank Credit Agreement (each of
which is hereby incorporated by reference as if set forth herein verbatim,
except that references therein to "the Agent" or "the Lenders" shall
be deemed to be references to the Lender under this Agreement).
SECTION 6.02. Negative Covenants. The Borrower covenants to the
Lender that, so long as any Obligation shall remain unpaid or the
Lender shall have any commitment hereunder, the Borrower will
not, unless the Lender shall otherwise consent in writing, do or
perform any acts in violation of the negative covenants set forth
in Section 7.02 of the Multi-Bank Credit Agreement (each of which
is hereby incorporated herein by reference as if set forth herein
verbatim, except that references therein to "the Agent" or "the
Lenders" shall be deemed to be references to the Lender under this Agreement).
SECTION 6.03. Financial Covenants. The Borrower covenants to
the Lender that so long as any Obligation shall remain unpaid or
the Lender shall have any obligation hereunder, the Borrower
will, unless the Lender shall otherwise consent in writing, do
and perform all acts necessary to comply with each of the financial
covenants set forth in Section 7.03 of the Multi-Bank Credit Agreement
(each of which is hereby incorporated herein by reference as if set
forth herein verbatim, except that references therein to "the Agent"
or "the Lenders" shall be deemed to be references to the Lender under
this Agreement).
ARTICLE VII
EVENTS OF DEFAULT
SECTION 7.01. Events of Default. If any of the following events
("Events of Default") shall occur and be continuing:
(a) either (i) the Borrower shall fail to make any payment
of principal on the Advances when the same becomes due, or (ii)
the Borrower shall fail to make any other payment on the Obligations
when the same becomes due and such failure shall continue for five (5)
days; or
(b) any representation or warranty made by the Borrower
herein or in any other Loan Document or by the Borrower (or any
of its officers) in connection with any Loan Document shall prove
to have been incorrect or misleading in any material respect when
made; or
(c) the Borrower shall fail to perform or observe any term,
covenant or agreement contained in Section 7.02 of the Multi-Bank
Credit Agreement on its part to be performed or observed; or
(d) the Borrower shall fail to perform or observe any other
term, covenant or agreement contained in any Loan Document on its
part to be performed or observed and any such failure shall
remain unremedied for the earliest of (i) ten (10) business days
after written notice thereof shall have been given to the
Borrower by the Lender, (ii) ten (10) business days after the
date the Borrower discovers, or should have discovered, such
failure, and (iii) if such failure has existed for more that
sixty (60) days, five (5) business days after the earlier of (A)
the date of delivery by the Lender to the Borrower of written
notice thereof, and (B) the date that the Borrower discovers, or
should have discovered, such failure; or
(e) with respect to any Debt (other than Debt constituting
Obligations) of the Borrower or any subsidiary of the Borrower in
an aggregate principal amount outstanding in excess of $500,000,
the Borrower or such subsidiary shall fail to pay any principal
of or premium or interest on such Debt when the same becomes due
and payable (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise), and such failure shall
continue after the applicable grace period, if any, specified in
the agreement or instrument relating to such Debt; or any other
event shall occur or condition shall exist under any agreement or
instrument relating to any such Debt and shall continue after the
applicable grace period, if any, specified in such agreement or
instrument, if the effect of such event or condition is to cause
the holders of such Debt to accelerate, or to permit the holders
of such Debt to accelerate, the maturity of such Debt; or any
such 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; or
(f) (i) the Borrower or any of its subsidiaries shall
generally not pay its debts as such debts become due, or shall
admit in writing its inability to pay its debts generally, or
shall make a general assignment for the benefit of creditors; or
any proceeding shall be instituted by or against the Borrower or
any of its subsidiaries seeking to adjudicate it a bankrupt or
insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of it
or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an
order for relief or the appointment of a receiver, trustee, or
other similar official for it or for any substantial part of its
property; or (ii) the Borrower or any of its subsidiaries shall
take any corporate action to authorize any of the actions set
forth in clause (i) above; or
(g) any judgment or order for the payment of money in
excess of $1,000,000 above any insurance coverage therefor shall
be rendered against the Borrower or any of its subsidiaries by
any Governmental Authority or quasi-governmental authority, and
either (i) enforcement proceedings shall have been commenced by
any creditor upon such judgment or order, or (ii) there shall be
any period of thirty (30) consecutive days during which a stay of
enforcement of such judgment or order, by reason of a pending
appeal or otherwise, shall not be in effect; or
(h) any Plan shall have any Unfunded Liabilities, or any
Reportable Event shall occur in connection with any Plan; or
(i) the Borrower or any of its subsidiaries shall be the
subject of any proceeding or investigation pertaining to the
release by the Borrower, any of its subsidiaries, or any other
Person of any toxic or hazardous waste or substance into the
environment, or any violation of any federal, state or local
environmental, health or safety law or regulation, which would,
in either case, have a material adverse effect upon the
operations of the Borrower or any of its subsidiaries; or
(j) the acquisition by any Person, or two or more Persons
acting in concert (other than any Person or Persons who own,
prior to that acquisition, 20% or more of the outstanding shares
of the Borrower's voting stock), of beneficial ownership (within
the meaning of Rule 13d-3 of the Securities and Exchange
Commission under the Securities Exchange Act of 1934) of 20% or
more of the outstanding shares of the Borrower's voting stock; or
(k) the occurrence of an "Event of Default" as defined in
the Multi-Bank Credit Agreement.
then, and in any such event, the Lender may (i) declare the
Advance Commitment and the Advance Facility and the obligations
of the Lender under each of the Loan Documents, to be terminated,
whereupon the same shall forthwith terminate, and (ii) declare
the Obligations to be forthwith due and payable, whereupon such
Obligations shall become and be forthwith due and payable,
without presentment, demand, protest or further notice of any
kind, all of which are hereby expressly waived by the Borrower;
provided, however, that upon the occurrence of any Event of
Default described in Section 7.01(f)(i) above, (A) the Advance
Commitment, and the obligations of the Lender under the Advance
Facility, shall automatically be terminated, and (B) the
Obligations shall automatically become and be due and payable,
without presentment, demand, protest or any notice of any kind,
all of which are hereby expressly waived by the Borrower.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc. No amendment or waiver of any
provision of any Loan Document, nor consent to any departure by
the Borrower therefrom, shall in any event be effective unless
the same shall be in writing and signed by the Lender, and then
such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
SECTION 8.02. Notices, Etc. All notices and other
communications provided for hereunder shall be in writing
(including telegraphic, telecopy, telex or cable communication)
and mailed, telegraphed, telexed, cabled or delivered, if to the
Borrower, at its address at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇.; and if
to the Lender, at its address at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, with a copy to ▇▇▇▇▇▇ &
▇▇▇▇▇▇, L.L.P., ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇,
Attention: F. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇.; or, as to each party, at such
other address as shall be designated by such party in a written
notice to the other party. All such notices and communications
shall be effective upon receipt, or if mailed, four (4) days
after deposit in the United States mails; if telegraphed, when
delivered to the telegraph company; if telexed, when confirmed by
telex answerback; if telecopied, when verbally confirmed by
telephone; or if cabled, when delivered to the cable company,
except that notices and communications to the Lender pursuant to
Article II or III shall not be effective until received by the Lender.
SECTION 8.03. No Waiver; Remedies. No failure on the part of
the Lender to exercise, and no delay in exercising, any right
under any Loan Document shall operate as a waiver thereof; nor
shall any single or partial exercise of any such right preclude
any other or further exercise thereof or the exercise of any
other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
SECTION 8.04. Payments Set Aside. To the extent that the
Borrower makes a payment or payments to the Lender, or the Lender
exercises its right of set-off, and such payment or payments or
the proceeds of such enforcement or set-off or any part thereof
are subsequently invalidated, declared to be fraudulent or
preferential, set aside and/or required to be repaid to a
trustee, receiver or any other party under any bankruptcy law,
real estate or federal law, common law or equitable cause, then
to the extent of such recovery, the Obligation or part thereof
originally intended to be satisfied, and all such Liens, rights
and remedies therefor, shall be revived and continued in full
force and effect as if such payment had not been made or such
enforcement or set-off had not occurred.
SECTION 8.05. Costs, Expenses and Taxes.
(a) The Borrower agrees to pay on demand all "Costs and
Expenses," as hereinafter defined. "Costs and Expenses," as used
in this Agreement, shall mean (A) all costs, expenses, fees and
charges incurred by the Lender or its Affiliates (including,
without limitation, NationsBanc Capital Markets, Inc.) and all
fees for services (including disbursements) of the attorneys,
accountants, valuation experts and all professionals (and all
paraprofessionals and other staff employed by such professionals)
employed by the Lender or any such Affiliate from time to time in
any way or for any purpose arising out of, or relating to, the
Obligations of the Borrower, any of the Loan Documents or the
Lender's or such Affiliate's relationship or transactions with
the Borrower, including, without limitation, (i) the development,
preparation, negotiation, execution, delivery, syndication,
modification, review and administration of the Loan Documents,
(ii) the commencement, defense of or intervention in any court
proceeding in any way related to the Obligations of the Borrower
or the Loan Documents, or any other agreements contemplated by
the terms of this Agreement, (iii) the filing of a petition,
complaint, answer, motion or other pleadings, or the taking of
any other action in or with respect to any suit or proceeding
(bankruptcy or otherwise) relating to the Borrower or any Loan
Document, (iv) the enforcement of the Lender's right to collect
any of the Obligations, (v) all costs and expenses incurred by
the Lender or any Affiliate internally including, but not limited
to, travel, food and lodging expenses for employees, duplicating
and document processing costs, and internal auditing service
expenses, and (vi) all audit costs, appraisal costs and costs of
searches, recordings and filings, all recording and filing fees,
all Taxes and all other similar fees and disbursements; and (B)
all costs, expenses, fees and charges incurred by the Lender
(including fees and disbursements for services of attorneys and
paralegals) in connection with the matters described in clauses
(ii), (iii) and (iv) above. The Borrower also agrees to pay, and
to save harmless the Lender from any delay in paying, any
tangibles, intangibles, documentary stamp and other Taxes, if
any, which may be payable in connection with the execution and
delivery of this Agreement or any of the Loan Documents, or the
recording of any hereof or thereof, or in connection with any
modification hereof or thereof, any of which Taxes payable by the
Lender are to be part of the Costs and Expenses. All Costs and
Expenses provided for in this Section 8.05 may, at the option of
the Lender, be charged and treated as a Borrowing comprised of
Base Rate Advances made by the Lender.
(b) If any payment of principal of any Eurodollar Rate
Advance is made other than on the last day of the Interest Period
for such Advance, as a result of acceleration of the maturity of
the Note pursuant to Section 7.01 or for any other reason, or if
any Eurodollar Rate Advance is converted to a Base Rate Advance
pursuant to Section 3.04(a), the Borrower shall, upon demand by
the Lender, pay to the Lender any amounts required to compensate
the Lender for any additional losses, costs or expenses which the
Lender may reasonably incur as a result of such payment including,
without limitation, any loss (including loss of anticipated profits),
cost or expense incurred by reason of the liquidation or reemployment
of deposits or other funds acquired by the Lender to fund or maintain
such Advance.
SECTION 8.06. Right of Set-Off. The Lender and each Affiliate
of the Lender is hereby authorized at any time and from time to
time, to the fullest extent permitted by law, to set off and
apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at
any time owing by the Lender or such Affiliate to or for the
credit or the account of the Borrower against any and all of the
Obligations, irrespective of whether or not any demand shall have
been made under any Loan Document and although such Obligations
may be contingent and unmatured. The Lender agrees to promptly
notify the Borrower of such set-off and application; provided,
however, that the Lender's failure to notify the Borrower as set
forth in this sentence shall not affect the validity of such
set-off and application. The rights of the Lender under this
Section 8.06 are in addition to other rights and remedies
(including, without limitation, other rights of set-off) which
the Lender may have.
SECTION 8.07. Indemnification.
(a) The Borrower hereby indemnifies and holds the Lender
and its Affiliates, their respective attorneys and agents
(individually and collectively referred to for purposes of this
Section 8.07 as the "Indemnified Parties") harmless from and
against any and all claims (including, without limitation, causes
of action, cross-claims, counterclaims, rights of set-off and
recoupment), whether by any Affiliate or shareholder of the
Borrower, or by any creditor of the Borrower, or any Affiliate
thereof, which are at any time asserted against the Indemnified
Parties (together with all Costs and Expenses relating to the
defense of such claims) arising out of, or relating to, the
Indemnified Parties' relationship or transactions with the
Borrower or any of its Affiliates, including, without limitation,
(i) any claim for funds received by the Lender and applied to the
Obligations; (ii) any claims contesting the validity or priority
of the Liens granted to the Lender pursuant to the terms and
provisions of any of the Loan Documents; and (iii) any claims for
actions taken or not taken by any of the Indemnified Parties in
connection with, or otherwise resulting from, whether directly or
indirectly, the negotiation, structuring, funding, issuance or
administration of the Advances, and all other extensions of
credit by the Lender to or on behalf of the Borrower; provided,
however, that the Lender hereby agrees to refund to the Borrower
any amounts paid to the Lender by the Borrower pursuant to the
foregoing indemnity to the extent that a court of competent
jurisdiction has found, pursuant to a "Final Order," as hereinafter
defined, that the liability asserted against the Indemnified Parties
for which such indemnity payment was made resulted primarily from
the Indemnified Parties' own willful misconduct or knowing and
intentional violation (individually and not as a co-conspirator with
the Borrower or any of its Affiliates) of any applicable law, rule or
statute, which violation is punishable as a criminal offense. As used
herein, a "Final Order" shall mean an order entered by a court of
competent jurisdiction which is not interlocutory and as to which
(i) the time to appeal or petition for a writ of certiorari has expired
with no appeals or petitions for a writ of certiorari from such
order having been taken, or (ii) all appeals and petitions for
writs of certiorari prosecuted from such order have been exhausted.
An used herein, "knowing and intentional" violation of a law, rule
or statute shall be interpreted to mean that an Indemnified Party
had knowledge both of the applicable law, rule or statute which it
violated and that its act was a violation of such law, rule or statute.
(b) The Borrower hereby agrees to reimburse the Indemnified
Parties for all Costs and Expenses incurred by the Indemnified
Parties at any time from and after the date of this Agreement
relating in any way to any and all claims which fall within the
scope of the Borrower's indemnity obligations pursuant to Section
8.07(a). All such Costs and Expenses shall be payable by the
Borrower upon demand. At the Lender's option, the Lender may
reimburse itself for any such Costs and Expenses, and the amount
of any such reimbursement shall constitute additional Obligations
of the Borrower under this Agreement.
SECTION 8.08. Change in Accounting Principles. If any changes
in accounting principles from those used in the preparation of
the financial statements referred to in Section 6.01(e) of the
Multi-Bank Credit Agreement are hereafter required or permitted
by GAAP, and are adopted by the Borrower with the agreement of
its independent certified public accountants, and such changes
result in a change in the method of calculation or the
interpretation of any of the financial covenants, standards or
terms found in Article VII of the Multi-Bank Credit Agreement or
any other provision of this Agreement, the Borrower agrees to
amend any such affected terms and provisions to reflect such
changes in GAAP with the result that the criteria for evaluating
the financial condition of the Borrower and its consolidated
subsidiaries shall be the same after such changes in GAAP as if
such changes had not been made.
SECTION 8.09. The Lender's Performance of Defaulted Acts.
The Lender may, but need not, following five (5) days prior notice
to the Borrower and so long as the Borrower shall have failed to
have made such payment or perform such act in a manner
satisfactory to the Lender, make any payment or perform any act
herein required of the Borrower in any form and manner deemed
expedient by the Lender. All monies paid for any of the purposes
herein authorized and all expenses paid or incurred in connection
therein, including reasonable attorney's fees shall constitute
Obligations and bear interest at the rate provided herein for
Base Rate Advances.
SECTION 8.10. Binding Effect; Assignments; Participations.
This Agreement shall become effective when it shall have been executed
by the Borrower and the Lender and thereafter shall be binding
upon and inure to the benefit of the Borrower, the Lender and
their respective successors and assigns, except that the Borrower
shall not have the right to assign its rights hereunder or any
interest herein without the prior written consent of the Lender.
The Lender may assign (with the consent of the Borrower) to one
or more banks or other entities all or any part or portion of, or
may grant participations to one or more banks or other entities
in all or any part or portion of its rights and obligations
hereunder (including, without limitation, the Advance Commitment,
the Note, or the Advances). Without limiting the foregoing, each
assignee and each purchaser of an assignment or participation
shall, to the fullest extent permitted by law, have the same
rights and benefits hereunder with respect to the rights and
benefits so assigned or participated as it would have if it were
the Lender hereunder.
SECTION 8.11. CHOICE OF LAW. THE LOAN DOCUMENTS SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF TEXAS. ANY DISPUTE BETWEEN THE BORROWER OR THE LENDER
ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH ANY OF
THE LOAN DOCUMENTS AND WHETHER ARISING IN CONTRACT, TORT, EQUITY,
OR OTHERWISE, SHALL BE RESOLVED IN ACCORDANCE WITH THE INTERNAL
LAWS AND DECISIONS AND NOT THE CONFLICTS OF LAW PROVISIONS OF THE
STATE OF TEXAS.
SECTION 8.12. CONSENT TO JURISDICTION.
(a) EXCEPT AS PROVIDED IN SECTION 8.12(b), THE BORROWER AND
THE LENDER AGREE THAT ALL DISPUTES BETWEEN THEM ARISING OUT OF,
CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP
ESTABLISHED BETWEEN THEM IN CONNECTION WITH ANY OF THE LOAN
DOCUMENTS OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED
OR DELIVERED IN CONNECTION THEREWITH OR THE TRANSACTIONS RELATED
THERETO AND WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR
OTHERWISE, SHALL BE RESOLVED ONLY BY STATE OR FEDERAL COURTS
LOCATED IN DALLAS COUNTY, TEXAS, BUT THE BORROWER AND THE LENDER
ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE
HEARD BY A COURT LOCATED OUTSIDE OF DALLAS COUNTY, TEXAS. THE
BORROWER WAIVES IN ALL DISPUTES ANY OBJECTION THAT IT MAY HAVE TO
THE LOCATION OF THE COURT CONSIDERING THE DISPUTE.
(b) THE BORROWER AGREES THAT THE LENDER SHALL HAVE THE
RIGHT TO PROCEED AGAINST THE BORROWER OR ITS PROPERTY IN A COURT
IN ANY LOCATION TO ENABLE SUCH PERSON TO ENFORCE A JUDGMENT OR
OTHER COURT ORDER ENTERED IN FAVOR OF SUCH PERSON. THE BORROWER
AGREES THAT IT WILL NOT ASSERT ANY PERMISSIVE COUNTERCLAIMS IN
ANY PROCEEDING BROUGHT BY THE LENDER TO REALIZE ON THE BORROWER'S
PROPERTY, THE BORROWER OR TO ENFORCE A JUDGMENT OR OTHER COURT
ORDER IN FAVOR OF SUCH PERSON. THE BORROWER WAIVES ANY OBJECTION
THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN WHICH THE LENDER
HAS COMMENCED A PROCEEDING DESCRIBED IN THIS PARAGRAPH.
SECTION 8.13. WAIVER OF JURY TRIAL. THE BORROWER AND THE LENDER
EACH WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY
DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE,
BETWEEN OR AMONG THE BORROWER OR THE LENDER ARISING OUT OF,
CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE RELATIONSHIP
ESTABLISHED BETWEEN THEM IN CONNECTION WITH ANY OF THE LOAN
DOCUMENTS OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED
OR DELIVERED IN CONNECTION THEREWITH OR THE TRANSACTIONS RELATED
THERETO. THE BORROWER AND THE LENDER HEREBY AGREE AND CONSENT
THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE
DECIDED BY COURT TRIAL WITHOUT JURY.
SECTION 8.14. Term. This Agreement shall remain in full force
and effect until the later to occur of (i) the Termination Date,
and (ii) the repayment in full of all the Obligations hereunder.
SECTION 8.15. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by the parties hereto
in separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall
constitute one and the same agreement.
SECTION 8.16. Lender's Creation of Security Interest.
Notwithstanding any other provision set forth in this Agreement,
the Lender may at any time create a security interest in all or
any portion of its rights under this Agreement (including,
without limitation, Obligations owing to it and the Note held by
it) in favor of any Federal Reserve bank in accordance with
Regulation A of the Federal Reserve Board.
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.
VICORP RESTAURANTS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------
Title: Treasurer
---------
NATIONSBANK OF TEXAS, N.A.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------
Senior Vice President
Domestic Lending Office:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Eurodollar Lending Office:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇