AMENDED AND RESTATED CREDIT AGREEMENT
dated as of January 8, 2004
by and among
JACK IN THE BOX INC.,
as Borrower,
the Lenders referred to herein,
as Lenders,
FLEET NATIONAL BANK,
as Syndication Agent,
US BANK, NATIONAL ASSOCIATION,
as Syndication Agent,
COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A.,
"RABOBANK INTERNATIONAL," NEW YORK BRANCH,
as Documentation Agent,
BNP PARIBAS,
as Documentation Agent
and
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Administrative Agent
FLEET NATIONAL BANK, as Co-Lead Arranger
WACHOVIA SECURITIES, INC.
as Co-Lead Arranger and Sole Book Manager
1
TABLE OF CONTENTS
ARTICLE I DEFINITIONS.................................................................. 6
-----------
SECTION 1.1 Definitions............................................................. 6
SECTION 1.2 General................................................................. 19
SECTION 1.3 Other Definitions and Provisions........................................ 20
ARTICLE II REVOLVING CREDIT FACILITY.................................................... 20
-------------------------
SECTION 2.1 Revolving Credit Loans.................................................. 20
SECTION 2.2 Swingline Loans......................................................... 20
SECTION 2.3 Procedure for Advances of Revolving Credit and Swingline Loans.......... 21
SECTION 2.4 Repayment of Loans...................................................... 22
SECTION 2.5 Notes................................................................... 23
SECTION 2.6 Permanent Reduction of the Revolving Credit Commitment.................. 23
SECTION 2.7 Termination of Revolving Credit Facility................................ 24
ARTICLE III LETTER OF CREDIT FACILITY.................................................... 24
-------------------------
SECTION 3.1 L/C Commitment.......................................................... 24
SECTION 3.2 Procedure for Issuance of Letters of Credit............................. 24
SECTION 3.3 Commissions and Other Charges........................................... 25
SECTION 3.4 L/C Participations...................................................... 25
SECTION 3.5 Reimbursement Obligation of the Borrower................................ 26
SECTION 3.6 Obligations Absolute.................................................... 26
SECTION 3.7 Effect of Application................................................... 27
ARTICLE IV TERM LOAN FACILITY........................................................... 27
------------------
SECTION 4.1 Term Loan............................................................... 27
SECTION 4.2 Procedure for Advance of Term Loan...................................... 27
SECTION 4.3 Repayment of Term Loan.................................................. 28
SECTION 4.4 Prepayments of Term Loan................................................ 29
SECTION 4.5 Term Notes.............................................................. 30
ARTICLE V GENERAL LOAN PROVISIONS...................................................... 31
-----------------------
SECTION 5.1 Interest................................................................ 31
SECTION 5.2 Notice and Manner of Conversion or Continuation of Loans................ 33
SECTION 5.3 Fees.................................................................... 34
SECTION 5.4 Manner of Payment....................................................... 35
SECTION 5.5 Crediting of Payments and Proceeds...................................... 35
SECTION 5.6 Adjustments............................................................. 35
SECTION 5.7 Nature of Obligations of Lenders Regarding Extensions of Credit;
Assumption by the Administrative Agent................................ 36
SECTION 5.8 Changed Circumstances................................................... 37
SECTION 5.9 Indemnity............................................................... 38
SECTION 5.10 Capital Requirements.................................................... 38
SECTION 5.11 Taxes................................................................... 39
SECTION 5.12 Replacement of Lenders.................................................. 40
SECTION 5.13 Matters Applicable to all Requests for Compensation..................... 41
SECTION 5.14 Security................................................................ 41
ARTICLE VI CLOSING; CONDITIONS OF CLOSING AND BORROWING................................. 41
--------------------------------------------
SECTION 6.1 Closing................................................................. 41
SECTION 6.2 Conditions to Closing and Initial Extensions of Credit.................. 41
SECTION 6.3 Conditions to All Extensions of Credit.................................. 44
2
ARTICLE VII REPRESENTATIONS AND WARRANTIES OF THE BORROWER............................... 45
----------------------------------------------
SECTION 7.1 Representations and Warranties.......................................... 45
SECTION 7.2 Survival of Representations and Warranties, Etc......................... 51
ARTICLE VIII FINANCIAL INFORMATION AND NOTICES............................................ 51
---------------------------------
SECTION 8.1 Financial Statements and Projections.................................... 51
SECTION 8.2 Officer's Compliance Certificate........................................ 52
SECTION 8.3 Annual Accountants' Certificate......................................... 52
SECTION 8.4 Other Reports........................................................... 52
SECTION 8.5 Notice of Litigation and Other Matters.................................. 52
SECTION 8.6 Extension of Time....................................................... 53
SECTION 8.7 Accuracy of Information................................................. 53
ARTICLE IX AFFIRMATIVE COVENANTS........................................................ 53
---------------------
SECTION 9.1 Preservation of Corporate Existence and Related Matters................. 53
SECTION 9.2 Maintenance of Property................................................. 53
SECTION 9.3 Insurance............................................................... 54
SECTION 9.4 Accounting Methods and Financial Records................................ 54
SECTION 9.5 Compliance With Laws and Approvals...................................... 54
SECTION 9.6 Environmental Laws...................................................... 54
SECTION 9.7 Compliance with ERISA................................................... 55
SECTION 9.8 Visits and Inspections.................................................. 56
SECTION 9.9 Additional Subsidiaries................................................. 57
SECTION 9.10 Use of Proceeds......................................................... 57
SECTION 9.11 Real Property Collateral................................................ 57
SECTION 9.12 Further Assurances...................................................... 57
ARTICLE X FINANCIAL COVENANTS.......................................................... 57
-------------------
SECTION 10.1 Maximum Leverage Ratio.................................................. 57
SECTION 10.2 Minimum Fixed Charge Coverage Ratio..................................... 57
SECTION 10.3 Maximum Adjusted Debt to EBITDAR........................................ 58
SECTION 10.4 Minimum Tangible Net Worth.............................................. 58
SECTION 10.5 Maximum Capital Expenditures............................................ 59
ARTICLE XI NEGATIVE COVENANTS........................................................... 59
------------------
SECTION 11.1 Limitations on Debt..................................................... 59
SECTION 11.2 Limitations on Liens.................................................... 60
SECTION 11.3 Limitations on Loans, Advances, Investments and Acquisitions............ 61
SECTION 11.4 Limitations on Mergers and Liquidation.................................. 63
SECTION 11.5 Limitations on Sale of Assets........................................... 63
SECTION 11.6 Limitations on Dividends and Distributions.............................. 63
SECTION 11.7 Limitations on Exchange and Issuance of Capital Stock................... 64
SECTION 11.8 Transactions with Affiliates............................................ 64
SECTION 11.9 Certain Accounting Changes; Organizational Documents.................... 64
SECTION 11.10 Amendments; Payments and Prepayments of Subordinated Debt............... 64
SECTION 11.11 Restrictive Agreements.................................................. 64
SECTION 11.12 Nature of Business...................................................... 64
SECTION 11.13 Impairment of Security Interests........................................ 65
ARTICLE XII DEFAULT AND REMEDIES......................................................... 65
--------------------
SECTION 12.1 Events of Default....................................................... 65
SECTION 12.2 Remedies................................................................ 67
SECTION 12.3 Rights and Remedies Cumulative; Non-Waiver; etc......................... 67
3
ARTICLE XIII THE ADMINISTRATIVE AGENT..................................................... 68
------------------------
SECTION 13.1 Appointment............................................................. 68
SECTION 13.2 Delegation of Duties.................................................... 68
SECTION 13.3 Exculpatory Provisions.................................................. 68
SECTION 13.4 Reliance by the Administrative Agent.................................... 68
SECTION 13.5 Notice of Default....................................................... 69
SECTION 13.6 Non-Reliance on the Administrative Agent and Other Lenders.............. 69
SECTION 13.7 Indemnification......................................................... 70
SECTION 13.8 The Administrative Agent in Its Individual Capacity..................... 70
SECTION 13.9 Resignation of the Administrative Agent; Successor Administrative Agent. 70
SECTION 13.10 Documentation Agent and Syndication Agent............................... 70
ARTICLE XIV MISCELLANEOUS................................................................ 71
-------------
SECTION 14.1 Notices................................................................. 71
SECTION 14.2 Expenses; Indemnity..................................................... 72
SECTION 14.3 Set-off................................................................. 72
SECTION 14.4 Governing Law........................................................... 72
SECTION 14.5 Jurisdiction and Venue.................................................. 73
SECTION 14.6 Waiver of Jury Trial.................................................... 73
SECTION 14.7 Reversal of Payments.................................................... 73
SECTION 14.8 Injunctive Relief; Punitive Damages..................................... 73
SECTION 14.9 Accounting Matters...................................................... 74
SECTION 14.10 Successors and Assigns; Participations.................................. 74
SECTION 14.11 Amendments, Waivers and Consents........................................ 77
SECTION 14.12 Performance of Duties................................................... 78
SECTION 14.13 All Powers Coupled with Interest........................................ 78
SECTION 14.14 Survival of Indemnities................................................. 78
SECTION 14.15 Titles and Captions..................................................... 78
SECTION 14.16 Severability of Provisions.............................................. 78
SECTION 14.17 Counterparts............................................................ 78
SECTION 14.18 Term of Agreement....................................................... 78
SECTION 14.19 Advice of Counsel....................................................... 79
SECTION 14.20 No Strict Construction.................................................. 79
SECTION 14.21 Inconsistencies with Other Documents; Independent Effect of Covenants... 79
4
EXHIBITS AND SCHEDULES
=======================
EXHIBITS
Exhibit A-1 Form of Revolving Credit Note
Exhibit A-2 Form of Swingline Note
Exhibit A-3 Form of Term Note
Exhibit B Form of Notice of Borrowing
Exhibit C Form of Notice of Account Designation
Exhibit D Form of Notice of Prepayment
Exhibit E Form of Notice of Conversion/Continuation
Exhibit F Form of Officer's Compliance Certificate
Exhibit G Form of Assignment and Acceptance
Exhibit H Form of Guaranty Agreement
Exhibit I Form of Collateral Agreement
Exhibit J Form of Joinder Agreement
SCHEDULES
Schedule 1.1(b) Unrestricted Subsidiaries
Schedule 1.1(c) Restaurant Units Held for Resale
Schedule 7.1(a) Jurisdictions of Organization and Qualification
Schedule 7.1(b) Subsidiaries and Capitalization
Schedule 7.1(i) ERISA Plans
Schedule 7.1(l) Material Contracts
Schedule 7.1(t) Debt and Guaranty Obligations
Schedule 7.1(u) Litigation
Schedule 9.11 List of Excluded Properties
Schedule 11.1(b) Existing Hedging Agreements
Schedule 11.1(c) Permitted Debt
Schedule 11.2 Existing Liens
Schedule 11.3 Existing Loans, Advances and Investments
5
AMENDED AND RESTATED CREDIT AGREEMENT, dated as of the 8th day of January,
2004, by and among JACK IN THE BOX INC., a Delaware corporation, as Borrower
(the "Borrower"), the lenders who are or may become a party to this Agreement,
as Lenders (the "Lenders"), FLEET NATIONAL BANK, as Syndication Agent, US BANK,
NATIONAL ASSOCIATION, as Syndication Agent, COOPERATIEVE CENTRALE
RAIFFEISEN-BOERENLEENBANK B.A., "RABOBANK INTERNATIONAL," NEW YORK BRANCH, as
Documentation Agent, BNP PARIBAS, as Documentation Agent, and WACHOVIA BANK,
NATIONAL ASSOCIATION, a national banking association, as Administrative Agent
for the Lenders (the "Administrative Agent").
STATEMENT OF PURPOSE
Pursuant to the Credit Agreement dated as of January 22, 2003 (as amended,
restated, supplemented or otherwise modified prior to the date hereof, the
"Existing Credit Agreement") among the Borrower, the Administrative Agent and
the lenders party thereto, such lenders extended certain credit facilities to
the Borrower.
The Borrower has requested, and, subject to the terms and conditions
hereof, the Administrative Agent, the Syndication Agents, the Documentation
Agents and the Lenders have agreed to amend and restate the Existing Credit
Agreement to provide for, among other matters, (i) the refinancing of the Term
Loans made under the Term Loan Facility, (ii) the amendment of certain other
provisions with respect to the Term Loan Facility, (iii) the amendment of
certain provisions with respect to the Revolving Credit Facility and (iv)
certain other amendments provided for herein, in each case subject to the terms
and conditions set forth herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, such parties
hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions.
------------
The following terms when used in this Agreement
shall have the meanings assigned to them below:
"Adjusted Debt" means, as of any date of calculation, the sum of the
following determined on a Consolidated basis, without duplication, for the
Borrower and its Restricted Subsidiaries in accordance with GAAP: (a) Funded
Debt as of such date, plus (b) the product of (i) Rental Expense for the four
(4) consecutive fiscal quarters ending on or immediately prior to such date,
multiplied by (ii) 8.0.
"Administrative Agent" means Wachovia in its capacity as Administrative
Agent hereunder, and any successor thereto appointed pursuant to Section 13.9.
"Administrative Agent's Office" means the office of the Administrative
Agent specified in or determined in accordance with the provisions of Section
14.1(c).
"Affiliate" means, with respect to any Person, any other Person (other than
a Subsidiary of the Borrower) which directly or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
such first Person or any of its Subsidiaries. The term "control" means (a) the
power to vote five percent (5%) or more of the securities or other equity
interests of a Person having ordinary voting power, or (b) the possession,
directly or indirectly, of any other power to direct or cause the direction of
the management and policies of a Person, whether through ownership of voting
securities, by contract or otherwise.
6
"Aggregate Commitment" means the aggregate amount of the Lenders'
Commitments hereunder, as such amount may be reduced or otherwise modified at
any time or from time to time pursuant to the terms hereof. On the Closing Date,
the Aggregate Commitment shall be Four Hundred Seventy Five Million Dollars
($475,000,000).
"Agreement" means the Existing Credit Agreement, as amended and restated by
this Amended and Restated Credit Agreement, and as further amended, restated,
supplemented or otherwise modified from time to time.
"Applicable Law" means all applicable provisions of constitutions, laws,
statutes, ordinances, rules, treaties, regulations, permits, licenses,
approvals, interpretations and orders of courts or Governmental Authorities and
all orders and decrees of all courts and arbitrators.
"Applicable Margin" has the meaning assigned thereto in Section 5.1(c).
"Application" means an application, in the form specified by the Issuing
Lender from time to time, requesting the Issuing Lender to issue a Letter of
Credit.
"Approved Fund" means any Person (other than a natural Person), including,
without limitation, any special purpose entity, that is (or will be) engaged in
making, purchasing, holding or otherwise investing in commercial loans and
similar extensions of credit in the ordinary course of its business; provided,
that such Approved Fund must be administered by (a) a Lender, (b) an Affiliate
of a Lender or (c) an entity or an Affiliate of an entity that administers or
manages a Lender.
"Assignment and Acceptance" has the meaning assigned thereto in Section
14.10.
"Base Rate" means, at any time, the higher of (a) the Prime Rate and (b)
the Federal Funds Rate plus 1/2 of 1%; each change in the Base Rate shall take
effect simultaneously with the corresponding change or changes in the Prime Rate
or the Federal Funds Rate.
"Base Rate Loan" means any Loan bearing interest at a rate based upon the
Base Rate as provided in Section 5.1(a).
"Benefited Lender" has the meaning assigned thereto in Section 5.6.
"Blocked Term Loan Proceeds" has the meaning set forth in Section
6.2(f)(iv).
"Borrower" means Jack in the Box Inc., a Delaware corporation, in its
capacity as borrower hereunder.
"Business Day" means (a) for all purposes other than as set forth in clause
(b) below, any day other than a Saturday, Sunday or legal holiday on which banks
in Charlotte, North Carolina and New York, New York, are open for the conduct of
their commercial banking business, and (b) with respect to all notices and
determinations in connection with, and payments of principal and interest on,
any LIBOR Rate Loan, any day that is a Business Day described in clause (a) and
that is also a day for trading by and between banks in Dollar deposits in the
London interbank market.
"Calculation Date" has the meaning assigned thereto in Section 5.1(c).
"Capital Asset" means, with respect to the Borrower and its Subsidiaries,
any asset that should, in accordance with GAAP, be classified and accounted for
as a capital asset on a Consolidated balance sheet of the Borrower and its
Subsidiaries.
7
"Capital Expenditures" means with respect to the Borrower and its
Restricted Subsidiaries for any period, the aggregate cost of all Capital Assets
acquired by the Borrower and its Restricted Subsidiaries during such period, as
determined in accordance with GAAP.
"Capital Lease" means any lease of any property by the Borrower or any of
its Restricted Subsidiaries, as lessee, that should, in accordance with GAAP, be
classified and accounted for as a capital lease on a Consolidated balance sheet
of the Borrower and its Subsidiaries.
"Change in Control" has the meaning assigned thereto in Section 12.1(g).
"Closing Date" means the date of this Agreement or such later Business Day
upon which each condition described in Section 6.2 shall be satisfied or waived
in all respects in a manner acceptable to the Administrative Agent, in its sole
discretion.
"Code" means the Internal Revenue Code of 1986, and the rules and
regulations thereunder, each as amended or modified from time to time.
"Collateral" means the collateral security for the Obligations pledged or
granted pursuant to the Security Documents.
"Collateral Agreement" means the Collateral Agreement dated as of January
22, 2003, entered into by the Borrower and each of its Restricted Subsidiaries
that is a Domestic Subsidiary in favor of the Administrative Agent for the
ratable benefit of itself and the Lenders, substantially in the form of Exhibit
I, as amended, restated, supplemented or otherwise modified prior to the date
hereof, as reaffirmed and amended pursuant to the Reaffirmation Agreement and as
otherwise amended, restated, supplemented or modified from time to time
hereafter.
"Commitment" means, as to any Lender, the sum of such Lender's Revolving
Credit Commitment and Term Loan Commitment, as applicable, as set forth in the
Register, as such Commitment may be reduced or otherwise modified at any time or
from time to time pursuant to the terms hereof.
"Commitment Fee Rate" has the meaning assigned thereto in Section 5.3(a).
"Commitment Percentage" means, as to any Lender at any time, the ratio of
(a) the amount of the Commitment of such Lender to (b) the Aggregate Commitment
of all the Lenders.
"Consolidated" means, when used with reference to financial statements or
financial statement items of the Borrower and its Subsidiaries, such statements
or items on a consolidated basis in accordance with applicable principles of
consolidation under GAAP.
"Credit Facility" means, collectively, the Revolving Credit Facility, the
Swingline Facility, the L/C Facility and the Term Loan Facility.
"Debt" means, with respect to the Borrower and its Subsidiaries at any date
and without duplication, the sum of the following calculated in accordance with
GAAP: (a) all liabilities, obligations and indebtedness for borrowed money
including, but not limited to, obligations evidenced by bonds, debentures, notes
or other similar instruments of any such Person, (b) all obligations to pay the
deferred purchase price of property or services of any such Person (including,
without limitation, all obligations under non-competition agreements), except
trade payables arising in the ordinary course of business not more than ninety
(90) days past due (unless being disputed in good faith), (c) all obligations of
any such Person as lessee under Capital Leases, (d) all Debt of any other Person
secured by a Lien on any asset of the Borrower and its Restricted Subsidiaries,
(e) all Guaranty Obligations of any such Person, (f) all obligations, contingent
or otherwise, of any such Person relative to the face amount of letters of
credit, whether or not drawn, including, without limitation, any Reimbursement
Obligation, and banker's acceptances issued for the account of any such Person,
(g) all obligations of any such Person to redeem, repurchase, exchange, decease
or otherwise make payments in respect of capital stock or other securities or
partnership interests of such Person, (h) all net payment obligations incurred
by any such Person pursuant to Hedging Agreements, (i) all outstanding payment
obligations with respect to Synthetic Leases and (j) the outstanding attributed
principal amount under any asset securitization program.
8
"Default" means any of the events specified in Section 12.1 which with the
passage of time, the giving of notice or any other condition, would constitute
an Event of Default.
"Documentation Agent" means each of Cooperatieve Centrale
Raiffeisen-Boerenleenbank B.A., "Rabobank International," New York Branch and
BNP Paribas in its capacity hereunder as documentation agent.
"Dollars" or "$" means, unless otherwise qualified, dollars in lawful
currency of the United States.
"Domestic Subsidiary" means any Subsidiary organized under the laws of any
political subdivision of the United States.
"EBITDA" means, for any period, the sum of the following determined on a
Consolidated basis, without duplication, for the Borrower and its Restricted
Subsidiaries in accordance with GAAP: (a) Net Income for such period plus (b)
the sum of the following to the extent deducted in determining Net Income: (i)
income and franchise taxes, (ii) Interest Expense, (iii) amortization,
depreciation and other non-cash charges (including, without limitation, the
financing fees to be written off by the Borrower in connection with the
refinancing of the Existing Term Loans contemplated hereby), (iv) non-cash
charges related to the Borrower's brand re-invention strategy not to exceed (x)
$50,000,000 in any Fiscal Year and (y) $100,000,000 in the aggregate during the
term of this Agreement; (v) any other non-cash nonrecurring or extraordinary
losses approved by the Administrative Agent in its reasonable discretion; and
(vi) the call premium incurred by the Borrower in connection with the prepayment
of the Senior Subordinated Notes; less (c) interest income and any nonrecurring
or extraordinary gains.
"EBITDAR" means, for any period, the sum of the following determined on a
Consolidated basis, without duplication, for the Borrower and its Restricted
Subsidiaries in accordance with GAAP: (a) EBITDA for such period, plus (b)
Rental Expense for such period.
"Eligible Assignee" means, with respect to any assignment of the rights,
interest and obligations of a Lender hereunder, a Person that is at the time of
such assignment (a) a commercial bank organized under the laws of the United
States or any state thereof, having combined capital and surplus in excess of
$500,000,000, (b) a commercial bank organized under the laws of any other
country that is a member of the Organization of Economic Cooperation and
Development, or a political subdivision of any such country, having combined
capital and surplus in excess of $500,000,000, (c) a finance company, insurance
company or other financial institution which in the ordinary course of business
extends credit of the type extended hereunder and that has total assets in
excess of $1,000,000,000, (d) already a Lender hereunder (whether as an original
party to this Agreement or as the assignee of another Lender), (e) the successor
(whether by transfer of assets, merger or otherwise) to all or substantially all
of the commercial lending business of the assigning Lender, (f) any Affiliate of
assigning Lender or (g) any Approved Fund or (h) any other Person that has been
approved in writing as an Eligible Assignee by the Borrower (other than upon the
occurrence and during the continuance of any Default or Event of Default) and
the Administrative Agent.
"Employee Benefit Plan" means any employee benefit plan within the meaning
of Section 3(3) of ERISA which (a) is maintained for employees of the Borrower
or any ERISA Affiliate or (b) has at any time within the preceding six (6) years
been maintained for the employees of the Borrower or any current or former ERISA
Affiliate.
"Environmental Claims" means any and all administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, liens, accusations,
allegations, notices of noncompliance or violation, investigations (other than
internal reports prepared by any Person in the ordinary course of business and
not in response to any third party action or request of any kind) or proceedings
relating in any way to any actual or alleged violation of or liability under any
Environmental Law or relating to any permit issued, or any approval given, under
any such Environmental Law, including, without limitation, any and all claims by
Governmental Authorities for enforcement, cleanup, removal, response, remedial
or other actions or damages, contribution, indemnification cost recovery,
compensation or injunctive relief resulting from Hazardous Materials or arising
from alleged injury or threat of injury to human health or the environment.
"Environmental Laws" means any and all federal, foreign, state, provincial
and local laws, statutes, ordinances, rules, regulations, permits, licenses,
approvals, interpretations and orders of courts or Governmental Authorities,
relating to the protection of human health or the environment, including, but
not limited to, requirements pertaining to the manufacture, processing,
distribution, use, treatment, storage, disposal, transportation, handling,
reporting, licensing, permitting, investigation or remediation of Hazardous
Materials.
9
"ERISA" means the Employee Retirement Income Security Act of 1974, and the
rules and regulations thereunder, each as amended or modified from time to time.
"ERISA Affiliate" means any Person who together with the Borrower is
treated as a single employer within the meaning of Section 414(b), (c), (m) or
(o) of the Code or Section 4001(b) of ERISA.
"Eurodollar Reserve Percentage" means, for any day, the percentage
(expressed as a decimal and rounded upwards, if necessary, to the next higher
1/100th of 1%) which is in effect for such day as prescribed by the Federal
Reserve Board (or any successor) for determining the maximum reserve requirement
(including, without limitation, any basic, supplemental or emergency reserves)
in respect of eurocurrency liabilities or any similar category of liabilities
for a member bank of the Federal Reserve System in New York City.
"Event of Default" means any of the events specified in Section 12.1,
provided that any requirement for passage of time, giving of notice, or any
other condition, has been satisfied.
"Excess Cash Flow" means, for any period of determination commencing with
the Fiscal Year ending October 3, 2004 and thereafter, the sum of the following
determined on a Consolidated basis, without duplication, for the Borrower and
its Restricted Subsidiaries in accordance with GAAP: (a) EBITDA for such period,
minus (b) cash taxes and Interest Expense paid in cash for such period, minus
(c) all scheduled principal payments made in respect of Debt during such period
minus (d) all Capital Expenditures made during such period, minus (e)
non-scheduled principal payments with respect to the Term Loan Facility plus or
minus (f) any increases or decreases in Working Capital minus (g) the cash
portion of the purchase price for Permitted Acquisitions minus (h) any
reasonable transaction costs and expenses incurred in connection with Permitted
Acquisitions minus (i) Net Cash Proceeds from any offering of equity securities
by the Borrower or any of its Restricted Subsidiaries other than solely as a
result of offerings of equity securities made in connection with any employee
stock option, incentive plan or stock purchase plan or made in connection with
compensation or incentive plans for directors and officers, in each case,
entered into in the ordinary course of business, or the exercise of any options
or other convertible securities in connection therewith.
"Excess Proceeds" has the meaning assigned thereto in Section 2.6(b).
"Existing Credit Agreement" has the meaning assigned thereto in the
Statement of Purpose.
"Existing Letters of Credit" means the letters of credit issued by Wachovia
under the Existing Credit Agreement.
"Existing Revolving Credit Loans" means the Revolving Credit Loans
outstanding under the Existing Credit Agreement.
"Existing Swingline Loans" means the Swingline Loans outstanding under the
Existing Credit Agreement.
"Existing Term Loans" means the Term Loans outstanding under the Existing
Credit Agreement.
"Extensions of Credit" means, as to any Lender at any time, (a) an amount
equal to the sum of (i) the aggregate principal amount of all Revolving Credit
Loans made by such Lender then outstanding, (ii) such Lender's Revolving Credit
Commitment Percentage of the L/C Obligations then outstanding, (iii) such
Lender's Revolving Credit Commitment Percentage of the Swingline Loans then
outstanding and (iv) the aggregate principal amount of all Term Loans made by
such Lender then outstanding, or (b) the making of any Loan or participation in
any Letter of Credit by such Lender, as the context requires.
"FDIC" means the Federal Deposit Insurance Corporation, or any successor
thereto.
"Federal Funds Rate" means, the rate per annum (rounded upwards, if
necessary, to the next higher 1/100th of 1%) representing the daily effective
federal funds rate as quoted by the Administrative Agent and confirmed in
Federal Reserve Board Statistical Release H.15 (519) or any successor or
substitute publication selected by the Administrative Agent. If, for any reason,
such rate is not available, then "Federal Funds Rate" shall mean a daily rate
which is determined, in the opinion of the Administrative Agent, to be the rate
at which federal funds are being offered for sale in the national federal funds
market at 9:00 a.m. (Charlotte time). Rates for weekends or holidays shall be
the same as the rate for the most immediately preceding Business Day.
10
"Fiscal Year" means the fiscal year of the Borrower and its Subsidiaries
ending on the Sunday that is closest to September 30.
"Foreign Subsidiary" means any Subsidiary that is not a Domestic
Subsidiary.
"Funded Debt" means, as of any date of determination with respect to the
Borrower and its Restricted Subsidiaries on a Consolidated basis without
duplication, the sum of (a) all Debt of the Borrower and its Subsidiaries
referred to in clauses (a) and (c) of the definition of "Debt" and (b) to the
extent that the underlying guaranteed Debt would be Debt of the types referred
to in clause (a) of this definition, Debt referred to in clause (e) of the
definition of "Debt"; provided, that for purposes of calculating Funded Debt for
the Borrower's fiscal quarter ending January 18, 2004 only, Funded Debt shall
exclude an amount equal to the Blocked Term Loan Proceeds, if any, existing on
January 18, 2004.
"GAAP" means generally accepted accounting principles, as recognized by the
American Institute of Certified Public Accountants and the Financial Accounting
Standards Board, consistently applied and maintained on a consistent basis for
the Borrower and its Subsidiaries throughout the period indicated and (subject
to Section 14.9) consistent with the prior financial practice of the Borrower
and its Subsidiaries.
"Governmental Approvals" means all authorizations, consents, approvals,
licenses and exemptions of, registrations and filings with, and reports to, all
Governmental Authorities.
"Governmental Authority" means any nation, province, state or political
subdivision thereof, and any government or any Person exercising executive,
legislative, regulatory or administrative functions of or pertaining to
government, and any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.
"Guaranty Agreement" means the unconditional Guaranty Agreement dated as of
January 22, 2003 entered into by each of the Guarantors in favor of the
Administrative Agent for the ratable benefit of itself and the Lenders,
substantially in the form of Exhibit H, as amended, restated, supplemented or
otherwise modified prior to the date hereof, as reaffirmed and amended by the
Reaffirmation Agreement and as otherwise amended, restated, supplemented or
otherwise modified from time to time hereafter.
"Guarantors" means the Restricted Subsidiaries that are Domestic
Subsidiaries of the Borrower and any other Person which, after the Closing Date,
becomes a party to the Guaranty Agreement by executing and delivering a Joinder
Agreement.
"Guaranty Obligation" means, with respect to the Borrower and its
Subsidiaries, without duplication, any obligation, contingent or otherwise, of
any such Person pursuant to which such Person has directly or indirectly
guaranteed any Debt or other obligation of any other Person and, without
limiting the generality of the foregoing, any obligation, direct or indirect,
contingent or otherwise, of any such Person (a) to purchase or pay (or advance
or supply funds for the purchase or payment of) such Debt or other obligation
(whether arising by virtue of partnership arrangements, by agreement to keep
well, to purchase assets, goods, securities or services, to take-or-pay, or to
maintain financial statement condition or otherwise) or (b) entered into for the
purpose of assuring in any other manner the obligee of such Debt or other
obligation of the payment thereof or to protect such obligee against loss in
respect thereof (in whole or in part); provided, that the term Guaranty
Obligation shall not include endorsements for collection or deposit in the
ordinary course of business.
"Hazardous Materials" means any substances or materials (a) which are or
become defined as hazardous wastes, hazardous substances, pollutants,
contaminants, chemical substances or mixtures or toxic substances under any
Environmental Law, (b) which are toxic, explosive, corrosive, flammable,
infectious, radioactive, carcinogenic, mutagenic or otherwise harmful to human
health or the environment and are or become regulated by any Governmental
Authority, (c) the presence of which require investigation or remediation under
any Environmental Law or common law, (d) the discharge or emission or release of
which requires a permit or license under any Environmental Law or other
Governmental Approval, (e) which are deemed to constitute a nuisance or a
trespass which pose a health or safety hazard to Persons or neighboring
properties, (f) which consist of underground or aboveground storage tanks,
whether empty, filled or partially filled with any substance, or (g) which
contain, without limitation, asbestos, polychlorinated biphenyls, urea
formaldehyde foam insulation, petroleum hydrocarbons, petroleum derived
substances or waste, crude oil, nuclear fuel, natural gas or synthetic gas.
11
"Hedging Agreement" means any agreement with respect to any Interest Rate
Contract, forward rate agreement, forward foreign exchange agreement, currency
swap agreement, cross-currency rate swap agreement, currency option agreement or
other agreement or arrangement designed to alter the risks of any Person arising
from fluctuations in interest rates or currency values (other than any commodity
swap or other agreement or arrangement related to commodity prices), all as
amended, restated, supplemented or otherwise modified from time to time.
"Hedging Obligations" has the meaning assigned thereto in the definition of
"Obligations".
"Indenture" means the indenture dated as of April 14, 1998 among Foodmaker,
Inc., as issuer, the Subsidiary Guarantors identified therein and First Union
National Bank, as trustee.
"Innovation Center" means the Borrower's product marketing, research and
development facility to be constructed in San Diego, California.
"Insurance and Condemnation Proceeds" has the meaning assigned thereto in
Section 4.4(b)(v).
"Interest Expense" means, with respect to the Borrower and its Restricted
Subsidiaries for any period, the gross interest expense (including, without
limitation, interest expense attributable to Capital Leases), all determined for
such period on a Consolidated basis, without duplication, in accordance with
GAAP.
"Interest Period" has the meaning assigned thereto in Section 5.1(b).
"Interest Rate Contract" means any interest rate swap agreement, interest
rate cap agreement, interest rate floor agreement, interest rate collar
agreement, interest rate option or any other agreement regarding the hedging of
interest rate risk exposure executed in connection with hedging the interest
rate exposure of any Person and any confirming letter executed pursuant to such
agreement, all as amended, restated, supplemented or otherwise modified from
time to time.
"ISP98" means the International Standby Practices (1998 Revision, effective
January 1, 1999), International Chamber of Commerce Publication No. 590.
"Issuing Lender" means Wachovia.
"Joinder Agreement" means, collectively, each Joinder Agreement executed in
favor of the Administrative Agent for the ratable benefit of itself and the
Lenders, substantially in the form of Exhibit J.
"L/C Commitment" means the lesser of (a) Sixty Million Dollars
($60,000,000) and (b) the Revolving Credit Commitment.
"L/C Facility" means the letter of credit facility established pursuant to
Article III.
"L/C Obligations" means at any time, an amount equal to the sum of (a) the
aggregate undrawn and unexpired amount of the then outstanding Letters of Credit
and (b) the aggregate amount of drawings under Letters of Credit which have not
then been reimbursed pursuant to Section 3.5.
"L/C Participants" means the collective reference to all the Lenders with
Revolving Credit Commitments other than the Issuing Lender.
"L/C Supporting Documentation" has the meaning assigned thereto in Section
3.2.
"Lender" means each Person executing this Agreement as a Lender (including,
without limitation, the Issuing Lender and the Swingline Lender unless the
context otherwise requires) set forth on the signature pages hereto and each
Person that hereafter becomes a party to this Agreement as a Lender pursuant to
Section 14.10.
"Lending Office" means, with respect to any Lender, the office of such
Lender maintaining such Lender's Commitment Percentage of the Extensions of
Credit.
"Letters of Credit" means the collective reference to the standby letters
of credit issued pursuant to Section 3.1 and the Existing Letters of Credit.
"Leverage Ratio" has the meaning assigned thereto in Section 10.1.
12
"LIBOR" means the rate of interest per annum determined on the basis of the
rate for deposits in Dollars in minimum amounts of at least $5,000,000 for a
period equal to the applicable Interest Period which appears on the Dow Jones
Market Screen 3750 at approximately 11:00 a.m. (London time) two (2) Business
Days prior to the first day of the applicable Interest Period (rounded upward,
if necessary, to the nearest 1/100th of 1%). If, for any reason, such rate does
not appear on Dow Jones Market Screen 3750, then "LIBOR" shall be determined by
the Administrative Agent to be the arithmetic average of the rate per annum at
which deposits in Dollars in minimum amounts of at least $5,000,000 would be
offered by first class banks in the London interbank market to the
Administrative Agent at approximately 11:00 a.m. (London time) two (2) Business
Days prior to the first day of the applicable Interest Period for a period equal
to such Interest Period. Each calculation by the Administrative Agent of LIBOR
shall be conclusive and binding for all purposes, absent manifest error.
"LIBOR Rate" means a rate per annum (rounded upwards, if necessary, to the
next higher 1/100th of 1%) determined by the Administrative Agent pursuant to
the following formula:
LIBOR Rate = LIBOR
----------------------------------------
1.00-Eurodollar Reserve Percentage
"LIBOR Rate Loan" means any Loan bearing interest at a rate based upon the
LIBOR Rate as provided in Section 5.1(a).
"Lien" means, with respect to any asset, any mortgage, leasehold mortgage,
lien, pledge, charge, security interest, hypothecation or encumbrance of any
kind in respect of such asset. For the purposes of this Agreement, a Person
shall be deemed to own subject to a Lien any asset which it has acquired or
holds subject to the interest of a vendor or lessor under any conditional sale
agreement, Capital Lease or other title retention agreement relating to such
asset.
"Loan Documents" means, collectively, this Agreement, the Notes, the
Applications, the L/C Supporting Documentation, the Guaranty Agreement, the
Collateral Agreement, any other Security Documents, each Joinder Agreement and
each other document, instrument, certificate and agreement executed and
delivered by the Borrower or any Subsidiary thereof in connection with this
Agreement or otherwise contemplated hereby (excluding any Hedging Agreement),
all as may be amended, restated, supplemented or otherwise modified from time to
time.
"Loans" means the collective reference to the Revolving Credit Loans, the
Swingline Loans and the Term Loans.
"Material Adverse Effect" means a material adverse effect on (a) the
properties, business, prospects, operations or condition (financial or
otherwise) of the Borrower and its Subsidiaries, taken as a whole or (b) the
ability of the Borrower or any of its Subsidiaries to perform its obligations
under any Loan Document.
"Material Contract" means (a) any contract or other agreement, written or
oral, of the Borrower or any of its Subsidiaries involving monetary liability of
or to any such Person in an amount in excess of $25,000,000 per annum, or (b)
any other contract or agreement, written or oral, of the Borrower or any of its
Restricted Subsidiaries the failure by the Borrower or any of its Restricted
Subsidiaries to comply with which could reasonably be expected to have a
Material Adverse Effect.
"Mortgages" means the collective reference to each deed of trust, mortgage
or other real property security document, encumbering all real property now or
hereafter owned by the Borrower or any Restricted Subsidiary that is a Domestic
Subsidiary (except as otherwise permitted under Section 9.11), in each case, in
form and substance reasonably satisfactory to the Administrative Agent and
executed by the Borrower or any Restricted Subsidiary which is the owner thereof
in favor of the Administrative Agent, for the ratable benefit of itself and the
Lenders, as any such document may be amended, restated, supplemented or
otherwise modified from time to time.
"Mortgage Related Documents" means each of the following, in each case in
form and substance satisfactory to the Administrative Agent:
13
(a) marked-up commitments for a policy of title insurance, insuring
Lenders' first priority Liens other than for ad valorem taxes not yet due and
payable, with title insurance companies (the "Title Companies") reasonably
acceptable to the Administrative Agent on each of the properties subject to the
Mortgages, with the final title insurance policy being delivered within thirty
(30) days after the date any Mortgage shall be required to be delivered pursuant
to Section 9.11;
(b) any customary affidavits and indemnities in favor of the Title
Companies as may be required or necessary to obtain title insurance reasonably
satisfactory to the Administrative Agent;
(c) copies of all recorded documents creating exceptions to the title
policy referred to in paragraph (a) above;
(d) certification from the National Research Center, or any successor
agency thereto, as to flood hazards regarding each parcel of real property
subject to a Mortgage;
(e) copies of all surveys of each parcel of real property subject to the
Mortgages which are in the possession of the Borrower or any Restricted
Subsidiary as of the date such Mortgage shall be required to be delivered
pursuant to Section 9.11;
(f) copies of all environmental assessments, audits or reports which are
in the possession of the Borrower or any Restricted Subsidiary as of the date
such Mortgage shall be required to be delivered pursuant to Section 9.11;
(g) evidence of property and liability insurance on each parcel of real
property subject to a Mortgage in form and substance reasonably acceptable to
the Administrative Agent naming the Administrative Agent as first mortgagee; and
(h) such other certificates, documents and information as are reasonably
requested by the Lenders, including, without limitation, permanent certificates
of occupancy and evidence of zoning.
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA to which the Borrower or any ERISA Affiliate is making, or
is accruing an obligation to make, or has accrued an obligation to make
contributions within the preceding six (6) years.
"Net Cash Proceeds" means, as applicable, (a) with respect to any sale or
other disposition of assets, the gross cash proceeds received by the Borrower or
any of its Restricted Subsidiaries from such sale less the sum of (i) all income
taxes and other taxes assessed by a Governmental Authority as a result of such
sale and any other fees and expenses incurred in connection therewith and (ii)
the principal amount of, premium, if any, and interest on any Debt secured by a
Lien on the asset (or a portion thereof) sold, which Debt is required to be
repaid in connection with such sale, (b) with respect to any offering of equity
securities or issuance of Debt (including, without limitation, Subordinated
Debt), the gross cash proceeds received by the Borrower or any of its Restricted
Subsidiaries therefrom less all legal, underwriting and other fees and expenses
incurred in connection therewith and (c) with respect to any payment under an
insurance policy or in connection with a condemnation proceeding, the amount of
cash proceeds received by the Borrower or its Restricted Subsidiaries from an
insurance company or Governmental Authority, as applicable, net of all expenses
of collection; provided, however, that Net Cash Proceeds shall not include any
such cash received by or on behalf of the Borrower or its Restricted
Subsidiaries with respect to (x) any securities convertible into or exchangeable
for capital stock issued to any officer, director or employee with respect to
the Borrower or its Restricted Subsidiaries or (y) any Permitted Sale-Leaseback
Transaction with respect to the Innovation Center.
"Net Income" means, with respect to the Borrower and its Restricted
Subsidiaries, for any period of determination, the net income (or loss) for such
period, determined on a Consolidated basis in accordance with GAAP; provided
that there shall be excluded from Net Income (a) the net income (or loss) of any
Person (other than a Subsidiary which shall be subject to clause (c) below), in
which the Borrower or any of its Restricted Subsidiaries has a joint interest
with a third party, except to the extent such net income is actually paid to the
Borrower or any of its Restricted Subsidiaries by dividend or other distribution
during such period (in an amount not to exceed the Borrower's or such Restricted
14
Subsidiary's share of equity income from such Person), (b) the net income (or
loss) of any Person accrued prior to the date it becomes a Subsidiary of such
Person or is merged into or consolidated with such Person or any of its
Restricted Subsidiaries or that Person's assets are acquired by such Person or
any of its Restricted Subsidiaries except to the extent included pursuant to the
foregoing clause (a), (c) the net income (if positive) of (i) any Restricted
Subsidiary and (ii) any Unrestricted Subsidiary, to the extent such net income
is actually paid to the Borrower or any of its Restricted Subsidiaries by
dividend or other distribution during such period (in an amount not to exceed
the Borrower's or any Restricted Subsidiary's share of the net income from such
Unrestricted Subsidiary), in each case, to the extent that the declaration or
payment of dividends or similar distributions by such Subsidiary to the Borrower
or any of its Restricted Subsidiaries of such net income (i) is not at the time
permitted by operation of the terms of its charter or any agreement, instrument,
judgment, decree, order, statute rule or governmental regulation applicable to
such Subsidiary or (ii) would be subject to any taxes payable on such dividends
or distributions.
"Notes" means the collective reference to the Revolving Credit Notes, the
Swingline Note and the Term Notes, and "Note" means any of such Notes.
"Notice of Account Designation" has the meaning assigned thereto in Section
2.3(b).
"Notice of Borrowing" has the meaning assigned thereto in Section 2.3(a).
"Notice of Conversion/Continuation" has the meaning assigned thereto in
Section 5.2.
"Notice of Prepayment" has the meaning assigned thereto in Section 2.4(c).
"Obligations" means, in each case, whether now in existence or hereafter
arising: (a) the principal of and interest on (including interest accruing after
the filing of any bankruptcy or similar petition) the Loans, (b) the L/C
Obligations, (c) all existing or future payment and other obligations owing by
the Borrower under any Hedging Agreement (which such Hedging Agreement is
permitted hereunder) with any Person that is a Lender hereunder (all such
obligations with respect to any such Hedging Agreement, "Hedging Obligations")
and (d) all other fees and commissions (including attorneys' fees), charges,
indebtedness, loans, liabilities, financial accommodations, obligations,
covenants and duties owing by the Borrower or any of its Subsidiaries to the
Lenders or the Administrative Agent, in each case under or in respect of this
Agreement, any Note, any Letter of Credit or any of the other Loan Documents of
every kind, nature and description, direct or indirect, absolute or contingent,
due or to become due, contractual or tortious, liquidated or unliquidated, and
whether or not evidenced by any note.
"Officer's Compliance Certificate" has the meaning assigned thereto in
Section 8.2.
"Operating Lease" means, as to any Person as determined in accordance with
GAAP, any lease of property (whether real, personal or mixed) by such Person as
lessee which is not a Capital Lease.
"Other Taxes" has the meaning assigned thereto in Section 5.11(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
agency.
"Pension Plan" means any Employee Benefit Plan, other than a Multiemployer
Plan, which is subject to the provisions of Title IV of ERISA or Section 412 of
the Code and which (a) is maintained for the employees of the Borrower or any
ERISA Affiliates or (b) has at any time within the preceding six (6) years been
maintained for the employees of the Borrower or any of its current or former
ERISA Affiliates.
"Permitted Acquisition" has the meaning assigned thereto in Section
11.3(i).
"Permitted Acquisition Diligence Information" means with respect to any
acquisition proposed by the Borrower or any Restricted Subsidiary thereof, to
the extent applicable, all financial information, all environmental reports
(including, without limitation, any phase I and, to the extent applicable, phase
II reports), all Material Contracts, all customer lists, all supply agreements,
and all other material information, in each case, requested to be delivered to
the Administrative Agent in connection with such proposed acquisition.
15
"Permitted Acquisition Documents" means with respect to any acquisition
proposed by the Borrower or any Restricted Subsidiary thereof, the purchase
agreement, sale agreement, merger agreement or other agreement evidencing such
acquisition, including, without limitation, all legal opinions and each other
document executed, delivered, contemplated by or prepared in connection
therewith and any amendment, modification or supplement to any of the foregoing.
"Permitted Franchisee Financing Program" means the franchisee financing
program on substantially the terms disclosed to the Administrative Agent on or
prior to the Closing Date pursuant to which the Borrower will (a) invest in a
nonaffiliate which will provide financing to the Borrower's franchisees, (b)
issue guaranties of the Debt of its franchisees to such Person, (c) sell notes
payable to it by its franchisees to such Person, and (d) enter into certain
transactions ancillary thereto.
"Permitted Sale-Leaseback Transaction" means any sale and leaseback
transaction with any Person providing for the leasing by the Borrower or any of
its Restricted Subsidiaries of real or personal property of (a) existing
restaurant units owned by the Borrower or any Restricted Subsidiary on the
Closing Date and held for resale as set forth on Schedule 1.1(c), or (b) newly
created restaurant units not in existence on the Closing Date or (c) the
Innovation Center, provided that, in each case the restaurant unit or units (or
the Innovation Center) are sold by the Borrower or such Restricted Subsidiary
for fair value and cash consideration only and, provided further that, the
aggregate amount of gross proceeds for all such sales in any Fiscal Year of the
Borrower shall not exceed $115,000,000.
"Person" means an individual, corporation, limited liability company,
partnership, association, trust, business trust, joint venture, joint stock
company, pool, syndicate, sole proprietorship, unincorporated organization,
Governmental Authority or any other form of entity or group thereof.
"Prime Rate" means, at any time, the rate of interest per annum publicly
announced from time to time by Wachovia as its prime rate. Each change in the
Prime Rate shall be effective as of the opening of business on the day such
change in such prime rate occurs. The parties hereto acknowledge that the rate
announced publicly by Wachovia as its prime rate is an index or base rate and
shall not necessarily be its lowest or best rate charged to its customers or
other banks.
"Ratings Downgrade" means either (a) downgrade of the senior secured Debt
rating of the Borrower to (i) BB- or less by Standard & Poor's Ratings Services,
a division of The McGraw-Hill Companies, Inc. and (ii) Ba3 or less by Moody's
Investors Service, Inc. or (b) a downgrade of the senior secured Debt rating of
the Borrower to either (i) a rating less than BB- by Standard & Poor's Ratings
Services, a division of The Mc-Graw-Hill Companies, Inc. or (ii) a rating less
than Ba3 by Moody's Investors Service, Inc.
"Reaffirmation Agreement" means the Reaffirmation and Master Amendment, of
even date herewith, among the Borrower, its Domestic Subsidiaries that are
Restricted Subsidiaries and the Administrative Agent (for the ratable benefit of
itself and the Lenders), substantially in the form of Exhibit K, as amended,
restated, supplemented or otherwise modified from time to time.
"Register" has the meaning assigned thereto in Section 14.10(d).
"Reimbursement Obligation" means the obligation of the Borrower to
reimburse the Issuing Lender pursuant to Section 3.5 for amounts drawn under
Letters of Credit.
"Rental Expense" means, with respect to the Borrower and its Restricted
Subsidiaries for any period, all rental expenses with respect to Operating
Leases (including, without limitation, any rental expenses incurred in
connection with a sale-leaseback transaction) of the Borrower and its
Subsidiaries for such period, determined on a Consolidated basis in accordance
with GAAP.
"Replaced Lender" has the meaning assigned thereto in Section 5.12(c).
"Replacement Lender" has the meaning assigned thereto in Section 5.12(c).
"Required Lenders" means, at any date, any combination of Lenders holding
more than fifty percent (50%) of the sum of (a) the Revolving Credit Commitment
(or, if the Revolving Credit Facility has been terminated, any combination of
Lenders holding more than fifty percent (50%) of the aggregate outstanding
Extensions of Credit thereunder) and (b) the aggregate outstanding Extensions of
Credit under the Term Loan Facility.
16
"Responsible Officer" means any of the following: the chief executive
officer, chief financial officer or treasurer of the Borrower or any other
officer of the Borrower reasonably acceptable to the Administrative Agent.
"Restricted Subsidiary" means any Subsidiary of the Borrower that is not an
Unrestricted Subsidiary.
"Revolving Credit Commitment" means (a) as to any Lender, the obligation of
such Lender to make Revolving Credit Loans to and issue or participate in
Letters of Credit issued for the account of the Borrower hereunder in an
aggregate principal amount at any time outstanding not to exceed the amount set
forth opposite such Lender's name on the Register, as such amount may be reduced
or modified at any time or from time to time pursuant to the terms hereof, and
(b) as to all Lenders, the aggregate commitment of all Lenders to make Revolving
Credit Loans and issue and participate in Letters of Credit, as such amount may
be reduced or increased at any time or from time to time pursuant to the terms
hereof. The Revolving Credit Commitment of all Lenders on the Closing Date shall
be Two Hundred Million Dollars ($200,000,000).
"Revolving Credit Commitment Percentage" means, as to any Lender at any
time, the ratio of (a) the amount of the Revolving Credit Commitment of such
Lender to (b) the Revolving Credit Commitments of all Lenders.
"Revolving Credit Facility" means the revolving credit facility established
pursuant to Article II of this Agreement.
"Revolving Credit Loan" means any revolving credit loan made to the
Borrower pursuant to Section 2.1, and all such revolving credit loans
collectively as the context requires.
"Revolving Credit Maturity Date" means the earliest of the dates referred
to in Section 2.7.
"Revolving Credit Notes" means the collective reference to the Revolving
Credit Notes, if any, made by the Borrower payable to the order of each Lender
holding a Revolving Credit Commitment, substantially in the form of Exhibit A-1
hereto, evidencing the Revolving Credit Facility, and any amendments,
supplements and modifications thereto, any substitutes therefor, and any
replacements, restatements, renewals or extension thereof, in whole or in part;
and "Revolving Credit Note" means any of such Revolving Credit Notes.
"Security Documents" means the collective reference to the Guaranty
Agreement, the Collateral Agreement, the Mortgages (if applicable), the
Reaffirmation Agreement and each other agreement or writing pursuant to which
the Borrower or any Restricted Subsidiary thereof purports to pledge or grant a
security interest in any property or assets securing the Obligations or any such
Person purports to guaranty the payment and/or performance of the Obligations,
in each case, as amended, restated, supplemented or otherwise modified from time
to time.
"Senior Subordinated Note Payment Date" has the meaning set fort in Section
4.4(b)(vii).
"Senior Subordinated Notes" means the existing 8 3/8% senior subordinated
notes of the Borrower due April 15, 2008.
"Solvent" means, as to the Borrower and its Restricted Subsidiaries on a
particular date, that any such Person (a) has capital sufficient to carry on its
business and transactions and all business and transactions in which it is about
to engage and is able to pay its debts as they mature, (b) owns property having
a value, both at fair valuation and at present fair saleable value, greater than
the amount required to pay its probable liabilities (including contingencies),
and (c) does not believe that it will incur debts or liabilities beyond its
ability to pay such debts or liabilities as they mature.
"Subordinated Debt" means the collective reference to any Debt of the
Borrower or any Restricted Subsidiary subordinated in right and time of payment
to the Obligations with a maturity no earlier than a date that is six (6) months
after the Term Loan Maturity Date and containing such other terms and conditions
(including, without limitation, the subordination terms), in each case as are
satisfactory to the Administrative Agent.
17
"Subsidiary" means as to any Person, any corporation, partnership, limited
liability company or other entity of which more than fifty percent (50%) of the
outstanding capital stock or other ownership interests having ordinary voting
power to elect a majority of the board of directors or other managers of such
corporation, partnership, limited liability company or other entity is at the
time owned by or the management is otherwise controlled by such Person
(irrespective of whether, at the time, capital stock or other ownership
interests of any other class or classes of such corporation, partnership,
limited liability company or other entity shall have or might have voting power
by reason of the happening of any contingency). Unless otherwise qualified,
references to "Subsidiary" or "Subsidiaries" herein shall refer to those of the
Borrower; provided that, notwithstanding the foregoing, the Unrestricted
Subsidiaries shall not be deemed to be Subsidiaries for the purposes of Articles
X and XI of this Agreement.
"Swingline Commitment" means the lesser of (a) Fifteen Million Dollars
($15,000,000) and (b) the Revolving Credit Commitment.
"Swingline Facility" means the swingline facility established pursuant to
Section 2.2.
"Swingline Lender" means Wachovia in its capacity as swingline lender
hereunder.
"Swingline Loan" means any swingline loan made by the Swingline Lender to
the Borrower pursuant to Section 2.2, and all such swingline loans collectively
as the context requires.
"Swingline Note" means the Swingline Note made by the Borrower payable to
the order of the Swingline Lender, substantially in the form of Exhibit A-2
hereto, evidencing the Swingline Loans, and any amendments, supplements and
modifications thereto, any substitutes therefor, and any replacements,
restatements, renewals or extensions thereof, in whole or in part.
"Swingline Termination Date" means the first to occur of (a) the
resignation of Wachovia as Administrative Agent in accordance with Section 13.9
and (b) the Revolving Credit Maturity Date.
"Syndication Agent" means each of Fleet National Bank and US Bank, National
Association in its capacity as syndication agent hereunder.
"Synthetic Lease" means any synthetic lease, tax retention operating lease,
off-balance sheet loan or similar off-balance sheet financing product where such
transaction is considered borrowed money indebtedness for tax purposes but is
classified as an Operating Lease in accordance with GAAP.
"Tangible Net Worth" shall mean the amount of assets of the Borrower and
its Restricted Subsidiaries shown on the Consolidated balance sheet of the
Borrower and its Subsidiaries (but excluding from such assets any items which
would be treated as intangibles under GAAP, including, but not limited to
capitalized interest, debt discount and expense, goodwill, patents, trademarks,
copyrights, licenses, and franchises), less all liabilities of the Borrower and
its Restricted Subsidiaries, all computed in accordance with GAAP applied on a
consistent basis.
"Taxes" has the meaning assigned thereto in Section 5.11(a).
"Term Loan Commitment" means (a) as to any Lender, the obligation of such
Lender to make the Term Loans to the account of the Borrower hereunder in an
aggregate principal amount not to exceed the amount set forth opposite such
Lender's name on the Register, as such amount may be reduced or otherwise
modified at any time or from time to time pursuant to the terms hereof and (b)
as to all Lenders, the aggregate commitment to make Term Loans. The Term Loan
Commitment of all Lenders as of the Closing Date shall be Two Hundred Seventy
Five Million Dollars ($275,000,000).
"Term Loan Facility" means the term loan facility established pursuant to
Article IV of this Agreement.
"Term Loan Maturity Date" means the first to occur of (a) January 8, 2011,
or (b) the date of termination by the Administrative Agent on behalf of the
Lenders pursuant to Section 12.2(a).
"Term Loan Percentage" means, as to any Lender, (a) prior to making the
Term Loans, the ratio of (i) the Term Loan Commitment of such Lender to (ii) the
Term Loan Commitments of all Lenders and (b) after the Term Loans are made, the
ratio of (i) the outstanding principal balance of the Term Loan of such Lender
to (ii) the aggregate outstanding principal balance of the Term Loans of all
Lenders.
"Term Loans" shall mean the term loans to be made to the Borrower by the
Lenders pursuant to Section 4.1.
18
"Term Notes" means the Term Notes made by the Borrower payable to the order
of each of the Lenders, substantially in the form of Exhibit A-3 hereto,
evidencing the Debt incurred by the Borrower pursuant to the Term Loan Facility,
and any amendments, modifications and supplements thereto, any substitute
therefor, and any replacement, restatements, renewals or extensions thereof, in
whole or in part; and "Term Note" means any of such Term Notes.
"Termination Event" means except for any such event or condition that could
not reasonably be expected to have a Material Adverse Effect: (a) a "Reportable
Event" described in Section 4043 of ERISA for which the notice requirement has
not been waived by the PBGC, or (b) the withdrawal of the Borrower or any ERISA
Affiliate from a Pension Plan during a plan year in which it was a "substantial
employer" as defined in Section 4001(a)(2) of ERISA, or (c) the termination of a
Pension Plan, the filing of a notice of intent to terminate a Pension Plan or
the treatment of a Pension Plan amendment as a termination, under Section 4041
of ERISA, if the plan assets are not sufficient to pay all plan liabilities, or
(d) the institution of proceedings to terminate, or the appointment of a trustee
with respect to, any Pension Plan by the PBGC, or (e) any other event or
condition which would constitute grounds under Section 4042(a) of ERISA for the
termination of, or the appointment of a trustee to administer, any Pension Plan,
or (f) the imposition of a Lien pursuant to Section 412 of the Code or Section
302 of ERISA, or (g) the partial or complete withdrawal of the Borrower or any
ERISA Affiliate from a Multiemployer Plan if withdrawal liability is asserted by
such plan, or (h) any event or condition which results in the reorganization or
insolvency of a Multiemployer Plan under Sections 4241 or 4245 of ERISA, or (i)
any event or condition which results in the termination of a Multiemployer Plan
under Section 4041A of ERISA or the institution by PBGC of proceedings to
terminate a Multiemployer Plan under Section 4042 of ERISA.
"Uniform Customs" means the Uniform Customs and Practice for Documentary
Credits (1993 Revision), effective January, 1994 International Chamber of
Commerce Publication No. 500.
"UCC" means the Uniform Commercial Code as in effect in the State of New
York, as amended or modified from time to time.
"United States" means the United States of America.
"Unrestricted Subsidiary" means any Subsidiary of the Borrower listed on
Schedule 1.1(b) or which is designated as an Unrestricted Subsidiary after the
Closing Date pursuant to Section 9.9, provided that at all times such (a)
Unrestricted Subsidiary's obligations are non-recourse to the Borrower and its
Subsidiaries and (b) Unrestricted Subsidiary individually and collectively with
all other Unrestricted Subsidiaries meets the requirements set forth in Section
9.9.
"Wachovia" means Wachovia Bank, National Association, a national banking
association, and its successors.
"Wholly-Owned" means, with respect to a Subsidiary, that all of the shares
of capital stock or other ownership interests of such Subsidiary are, directly
or indirectly, owned or controlled by the Borrower and/or one or more of its
Wholly-Owned Subsidiaries (except for directors' qualifying shares or other
shares required by Applicable Law to be owned by a Person other than the
Borrower).
"Working Capital" means, for any period of determination, current assets
excluding cash minus current liabilities (excluding any principal payments
associated with the Revolving Credit Loans), all determined in accordance with
GAAP.
SECTION 1.2 General.
--------
Unless otherwise specified, a reference in this Agreement to a particular
article, section, subsection, Schedule or Exhibit is a reference to that
article, section, subsection, Schedule or Exhibit of this Agreement. Wherever
from the context it appears appropriate, each term stated in either the singular
or plural shall include the singular and plural, and pronouns stated in the
masculine, feminine or neuter gender shall include the masculine, the feminine
and the neuter. Any reference herein to "Charlotte time" shall refer to the
applicable time of day in Charlotte, North Carolina.
19
SECTION 1.3 Other Definitions and Provisions.
---------------------------------
(a) Use of Capitalized Terms. Unless otherwise defined therein, all
capitalized terms defined in this Agreement shall have the defined meanings when
used in this Agreement, the Notes and the other Loan Documents or any
certificate, report or other document made or delivered pursuant to this
Agreement.
(b) Miscellaneous. The words "hereof", "herein" and "hereunder" and words
of similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement.
(c) Plural and Singular. The meanings of defined terms are generally
applicable to the singular and plural forms of the defined terms.
ARTICLE II
REVOLVING CREDIT FACILITY
SECTION 2.1 Revolving Credit Loans.
-----------------------
Subject to the terms and conditions of this Agreement, and in reliance upon
the representations and warranties set forth herein, each Lender with a
Revolving Credit Commitment severally agrees to make Revolving Credit Loans to
the Borrower from time to time from the Closing Date through, but not including,
the Revolving Credit Maturity Date as requested by the Borrower in accordance
with the terms of Section 2.3; provided, that (a) the aggregate principal amount
of all outstanding Revolving Credit Loans (after giving effect to any amount
requested) shall not exceed the Revolving Credit Commitment less the sum of all
outstanding Swingline Loans and L/C Obligations and (b) the principal amount of
outstanding Revolving Credit Loans from any Lender to the Borrower shall not at
any time exceed such Lender's Revolving Credit Commitment less such Lender's
Revolving Credit Commitment Percentage of outstanding L/C Obligations and
outstanding Swingline Loans. Each Revolving Credit Loan by a Lender shall be in
a principal amount equal to such Lender's Revolving Credit Commitment Percentage
of the aggregate principal amount of Revolving Credit Loans requested on such
occasion. Subject to the terms and conditions hereof, the Borrower may borrow,
repay and reborrow Revolving Credit Loans hereunder until the Revolving Credit
Maturity Date.
SECTION 2.2 Swingline Loans.
----------------
(a) Availability. Subject to the terms and conditions of this Agreement,
the Swingline Lender agrees to make Swingline Loans to the Borrower from time to
time from the Closing Date through, but not including, the Swingline Termination
Date; provided, that the aggregate principal amount of all outstanding Swingline
Loans (after giving effect to any amount requested), shall not exceed the lesser
of (i) the Revolving Credit Commitment less the sum of all outstanding Revolving
Credit Loans and the L/C Obligations and (ii) the Swingline Commitment; provided
further that the Swingline Lender will not make a Swingline Loan from and after
the date which is one (1) day after it has received written notice from the
Administrative Agent (upon the request of the Required Lenders) that one or more
of the applicable conditions to Extensions of Credit specified in Section 6.3 is
not then satisfied until such conditions are satisfied or waived in accordance
with the provisions of this Agreement (and the Swingline Lender shall be
entitled to conclusively rely on any such notice and shall have no obligation to
independently investigate the accuracy of such notice and shall have no
liability to the Borrower in respect thereof if such notice proves to be
inaccurate).
(b) Refunding.
(i) Swingline Loans shall be refunded by the Lenders with a Revolving
Credit Commitment on demand by the Swingline Lender. Such refundings shall be
made by the Lenders in accordance with their respective Revolving Credit
Commitment Percentages and shall thereafter be reflected as Revolving Credit
Loans of the Lenders on the books and records of the Administrative Agent. Each
Lender shall fund its respective Revolving Credit Commitment Percentage of
Revolving Credit Loans as required to repay Swingline Loans outstanding to the
Swingline Lender upon demand by the Swingline Lender but in no event later than
3:00 p.m. (Charlotte time) on the next succeeding Business Day after such demand
is made. No Lender's obligation to fund its respective Revolving Credit
Commitment Percentage of a Swingline Loan shall be affected by any other
Lender's failure to fund its Revolving Credit Commitment Percentage of a
Swingline Loan, nor shall any Lender's Revolving Credit Commitment Percentage be
increased as a result of any such failure of any other Lender to fund its
Revolving Credit Commitment Percentage of a Swingline Loan.
20
(ii) The Borrower shall pay to the Swingline Lender on demand the amount
of such Swingline Loans to the extent amounts received from the Lenders are not
sufficient to repay in full the outstanding Swingline Loans requested or
required to be refunded. In addition, the Borrower hereby authorizes the
Administrative Agent to charge any account maintained by the Borrower with the
Swingline Lender (up to the amount available therein) in order to immediately
pay the Swingline Lender the amount of such Swingline Loans to the extent
amounts received from the Lenders are not sufficient to repay in full the
outstanding Swingline Loans requested or required to be refunded. If any portion
of any such amount paid to the Swingline Lender shall be recovered by or on
behalf of the Borrower from the Swingline Lender in bankruptcy or otherwise, the
loss of the amount so recovered shall be ratably shared among all the Lenders in
accordance with their respective Revolving Credit Commitment Percentages (unless
the amounts so recovered by or on behalf of the Borrower pertain to a Swingline
Loan extended after the occurrence and during the continuance of an Event of
Default of which the Administrative Agent has received notice in the manner
required pursuant to Section 13.5 and which such Event of Default has not been
waived by the Required Lenders or the Lenders, as applicable).
(iii) Each Lender with a Revolving Credit Commitment acknowledges and
agrees that its obligation to refund Swingline Loans in accordance with the
terms of this Section 2.2 is absolute and unconditional and shall not be
affected by any circumstance whatsoever, including, without limitation,
non-satisfaction of the conditions set forth in Article VI. Further, each Lender
agrees and acknowledges that if prior to the refunding of any outstanding
Swingline Loans pursuant to this Section 2.2, one of the events described in
Section 12.1(h) or (i) shall have occurred, each Lender will, on the date the
applicable Revolving Credit Loan would have been made, purchase an undivided
participating interest in the Swingline Loan to be refunded in an amount equal
to its Revolving Credit Commitment Percentage of the aggregate amount of such
Swingline Loan. Each Lender will immediately transfer to the Swingline Lender,
in immediately available funds, the amount of its participation and upon receipt
thereof the Swingline Lender will deliver to such Lender a certificate
evidencing such participation dated the date of receipt of such funds and for
such amount. Whenever, at any time after the Swingline Lender has received from
any Lender such Lender's participating interest in a Swingline Loan, the
Swingline Lender receives any payment on account thereof, the Swingline Lender
will distribute to such Lender its participating interest in such amount
(appropriately adjusted, in the case of interest payments, to reflect the period
of time during which such Lender's participating interest was outstanding and
funded).
SECTION 2.3 Procedure for Advances of Revolving Credit and Swingline Loans.
---------------------------------------------------------------
(a) Requests for Borrowing. The Borrower shall give the Administrative
Agent irrevocable prior written notice substantially in the form attached hereto
as Exhibit B (a "Notice of Borrowing") not later than 2:00 p.m. (Charlotte time)
(i) on the same Business Day as each Base Rate Loan and each Swingline Loan and
(ii) at least three (3) Business Days before each LIBOR Rate Loan, of its
intention to borrow, specifying (A) the date of such borrowing, which shall be a
Business Day, (B) the amount of such borrowing, which shall be (x) with respect
to Base Rate Loans (other than Swingline Loans) in an aggregate principal amount
of $1,000,000 or a whole multiple of $500,000 in excess thereof, (y) with
respect to LIBOR Rate Loans in an aggregate principal amount of $5,000,000 or a
whole multiple of $1,000,000 in excess thereof and (z) with respect to Swingline
Loans in an aggregate principal amount of $100,000 or a whole multiple of
$100,000 in excess thereof, (C) whether such Loan is to be a Revolving Credit
Loan or Swingline Loan, (D) in the case of a Revolving Credit Loan whether the
Loans are to be LIBOR Rate Loans or Base Rate Loans, and (E) in the case of a
LIBOR Rate Loan, the duration of the Interest Period applicable thereto. A
Notice of Borrowing received after 2:00 p.m. (Charlotte time) shall be deemed
received on the next Business Day. The Administrative Agent shall promptly
notify the Lenders of each Notice of Borrowing.
21
(b) Disbursement of Revolving Credit and Swingline Loans. Not later than
3:00 p.m. (Charlotte time) on the proposed borrowing date, (i) each Lender will
make available to the Administrative Agent, for the account of the Borrower, at
the office of the Administrative Agent in funds immediately available to the
Administrative Agent, such Lender's Revolving Credit Commitment Percentage of
the Revolving Credit Loans to be made on such borrowing date and (ii) the
Swingline Lender will make available to the Administrative Agent, for the
account of the Borrower, at the office of the Administrative Agent in funds
immediately available to the Administrative Agent, the Swingline Loans to be
made on such borrowing date. The Borrower hereby irrevocably authorizes the
Administrative Agent to disburse the proceeds of each borrowing requested
pursuant to this Section 2.3 in immediately available funds by crediting or
wiring such proceeds to the deposit account of the Borrower identified in the
most recent notice substantially in the form of Exhibit C hereto (a "Notice of
Account Designation") delivered by the Borrower to the Administrative Agent or
as may be otherwise agreed upon by the Borrower and the Administrative Agent
from time to time. Subject to Section 5.7 hereof, the Administrative Agent shall
not be obligated to disburse the portion of the proceeds of any Revolving Credit
Loan requested pursuant to this Section 2.3 to the extent that any Lender has
not made available to the Administrative Agent its Revolving Credit Commitment
Percentage of such Loan. Revolving Credit Loans to be made for the purpose of
refunding Swingline Loans shall be made by the Lenders as provided in Section
2.2(b).
SECTION 2.4 Repayment of Loans.
-------------------
(a) Repayment on Termination Date. The Borrower hereby agrees to repay the
outstanding principal amount of (i) all Revolving Credit Loans in full on the
Revolving Credit Maturity Date, and (ii) all Swingline Loans in accordance with
Section 2.2(b), together, in each case, with all accrued but unpaid interest
thereon.
(b) Mandatory Repayment of Revolving Credit Loans. If at any time the
outstanding principal amount of all Revolving Credit Loans plus the sum of all
outstanding Swingline Loans and L/C Obligations exceeds the Revolving Credit
Commitment, the Borrower agrees to repay immediately upon notice from the
Administrative Agent, by payment to the Administrative Agent for the account of
the Lenders an amount equal to such excess, with each such repayment applied
first to the principal amount of outstanding Swingline Loans, second to the
principal amount of outstanding Revolving Credit Loans and third, with respect
to any Letters of Credit then outstanding, a payment of cash collateral into a
cash collateral account opened by the Administrative Agent, for the benefit of
the Lenders in an amount equal to the aggregate then undrawn and unexpired
amount of such Letters of Credit (such cash collateral to be applied in
accordance with Section 12.2(b)).
(c) Optional Repayments. The Borrower may at any time and from time to
time repay the Loans, in whole or in part, upon at least (i) three (3) Business
Days' irrevocable notice to the Administrative Agent with respect to LIBOR Rate
Loans (ii) one (1) Business Day irrevocable notice with respect to Base Rate
Loans and (iii) same day notice by 2:00 p.m. (Charlotte time) with respect to
Swingline Loans, substantially in the form attached hereto as Exhibit D (a
"Notice of Prepayment") specifying the date and amount of repayment and
whether the repayment is of LIBOR Rate Loans, Base Rate Loans, Swingline Loans
or a combination thereof, and, if of a combination thereof, the amount
allocable to each. Upon receipt of such notice, the Administrative Agent shall
promptly notify each Lender. If any such notice is given, the amount specified
in such notice shall be due and payable on the date set forth in such notice.
Partial repayments shall be in an aggregate amount of $1,000,000 or a whole
multiple of $500,000 in excess thereof with respect to Base Rate Loans (other
than Swingline Loans), $5,000,000 or a whole multiple of $1,000,000 in excess
thereof with respect to LIBOR Rate Loans and $100,000 or a whole multiple of
$100,000 in excess thereof with respect to Swingline Loans. Each such repayment
shall be accompanied by an amount required to be paid pursuant to Section 5.9
hereof.
(d) Limitation on Repayment of LIBOR Rate Loans. The Borrower may not
repay any LIBOR Rate Loan on any day other than on the last day of the Interest
Period applicable thereto unless such repayment is accompanied by any amount
required to be paid pursuant to Section 5.9 hereof.
(e) Hedging Agreements. No repayment or prepayment pursuant to this
Section 2.4 shall affect any of the Borrower's obligations under any Hedging
Agreement.
22
SECTION 2.5 Notes.
------
(a) Revolving Credit Notes. Except as otherwise provided in Section 14.10
(a)-(e), each Lender's Revolving Credit Loans and the obligation of the Borrower
to repay such Revolving Credit Loans may, at the election of such Lender, be
evidenced by a separate Revolving Credit Note executed by the Borrower payable
to the order of such Lender.
(b) Swingline Notes. The Swingline Loans and the obligation of the
Borrower to repay such Swingline Loans may, at the election of the Swingline
Lender, be evidenced by a Swingline Note executed by the Borrower payable to the
order of the Swingline Lender.
SECTION 2.6 Permanent Reduction of the Revolving Credit Commitment.
-------------------------------------------------------
(a) Voluntary Reduction. The Borrower shall have the right at any time and
from time to time, upon at least five (5) Business Days prior written notice to
the Administrative Agent, to permanently reduce, without premium or penalty, (i)
the entire Revolving Credit Commitment at any time or (ii) portions of the
Revolving Credit Commitment, from time to time, in an aggregate principal amount
not less than $5,000,000 or any whole multiple of $1,000,000 in excess thereof.
The amount of each partial permanent reduction shall be applied pro rata to
reduce the remaining mandatory reduction amounts required under Section 2.6(b),
and such reduction shall permanently reduce the Lenders' Revolving Credit
Commitments pro rata in accordance with their respective Revolving Credit
Commitment Percentages.
(b) Mandatory Reduction. If at any time proceeds ("Excess Proceeds")
remain after the prepayment in full of Term Loans pursuant to Section 4.4(b),
the Revolving Credit Commitment shall be permanently reduced on the date of
the required prepayment under Section 4.4(b) by an amount equal to the amount
of such Excess Proceeds.
(c) Corresponding Payment. Each permanent reduction permitted or required
pursuant to this Section 2.6 shall be accompanied by a payment of principal,
first to the principal amount of outstanding Swingline Loans, second to the
principal amount of outstanding Revolving Credit Loans and third, to any Letters
of Credit then outstanding, in each case sufficient to reduce the aggregate
outstanding Revolving Credit Loans, Swingline Loans and L/C Obligations, as
applicable, after such reduction to the Revolving Credit Commitment as so
reduced and if the Revolving Credit Commitment as so reduced is less than the
aggregate amount of all outstanding Letters of Credit, the Borrower shall be
required to deposit cash collateral in a cash collateral account opened by the
Administrative Agent in an amount equal to the aggregate then undrawn and
unexpired amount of such Letters of Credit. Such cash collateral shall be
applied in accordance with Section 12.2(b). Any reduction of the Revolving
Credit Commitment to zero shall be accompanied by payment of all outstanding
Revolving Credit Loans and Swingline Loans (and furnishing of cash collateral
satisfactory to the Administrative Agent for all L/C Obligations) and shall
result in the termination of the Revolving Credit Commitment and the Swingline
Commitment and the Revolving Credit Facility. Such cash collateral shall be
applied in accordance with Section 12.2(b). If the reduction of the Revolving
Credit Commitment requires the repayment of any LIBOR Rate Loan, such repayment
shall be accompanied by any amount required to be paid pursuant to Section 5.9.
23
SECTION 2.7 Termination of Revolving Credit Facility.
-----------------------------------------
The Revolving Credit Facility shall terminate on the earliest of (a)
January 8, 2008, (b) the date of termination by the Borrower pursuant to Section
2.6 of the entire Revolving Credit Commitment, or (c) the date of termination by
the Administrative Agent on behalf of the Lenders pursuant to Section 12.2(a).
ARTICLE III
LETTER OF CREDIT FACILITY
SECTION 3.1 L/C Commitment.
---------------
Subject to the terms and conditions hereof, the Issuing Lender, in reliance
on the agreements of the L/C Participants set forth in Section 3.4(a), agrees to
issue standby letters of credit ("Letters of Credit") for the account of the
Borrower on any Business Day from the Closing Date through but not including the
fifth (5th) Business Day prior to the Revolving Credit Maturity Date in such
form as may be approved from time to time by the Issuing Lender and the
Administrative Agent; provided, that the Issuing Lender shall have no obligation
to issue, and the L/C Participants shall have no obligation to participate in,
any Letter of Credit if, after giving effect to such issuance, (a) the L/C
Obligations would exceed the L/C Commitment or (b) the aggregate principal
amount of outstanding Revolving Credit Loans, plus the aggregate principal
amount of outstanding Swingline Loans, plus the aggregate amount of L/C
Obligations would exceed the Revolving Credit Commitment. Each Letter of Credit
(other than the Existing Letters of Credit) shall (i) be in a minimum amount of
$25,000 unless otherwise agreed to by the Issuing Lender, (ii) be a standby
letter of credit issued to support obligations of the Borrower or any of its
Restricted Subsidiaries, contingent or otherwise, incurred in the ordinary
course of business, (iii) expire on a date satisfactory to the Issuing Lender
and the Administrative Agent, which date shall be no later than the earlier of
(A) one (1) year after the date of its issuance (but any Letter of Credit issued
hereunder may, by its terms and consistent with the terms hereof, be renewable
annually with the consent of the Issuing Bank), and (B) the fifth (5th) Business
Day prior to the Revolving Credit Maturity Date and (iv) be subject to the
Uniform Customs and/or ISP98, as set forth in the Application or as determined
by the Issuing Lender and, to the extent not inconsistent therewith, the laws of
the State of New York. As of the Closing Date, each of the Existing Letters of
Credit shall constitute, for all purposes of this Agreement and the other Loan
Documents, a Letter of Credit issued and outstanding hereunder. The Issuing
Lender shall not at any time be obligated to issue, and the L/C Participants
shall have no obligation to participate in, any Letter of Credit hereunder if
such issuance would conflict with, or cause the Issuing Lender or any L/C
Participant to exceed any limits imposed by, any Applicable Law. References
herein to "issue" and derivations thereof with respect to Letters of Credit
shall also include extensions or modifications of any existing Letters of
Credit, unless the context otherwise requires.
SECTION 3.2 Procedure for Issuance of Letters of Credit.
--------------------------------------------
The Borrower may from time to time request that the Issuing Lender issue a
Letter of Credit by delivering to the Issuing Lender an Application therefor,
completed to the satisfaction of the Issuing Lender, and such other
certificates, documents and other papers and information ("L/C Supporting
Documentation") as the Issuing Lender and the Administrative Agent may request.
The Borrower will contemporaneously deliver to the Administrative Agent at the
Administrative Agent's Office a copy of such Application and L/C Supporting
Documentation. Upon receipt of any Application, the Issuing Lender shall process
such Application and the L/C Supporting Documentation delivered to it in
connection therewith in accordance with its customary procedures and shall,
after approving the same and receiving confirmation from the Administrative
Agent that sufficient availability exists under the Revolving Credit Facility
for issuance of such Letter of Credit, subject to Section 3.1 and Article VI
hereof, promptly issue the Letter of Credit requested thereby (but in no event
shall the Issuing Lender be required to issue any Letter of Credit earlier than
three (3) Business Days after its receipt of the Application therefor and all
L/C Supporting Documentation relating thereto) by issuing the original of such
24
Letter of Credit to the beneficiary thereof or as otherwise may be agreed by the
Issuing Lender and the Borrower; provided that the Issuing Lender shall not
issue a Letter of Credit from and after the date which is one (1) day after it
has received written notice from the Administrative Agent (upon the request of
the Required Lenders) that one or more of the applicable conditions to
Extensions of Credit specified in Section 6.3 is not then satisfied until such
conditions are satisfied or waived in accordance with the provisions of this
Agreement (and the Issuing Lender shall be entitled to conclusively rely on any
such notice and shall have no obligation to independently investigate the
accuracy of such notice and shall have no liability to the Borrower in respect
thereof if such notice proves to be inaccurate). The Issuing Lender shall
promptly furnish to the Borrower and the Administrative Agent a copy of such
Letter of Credit and promptly notify each Lender of the issuance and upon
request by any Lender, furnish to such Lender a copy of such Letter of Credit
and the amount of such Lender's participation therein.
SECTION 3.3 Commissions and Other Charges.
------------------------------
(a) The Borrower shall pay to the Administrative Agent, for the account of
the Issuing Lender and the L/C Participants, a letter of credit commission with
respect to each Letter of Credit in an amount equal to the face amount of such
Letter of Credit multiplied by the Applicable Margin with respect to Revolving
Credit Loans that are LIBOR Rate Loans (determined on a per annum basis). Such
commission shall be payable quarterly in arrears on the last Business Day of
each calendar quarter and on the Revolving Credit Maturity Date. The
Administrative Agent shall, promptly following its receipt thereof, distribute
to the Issuing Lender and the L/C Participants all commissions received pursuant
to this Section 3.3(a) in accordance with their respective Revolving Credit
Commitment Percentages.
(b) In addition to the foregoing commission, the Borrower shall pay the
Administrative Agent, for the account of the Issuing Lender, an issuance fee
with respect to each Letter of Credit issued hereunder in an amount equal to the
face amount of such Letter of Credit multiplied by one-eighth of one percent
(.125%) per annum. Such issuance fee shall be billed by the Administrative Agent
and shall be payable by the Borrower in equal quarterly payments, in arrears, on
the last Business Day of each calendar quarter and on the Revolving Credit
Maturity Date.
(c) In addition to the foregoing fees and commissions, the Borrower shall
pay or reimburse the Issuing Lender for such normal and customary costs and
expenses as are incurred or charged by the Issuing Lender in issuing, effecting
payment under, amending or otherwise administering any Letter of Credit.
SECTION 3.4 L/C Participations.
-------------------
(a) The Issuing Lender irrevocably agrees to grant and hereby grants to
each L/C Participant, and, to induce the Issuing Lender to issue Letters of
Credit hereunder, each L/C Participant irrevocably agrees to accept and purchase
and hereby accepts and purchases from the Issuing Lender, on the terms and
conditions hereinafter stated, for such L/C Participant's own account and risk
an undivided interest equal to such L/C Participant's Revolving Credit
Commitment Percentage in the Issuing Lender's obligations and rights under and
in respect of each Letter of Credit issued hereunder and the amount of each
draft paid by the Issuing Lender thereunder. Each L/C Participant
unconditionally and irrevocably agrees with the Issuing Lender that, if a draft
is paid under any Letter of Credit for which the Issuing Lender is not
reimbursed in full by the Borrower through a Revolving Credit Loan or otherwise
in accordance with the terms of this Agreement, such L/C Participant shall pay
to the Issuing Lender upon demand at the Issuing Lender's address for notices
specified herein an amount equal to such L/C Participant's Revolving Credit
Commitment Percentage of the amount of such draft, or any part thereof, which is
not so reimbursed.
(b) Upon becoming aware of any amount required to be paid by any L/C
Participant to the Issuing Lender pursuant to Section 3.4(a) in respect of any
unreimbursed portion of any payment made by the Issuing Lender under any Letter
of Credit, the Issuing Lender shall notify the Administrative Agent and each L/C
Participant of the amount and due date of such required payment and such L/C
Participant shall pay to the Issuing Lender the amount specified on the
applicable due date. If any such amount is paid to the Issuing Lender after the
date such payment is due, such L/C Participant shall pay to the Issuing Lender
on demand, in addition to such amount, the product of (i) such amount, times
(ii) the daily average Federal Funds Rate as determined by the Administrative
Agent during the period from and including the date such payment is due to the
date on which such payment is immediately available to the Issuing Lender, times
25
(iii) a fraction the numerator of which is the number of days that elapse during
such period and the denominator of which is 360. A certificate of the Issuing
Lender with respect to any amounts owing under this Section 3.4(b) shall be
conclusive in the absence of manifest error. With respect to payment to the
Issuing Lender of the unreimbursed amounts described in this Section 3.4(b), if
the L/C Participants receive notice that any such payment is due (A) prior to
1:00 p.m. (Charlotte time) on any Business Day, such payment shall be due that
Business Day, and (B) after 1:00 p.m. (Charlotte time) on any Business Day, such
payment shall be due on the following Business Day.
(c) Whenever, at any time after the Issuing Lender has made payment under
any Letter of Credit and has received from any L/C Participant its Revolving
Credit Commitment Percentage of such payment in accordance with this Section
3.4, the Issuing Lender receives any payment related to such Letter of Credit
(whether directly from the Borrower or otherwise, or any payment of interest on
account thereof), the Issuing Lender will distribute to such L/C Participant its
pro rata share thereof; provided, that in the event that any such payment
received by the Issuing Lender shall be required to be returned by the Issuing
Lender, such L/C Participant shall return to the Issuing Lender the portion
thereof previously distributed by the Issuing Lender to it.
SECTION 3.5 Reimbursement Obligation of the Borrower.
-----------------------------------------
In the event of any drawing under any Letter of Credit, the Borrower agrees
to reimburse (either with the proceeds of a Revolving Credit Loan as provided
for in this Section 3.5 or with funds from other sources), the Issuing Lender
not later than 1:00 p.m. (Charlotte time) on the next succeeding Business Day
for the amount of (a) such draft so paid and (b) any amounts referred to in
Section 3.3(c) incurred by the Issuing Lender in connection with such payment.
The Issuing Lender shall deliver written notice of any drawing under a Letter of
Credit to the Administrative Agent and the Borrower. Unless the Borrower shall
immediately notify the Issuing Lender that the Borrower intends to reimburse the
Issuing Lender for such drawing from other sources or funds, the Borrower shall
be deemed to have timely given a Notice of Borrowing to the Administrative Agent
requesting that the Lenders make a Revolving Credit Loan bearing interest at the
Base Rate on such date in the amount of (a) such draft so paid and (b) any
amounts referred to in Section 3.3(c) incurred by the Issuing Lender in
connection with such payment, and the Lenders shall make a Revolving Credit Loan
bearing interest at the Base Rate in such amount, the proceeds of which shall be
applied to reimburse the Issuing Lender for the amount of the related drawing
and costs and expenses. Each Lender acknowledges and agrees that its obligation
to fund a Revolving Credit Loan in accordance with this Section 3.5 to reimburse
the Issuing Lender for any draft paid under a Letter of Credit is absolute and
unconditional and shall not be affected by any circumstance whatsoever,
including, without limitation, non-satisfaction of the conditions set forth in
Section 2.3(a) or Article VI. If the Borrower has elected to pay the amount of
such drawing with funds from other sources and shall fail to reimburse the
Issuing Lender as provided above, the unreimbursed amount of such drawing shall
bear interest at the rate which would be payable on any outstanding Base Rate
Loans which were then overdue from the date such amounts become payable (whether
at stated maturity, by acceleration or otherwise) until payment in full.
SECTION 3.6 Obligations Absolute.
---------------------
The Borrower's obligations under this Article III (including, without
limitation, the Reimbursement Obligation) shall be absolute and unconditional
under any and all circumstances and irrespective of any set-off, counterclaim or
defense to payment which the Borrower may have or have had against the Issuing
Lender or any beneficiary of a Letter of Credit or any other Person. The
Borrower also agrees that the Issuing Lender, the Administrative Agent and the
L/C Participants shall not be responsible for, and the Borrower's Reimbursement
Obligation under Section 3.5 shall not be affected by, among other things, the
validity or genuineness of documents or of any endorsements thereon, even though
such documents shall in fact prove to be invalid, fraudulent or forged, or any
dispute between or among the Borrower and any beneficiary of any Letter of
Credit or any other party to which such Letter of Credit may be transferred or
any claims whatsoever of the Borrower against any beneficiary of such Letter of
Credit or any such transferee. The Issuing Lender shall not be liable for any
error, omission, interruption or delay in transmission, dispatch or delivery of
any message or advice, however transmitted, in connection with any Letter of
Credit, except for errors or omissions caused by the Issuing Lender's gross
negligence or willful misconduct. The Borrower agrees that any action taken or
omitted by the Issuing Lender or the Administrative Agent under or in connection
with any Letter of Credit or the related drafts or documents, if done in the
26
absence of gross negligence or willful misconduct, shall be binding on the
Borrower and shall not result in any liability of the Issuing Lender, the
Administrative Agent or any L/C Participant to the Borrower. The responsibility
of the Issuing Lender to the Borrower in connection with any draft presented for
payment under any Letter of Credit shall, in addition to any payment obligation
expressly provided for in such Letter of Credit, be limited to determining that
the documents (including each draft) delivered under such Letter of Credit in
connection with such presentment are in conformity with such Letter of Credit.
SECTION 3.7 Effect of Application.
----------------------
To the extent that any provision of any Application related to any Letter
of Credit is inconsistent with the provisions of this Article III, the
provisions of this Article III shall apply.
ARTICLE IV
TERM LOAN FACILITY
SECTION 4.1 Term Loan.
----------
Subject to the terms and conditions of this Agreement, each Lender
severally agrees to make a Term Loan to the Borrower on the Closing Date. The
Term Loan shall be funded by each Lender in a principal amount equal to such
Lender's Term Loan Percentage of the aggregate principal amount of the Term
Loans made on the Closing Date, which aggregate principal amount shall equal the
total Term Loan Commitment as of the Closing Date.
SECTION 4.2 Procedure for Advance of Term Loan.
-----------------------------------
The Borrower shall give the Administrative Agent an irrevocable Notice of
Borrowing prior to 2:00 p.m. (Charlotte time) on the Closing Date requesting
that the Lenders make the Term Loan as a Base Rate Loan on such date (provided
that the Borrower may request, on or prior to the Closing Date, that the Lenders
make the Term Loan as a LIBOR Rate Loan if the Borrower has delivered to the
Administrative Agent a letter in form and substance satisfactory to the
Administrative Agent indemnifying the Lenders in the manner set forth in Section
5.9 of this Agreement). Upon receipt of such Notice of Borrowing from the
Borrower, the Administrative Agent shall promptly notify each Lender thereof.
Not later than 3:00 p.m. (Charlotte time) on the Closing Date, each Lender will
make available to the Administrative Agent for the account of the Borrower, at
the office of the Administrative Agent in immediately available funds, the
amount of such Term Loan to be made by such Lender on such borrowing date. The
Borrower hereby irrevocably authorizes the Administrative Agent to disburse the
proceeds of the Term Loan in immediately available funds by wire transfer to
such Person or Persons as may be designated by the Borrower.
27
SECTION 4.3 Repayment of Term Loan.
-----------------------
The Borrower shall repay the aggregate outstanding principal amount of the
Term Loan in consecutive quarterly installments on the last Business Day of each
of April, July, October and January commencing April 30, 2004 as set forth
below, except as the amount of individual installments may be adjusted pursuant
to Section 4.4 hereof:
YEAR PAYMENT DATE PRINCIPAL INSTALLMENT TERM LOAN COMMITMENT
($) ($)
================================================================================
2004 April 30 $687,500 $274,312,500
July 30 $687,500 $273,625,000
October 29 $687,500 $272,937,500
================================================================================
2005 January 31 $687,500 $272,250,000
April 29 $687,500 $271,562,500
July 29 $687,500 $270,875,000
October 31 $687,500 $270,187,500
================================================================================
2006 January 31 $687,500 $269,500,000
April 28 $687,500 $268,812,500
July 31 $687,500 $268,125,000
October 31 $687,500 $267,437,500
================================================================================
2007 January 31 $687,500 $266,750,000
April 30 $687,500 $266,062,500
July 31 $687,500 $265,375,000
October 31 $687,500 $264,687,500
================================================================================
2008 January 31 $687,500 $264,000,000
April 30 $687,500 $263,312,500
July 31 $687,500 $262,625,000
October 31 $687,500 $261,937,500
================================================================================
2009 January 30 $687,500 $261,250,000
April 30 $687,500 $260,562,500
July 31 $687,500 $259,875,000
October 30 $687,500 $259,187,500
================================================================================
2010 January 29 $687,500 $258,500,000
April 30 $64,625,000 $193,875,000
July 30 $64,625,000 $129,250,000
October 29 $64,625,000 $64,625,000
----------------------------------------------------------------------
Term Loan Maturity Date $64,625,000 $0
================================================================================
If not sooner paid, the Term Loan shall be paid in full, together with
accrued interest thereon, on the Term Loan Maturity Date.
28
SECTION 4.4 Prepayments of Term Loan.
-------------------------
(a) Optional Prepayment of Term Loan. The Borrower shall have the right at
any time and from time to time, upon delivery to the Administrative Agent of a
Notice of Prepayment at least three (3) Business Days prior to any repayment, to
prepay the Term Loan in whole or in part without premium or penalty except as
provided in Section 5.9. Each optional prepayment of the Term Loan hereunder
shall be in an aggregate principal amount of at least $5,000,000 or any whole
multiple of $1,000,000 in excess thereof and shall be applied to the outstanding
principal installments of the Term Loan in inverse order of maturity thereof.
Each repayment shall be accompanied by any amount required to be paid pursuant
to Section 5.9 hereof.
(b) Mandatory Prepayments of Term Loans.
(i) Debt Proceeds. The Borrower shall make mandatory principal
prepayments of the Term Loans in the manner set forth in Section 4.4(b)(viii)
below in amounts equal to one hundred percent (100%) of the aggregate Net Cash
Proceeds in excess of $1,000,000 in the aggregate during any Fiscal Year from
any incurrence of either (A) Debt permitted solely under and incurred under
Section 11.1(g) or (B) Debt not otherwise permitted pursuant to Section 11.1,
by the Borrower or any of its Restricted Subsidiaries. Such prepayment shall be
made within three (3) Business Days after the date of receipt of Net Cash
Proceeds of any such transaction.
(ii) Subordinated Debt Proceeds. The Borrower shall make mandatory
principal prepayments of the Term Loans in the manner set forth in Section
4.4(b)(viii) below in amounts equal to one hundred percent (100%) of the Net
Cash Proceeds from any incurrence of Subordinated Debt permitted pursuant to
Section 11.1(f), or otherwise permitted by the Required Lenders, by the Borrower
or any of its Restricted Subsidiaries. Such prepayment shall be made within
three (3) Business Days after the date of receipt of Net Cash Proceeds of any
such transaction.
(iii) Equity Proceeds. The Borrower shall make mandatory principal
prepayments of the Term Loans in the manner set forth in Section 4.4(b)(viii)
below in amounts equal to fifty percent (50%) of the aggregate Net Cash Proceeds
from any offering of equity securities by the Borrower or any of its Restricted
Subsidiaries other than solely as a result of offerings of equity securities
made in connection with any employee stock option, incentive plan or stock
purchase plan or made in connection with compensation or incentive plans for
directors and officers, in each case, entered into in the ordinary course of
business, or the exercise of any options or other convertible securities in
connection therewith. Such prepayment shall be made within three (3) Business
Days after the date of receipt of Net Cash Proceeds of any such transaction.
(iv) Asset Sale Proceeds. No later than one hundred eighty 180) days
following the Borrower's or applicable Restricted Subsidiary's receipt thereof,
the Borrower shall make mandatory principal prepayments of the Term Loans in the
manner set forth in Section 4.4(b)(viii) below in amounts equal to one hundred
percent (100%) of the aggregate Net Cash Proceeds in excess of $10,000,000 in
the aggregate during any Fiscal Year from the sale or other disposition or
series of related sales or other dispositions of assets by the Borrower or any
of its Restricted Subsidiaries other than sales or other dispositions of assets
permitted pursuant to Section 11.5 (a), (b), (d), (f) and (g). Notwithstanding
any of the foregoing to the contrary, upon and during the continuance of an
Event of Default and upon notice from the Administrative Agent, all such Net
Cash Proceeds received by the Borrower and its Restricted Subsidiaries shall be
applied to make prepayments of the Term Loans, such prepayments to be made
within three (3) Business Days after the Borrower's or such Restricted
Subsidiary's receipt of all such Net Cash Proceeds.
(v) Insurance and Condemnation Proceeds. No later than one hundred
eighty (180) days following the date of receipt by the Borrower or any of its
Restricted Subsidiaries of any Net Cash Proceeds under any of the insurance
policies maintained by the Borrower or any of its Subsidiaries or from any
condemnation proceeding (the "Insurance and Condemnation Proceeds") which have
not been previously reinvested (whether before or after the receipt of such Net
Cash Proceeds) as of such date in similar replacement assets, the Borrower shall
make mandatory principal prepayments of the Term Loans in the manner set forth
in Section 4.4(b)(viii) below in amounts equal to one hundred percent (100%) of
the aggregate amount of such Insurance and Condemnation Proceeds in excess of
$100,000 received by the Borrower or any of its Restricted Subsidiaries with
respect to each occurrence for which Insurance and Condemnation Proceeds are
received. Notwithstanding any of the foregoing to the contrary, upon and during
the continuance of an Event of Default and upon notice from the Administrative
Agent, all Insurance and Condemnation Proceeds received by the Borrower or its
Restricted Subsidiaries shall be applied to make prepayments of the Term Loans,
such prepayments to be made within three (3) Business Days after the Borrower's
or such Restricted Subsidiary's receipt of such Insurance and Condemnation
Proceeds.
29
(vi) Excess Cash Flow. No later than one hundred (100) days after the end
of any Fiscal Year, the Borrower shall make mandatory principal prepayments of
the Term Loans in the manner set forth in Section 4.4(b)(viii) below in an
amount equal to fifty percent (50%) of Excess Cash Flow, if any, for such Fiscal
Year.
(vii) Blocked Term Loan Proceeds. In the event that the Senior
Subordinated Notes shall not have been paid in full on or before January 23,
2004 (the "Senior Subordinated Note Payment Date"), the Borrower shall make a
mandatory principal prepayment of the Term Loans in the manner set forth in
Section 4.4(b) (viii) below in an amount equal to one hundred percent (100%) of
the aggregate Blocked Term Loan Proceeds. Notwithstanding anything to the
contrary contained in this Agreement, such prepayment shall not be subject to
the provisions of the last paragraph of this Section 4.4 with respect to the
right of any Term Loan Lender to refuse its pro-rata share of any such
mandatory prepayment.
(viii) Notice; Manner of Payment. Upon the occurrence of any event
triggering the prepayment requirement under Sections 4.4(b)(i) through and
including 4.4(b)(vii), the Borrower shall promptly deliver a Notice of
Prepayment to the Administrative Agent and upon receipt of such notice, the
Administrative Agent shall promptly so notify the Lenders. Each prepayment under
this Section 4.4(b) shall be applied as follows: first, to reduce in inverse
order of maturity the remaining scheduled principal installments of the Term
Loans and (ii) second, to the extent of any excess, to reduce permanently the
Revolving Credit Commitment, pursuant to Section 2.6(b).
Amounts repaid under the Term Loans pursuant to Section 4.3 or prepaid
under the Term Loans pursuant to this Section 4.4 may not be reborrowed and will
constitute a permanent reduction in such Term Loan Commitment. Each prepayment
shall be accompanied by any amount required to be paid pursuant to Section 5.9
hereof.
Notwithstanding anything in this Section 4.4 to the contrary, except with
respect to any mandatory prepayment under Section 4.4(b)(vii), any Term Loan
Lender shall have the right to refuse its pro rata share (based on Term Loan
Percentage) of any such mandatory prepayment at which time the remaining amount
shall be applied first, to temporarily reduce the Revolving Credit Loans, and
then, to the extent of any remaining funds, the Borrower may elect to (a) prepay
the outstanding Term Loans in the manner set forth in this Section 4.4
regardless of the election of the Term Loan Lender or (b) retain such excess
amount. No prepayment or repayment pursuant to this Section 4.4 shall affect any
of the Borrower's obligations under any Hedging Agreement.
SECTION 4.5 Term Notes.
-----------
Except as otherwise provided in Section 14.10(a) - (e), each Lender's Term
Loan and the obligation of the Borrower to repay such Term Loan may, at the
election of such Lender, be evidenced by a separate Term Note executed by the
Borrower payable to the order of such Lender.
30
ARTICLE V
GENERAL LOAN PROVISIONS
SECTION 5.1 Interest.
---------
(a) Interest Rate Options. Subject to the provisions of this Section 5.1,
at the election of the Borrower, (i) Revolving Credit Loans and Term Loans shall
bear interest at (A) the Base Rate plus the Applicable Margin as set forth in
Section 5.1(c) or (B) the LIBOR Rate plus the Applicable Margin as set forth in
Section 5.1(c) (provided that the LIBOR Rate shall not be available until three
(3) Business Days after the Closing Date unless the Borrower has delivered to
the Administrative Agent a letter in form and substance satisfactory to the
Administrative Agent indemnifying the Lenders in the manner set forth in Section
5.9 of this Agreement) and (ii) any Swingline Loans shall bear interest at the
Base Rate plus the Applicable Margin. The Borrower shall select the rate of
interest and Interest Period, if any, applicable to any Loan at the time a
Notice of Borrowing is given pursuant to Section 2.3 or Section 4.2, as
applicable, or at the time a Notice of Conversion/Continuation is given pursuant
to Section 5.2. Any Loan or any portion thereof as to which the Borrower has not
duly specified an interest rate as provided herein shall be deemed a Base Rate
Loan.
(b) Interest Periods. In connection with each LIBOR Rate Loan, the
Borrower, by giving notice at the times described in Section 5.1(a), shall elect
an interest period (each, an "Interest Period") to be applicable to such Loan,
which Interest Period shall be a period of one (1), two (2), three (3) or six
(6) months with respect to each LIBOR Rate Loan; provided that:
(i) the Interest Period shall commence on the date of advance of or
conversion to any LIBOR Rate Loan and, in the case of immediately successive
Interest Periods, each successive Interest Period shall commence on the date on
which the immediately preceding Interest Period expires;
(ii) if any Interest Period would otherwise expire on a day that is not a
Business Day, such Interest Period shall expire on the next succeeding Business
Day; provided, that if any Interest Period with respect to a LIBOR Rate Loan
would otherwise expire on a day that is not a Business Day but is a day of the
month after which no further Business Day occurs in such month, such Interest
Period shall expire on the immediately preceding Business Day;
(iii) any Interest Period with respect to a LIBOR Rate Loan that begins on
the last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of the relevant calendar month at the
end of such Interest Period;
(iv) no Interest Period shall extend beyond the Revolving Credit Maturity
Date or the Term Loan Maturity Date, as applicable, and the Borrower shall use
reasonable efforts to select Interest Periods which will permit the Borrower to
make mandatory reductions of the Revolving Credit Commitment pursuant to Section
2.6(b) and the quarterly principal installment payments pursuant to Section 4.3
without payment of any amounts pursuant to Section 5.9; and
(v) there shall be no more than eight (8) Interest Periods in effect at
any time.
31
(c) Applicable Margin. The Applicable Margin provided for in Section 5.1(a)
with respect to any Loan (the "Applicable Margin") shall be based upon the
applicable table set forth below and shall be determined and adjusted quarterly
on the date (each a "Calculation Date") ten (10) Business Days after the date by
which the Borrower is required to provide an Officer's Compliance Certificate
for the most recently ended fiscal quarter of the Borrower; provided that (a)
the initial Applicable Margin under the Revolving Credit Facility shall be based
on Pricing Level II (as shown below) and shall remain at Pricing Level II until
the first Calculation Date occurring after the Closing Date and, thereafter the
Pricing Level shall be determined by reference to the Leverage Ratio as of the
last day of the most recently ended fiscal quarter of the Borrower preceding the
applicable Calculation Date, (b) the initial Applicable Margin under the Term
Loan Facility shall be based on Pricing Level I (as shown below) and shall
remain at Pricing Level I until the first Calculation Date occurring after the
Closing Date and, thereafter the Pricing Level shall be determined by reference
to the Leverage Ratio as of the last day of the most recently ended fiscal
quarter of the Borrower preceding the applicable Calculation Date, and (c) if
the Borrower fails to provide the Officer's Compliance Certificate as required
by Section 8.2 for the most recently ended fiscal quarter of the Borrower
preceding the applicable Calculation Date, the Applicable Margin from such
Calculation Date shall be based on Pricing Level I (as shown below) with respect
to the Revolving Credit Facility and the Term Loan Facility until such time as
an appropriate Officer's Compliance Certificate is provided, at which time the
Pricing Level shall be determined by reference to the Leverage Ratio as of the
last day of the most recently ended fiscal quarter of the Borrower preceding
such Calculation Date. Except as provided in the preceding sentence, the
Applicable Margin shall be effective from one Calculation Date until the next
Calculation Date. Any adjustment in the Applicable Margin shall be applicable to
all Extensions of Credit then existing or subsequently made or issued.
Revolving Credit Facility
- --------------------------------------------------------------------------------
Pricing Leverage Ratio Applicable Applicable Base
Level LIBOR Rate Margin
Margin
- --------------------------------------------------------------------------------
I Greater than or equal to 2.50% 1.25%
1.75 to 1.00
- --------------------------------------------------------------------------------
II Greater than or equal to 2.25% 1.00%
1.00 to 1.00 but less
than 1.75 to 1.00
- --------------------------------------------------------------------------------
III Less than 1.00 to 1.00 2.00% 0.75%
- --------------------------------------------------------------------------------
Term Loan Facility
- --------------------------------------------------------------------------------
Pricing Leverage Ratio Applicable Applicable Base
Level LIBOR Rate Margin
Margin
- --------------------------------------------------------------------------------
I Greater than or equal to 2.75% 1.50%
1.25 to 1.00
- --------------------------------------------------------------------------------
II Less than 1.25 to 1.00 2.50% 1.25%
- --------------------------------------------------------------------------------
(d) Default Rate. Subject to Section 12.3, at the discretion of the
Administrative Agent or as directed by the Required Lenders, upon the occurrence
and during the continuance of an Event of Default, (i) the Borrower shall no
longer have the option to request LIBOR Rate Loans or Swingline Loans, (ii) all
outstanding LIBOR Rate Loans shall bear interest at a rate per annum of two
percent (2%) in excess of the rate then applicable to LIBOR Rate Loans until the
end of the applicable Interest Period and thereafter at a rate equal to two
percent (2%) in excess of the rate then applicable to Base Rate Loans, and (iii)
all outstanding Base Rate Loans and other Obligations arising hereunder or under
any other Loan Document shall bear interest at a rate per annum equal to two
percent (2%) in excess of the rate then applicable to Base Rate Loans or such
other Obligations arising hereunder or under any other Loan Document. Interest
shall continue to accrue on the Notes after the filing by or against the
Borrower of any petition seeking any relief in bankruptcy or under any act or
law pertaining to insolvency or debtor relief, whether state, federal or
foreign.
32
(e) Interest Payment and Computation. Interest on each Base Rate Loan shall
be payable in arrears on the last Business Day of each calendar quarter
commencing March 31, 2004 ; and interest on each LIBOR Rate Loan shall be
payable on the last day of each Interest Period applicable thereto, and if such
Interest Period extends over three (3) months, at the end of each three (3)
month interval during such Interest Period. Interest on LIBOR Rate Loans and all
fees payable hereunder shall be computed on the basis of a 360-day year and
assessed for the actual number of days elapsed and interest on Base Rate Loans
shall be computed on the basis of a 365/366-day year and assessed for the actual
number of days elapsed.
(f) Maximum Rate. In no contingency or event whatsoever shall the aggregate
of all amounts deemed interest hereunder or under any of the Notes charged or
collected pursuant to the terms of this Agreement or pursuant to any of the
Notes exceed the highest rate permissible under any Applicable Law which a court
of competent jurisdiction shall, in a final determination, deem applicable
hereto. In the event that such a court determines that the Lenders have charged
or received interest hereunder in excess of the highest applicable rate, the
rate in effect hereunder shall automatically be reduced to the maximum rate
permitted by Applicable Law and the Lenders shall at the Administrative Agent's
option (i) promptly refund to the Borrower any interest received by the Lenders
in excess of the maximum lawful rate or (ii) apply such excess to the principal
balance of the Obligations on a pro rata basis. It is the intent hereof that the
Borrower not pay or contract to pay, and that neither the Administrative Agent
nor any Lender receive or contract to receive, directly or indirectly in any
manner whatsoever, interest in excess of that which may be paid by the Borrower
under Applicable Law.
SECTION 5.2 Notice and Manner of Conversion or Continuation of Loans.
---------------------------------------------------------
Provided that no Default or Event of Default has occurred and is then
continuing, the Borrower shall have the option to (a) convert at any time
following the third Business Day after the Closing Date all or any portion of
any outstanding Base Rate Loans (other than Swingline Loans) in a principal
amount equal to $5,000,000 or any whole multiple of $1,000,000 in excess thereof
into one or more LIBOR Rate Loans and (b) upon the expiration of any Interest
Period, (i) convert all or any part of its outstanding LIBOR Rate Loans in a
principal amount equal to $1,000,000 or a whole multiple of $500,000 in excess
thereof into Base Rate Loans (other than Swingline Loans) or (ii) continue such
LIBOR Rate Loans as LIBOR Rate Loans. Whenever the Borrower desires to convert
or continue Loans as provided above, the Borrower shall give the Administrative
Agent irrevocable prior written notice in the form attached as Exhibit E (a
"Notice of Conversion/Continuation") not later than 2:00 p.m. (Charlotte time)
three (3) Business Days before the day on which a proposed conversion or
continuation of such Loan is to be effective specifying (A) the Loans to be
converted or continued, and, in the case of any LIBOR Rate Loan to be converted
or continued, the last day of the Interest Period therefor, (B) the effective
date of such conversion or continuation (which shall be a Business Day), (C) the
principal amount of such Loans to be converted or continued, and (D) the
Interest Period to be applicable to such converted or continued LIBOR Rate Loan.
The Administrative Agent shall promptly notify the Lenders of such Notice of
Conversion/Continuation.
33
SECTION 5.3 Fees.
-----
(a) Commitment Fee. Commencing on the Closing Date, the Borrower shall pay
to the Administrative Agent, for the account of the Lenders, a non-refundable
commitment fee at a rate per annum equal to the applicable rate based upon the
table set forth below (the "Commitment Fee Rate") on the average daily unused
portion of the Revolving Credit Commitment; provided that the amount of
outstanding Swingline Loans shall not be considered usage of the Revolving
Credit Commitment for the purpose of calculating such commitment fee. The
commitment fee shall be payable in arrears on the last Business Day of each
calendar quarter during the term of this Agreement commencing March 31, 2004,
and on the Revolving Credit Maturity Date. Such commitment fee shall be
distributed by the Administrative Agent to the Lenders pro rata in accordance
with the Lenders' respective Revolving Credit Commitment Percentages. The
Commitment Fee Rate shall be determined and adjusted quarterly on each
Calculation Date; provided, however, that (a) the initial Commitment Fee Rate
shall be based on Pricing Level II (as shown below) and shall remain at Pricing
Level II until the first Calculation Date occurring after the Closing Date and
thereafter the Pricing Level shall be determined by reference to the Leverage
Ratio as of the last day of the most recently ended fiscal quarter of the
Borrower preceding the applicable Calculation Date, and (b) if the Borrower
fails to provide the Officer's Compliance Certificate as required by Section 8.2
for the most recently ended fiscal quarter of the Borrower preceding the
applicable Calculation Date, the Commitment Fee Rate from such Calculation Date
shall be based on Pricing Level I (as shown below) until such time as an
appropriate Officer's Compliance Certificate is provided, at which time the
Pricing Level shall be determined by reference to the Leverage Ratio as of the
last day of the most recently ended fiscal quarter of the Borrower preceding
such Calculation Date. Except as provided in the preceding sentence, the
Commitment Fee Rate shall be effective from one Calculation Date until the next
Calculation Date.
Pricing Level Leverage Ratio Commitment Fee Rate
-------------------------------------------------------------------------------
I Greater than or equal to 1.75 to 1.00 0.500%
-------------------------------------------------------------------------------
II Greater than or equal to 1.00 to 1.00
but less than 1.75 to 1.00 0.375%
-------------------------------------------------------------------------------
III Less than 1.00 to 1.00 0.375%
-------------------------------------------------------------------------------
(b) Administrative Agent's and Other Fees. In order to compensate the
Administrative Agent for structuring and syndicating the Loans and for its
obligations hereunder, the Borrower agrees to pay to the Administrative Agent,
for its own account, the fees set forth in the separate fee letter agreement
executed by the Borrower and the Administrative Agent dated November 21, 2003.
34
SECTION 5.4 Manner of Payment.
------------------
Each payment by the Borrower on account of the principal of or interest on
the Loans or of any fee, commission or other amounts (including the
Reimbursement Obligation) payable to the Lenders under this Agreement or any
Note shall be made not later than 1:00 p.m. (Charlotte time) on the date
specified for payment under this Agreement to the Administrative Agent at the
Administrative Agent's Office for the account of the Lenders (other than as set
forth below) pro rata in accordance with their respective Revolving Credit
Commitment Percentages or Term Loan Percentages, as applicable, (except as
specified below), in Dollars, in immediately available funds and shall be made
without any set-off, counterclaim or deduction whatsoever. Any payment received
after such time but before 3:00 p.m. (Charlotte time) on such day shall be
deemed a payment on such date for the purposes of Section 12.1, but for all
other purposes shall be deemed to have been made on the next succeeding Business
Day. Any payment received after 3:00 p.m. (Charlotte time) shall be deemed to
have been made on the next succeeding Business Day for all purposes. Upon
receipt by the Administrative Agent of each such payment, the Administrative
Agent shall distribute to each Lender at its address for notices set forth
herein its pro rata share of such payment in accordance with such Lender's
Revolving Credit Commitment Percentage or Term Loan Percentage, as applicable,
(except as specified below) and shall wire advice of the amount of such credit
to each Lender. Each payment to the Administrative Agent of the L/C
Participants' commissions shall be made in like manner, but for the account of
the L/C Participants. Each payment to the Administrative Agent of the Issuing
Lender's fees and expenses shall be made in like manner, but for the account of
the Issuing Lender. Each payment to the Administrative Agent of Administrative
Agent's fees or expenses shall be made for the account of the Administrative
Agent and any amount payable to any Lender under Sections 5.8, 5.9, 5.10, 5.11
or 14.2 shall be paid to the Administrative Agent for the account of the
applicable Lender. Subject to Section 5.1(b)(ii) if any payment under this
Agreement or any Note shall be specified to be made upon a day which is not a
Business Day, it shall be made on the next succeeding day which is a Business
Day and such extension of time shall in such case be included in computing any
interest if payable along with such payment.
SECTION 5.5 Crediting of Payments and Proceeds.
-----------------------------------
In the event that the Borrower shall fail to pay any of the Obligations
when due and the Obligations have been accelerated pursuant to Section 12.2, all
payments received by the Lenders upon the Notes and the other Obligations and
all net proceeds from the enforcement of the Obligations shall be applied: (a)
first to all expenses then due and payable by the Borrower hereunder and under
the other Loan Documents, (b) then to all indemnity obligations then due and
payable by the Borrower hereunder and under the other Loan Documents, (c) then
to all Administrative Agent's and Issuing Lender's fees then due and payable by
the Borrower hereunder and under the other Loan Documents, (d) then to all
commitment and other fees and commissions then due and payable by the Borrower
hereunder, (e) then to accrued and unpaid interest on the Notes and accrued and
unpaid interest on the Reimbursement Obligation (pro rata in accordance with all
such amounts due), (f) then to the principal amount of the Notes and the
Reimbursement Obligation and any payments (including any termination payments
and any accrued and unpaid interest thereon) due in respect of any Hedging
Agreement with any Lender or the Administrative Agent (which such Hedging
Agreement is permitted hereunder) (pro rata in accordance with all such amounts
due) and (g) then to the cash collateral account described in Section 12.2(b) to
the extent of any L/C Obligations then outstanding, in that order.
SECTION 5.6 Adjustments.
------------
If any Lender (a "Benefited Lender") shall at any time receive any payment
of all or part of the Obligations owing to it, or interest thereon, or if any
Lender shall at any time receive any collateral in respect to the Obligations
owing to it (whether voluntarily or involuntarily, by set-off or otherwise)
(other than pursuant to Sections 5.8, 5.9, 5.10, 5.11 or 14.2) in a greater
proportion than any such payment to and collateral received by any other Lender,
if any, in respect of the similar Obligations owing to such other Lender, or
interest thereon, such Benefited Lender shall purchase for cash from the other
Lenders such portion of each such other Lender's Extensions of Credit, or shall
provide such other Lenders with the benefits of any such collateral, or the
proceeds thereof, as shall be necessary to cause such Benefited Lender to share
the excess payment or benefits of such collateral or proceeds ratably with each
of the Lenders; provided, that if all or any portion of such excess payment or
benefits is thereafter recovered from such Benefited Lender, such purchase shall
35
be rescinded, and the purchase price and benefits returned to the extent of such
recovery, but without interest. The Borrower agrees that each Lender so
purchasing a portion of another Lender's Extensions of Credit may exercise all
rights of payment (including, without limitation, rights of set-off) with
respect to such portion as fully as if such Lender were the direct holder of
such portion.
SECTION 5.7 Nature of Obligations of Lenders Regarding Extensions of Credit;
----------------------------------------------------------------
Assumption by the Administrative Agent.
---------------------------------------
The obligations of the Lenders under this Agreement to make the Loans and
issue or participate in Letters of Credit are several and are not joint or joint
and several. Unless the Administrative Agent shall have received notice from a
Lender prior to a proposed borrowing date that such Lender will not make
available to the Administrative Agent such Lender's ratable portion of the
amount to be borrowed on such date (which notice shall not release such Lender
of its obligations hereunder), the Administrative Agent may assume that such
Lender has made such portion available to the Administrative Agent on the
proposed borrowing date in accordance with Sections 2.3(b) and 4.2, and the
Administrative Agent may, in reliance upon such assumption, make available to
the Borrower on such date a corresponding amount. If such amount is made
available to the Administrative Agent on a date after such borrowing date, such
Lender shall pay to the Administrative Agent on demand an amount, until paid,
equal to the product of (a) the amount not made available by such Lender in
accordance with the terms hereof, times (b) the daily average Federal Funds Rate
during such period as determined by the Administrative Agent, times (c) a
fraction the numerator of which is the number of days that elapse from and
including such borrowing date to the date on which such amount not made
available by such Lender in accordance with the terms hereof shall have become
immediately available to the Administrative Agent and the denominator of which
is 360. A certificate of the Administrative Agent with respect to any amounts
owing under this Section 5.7 shall be conclusive, absent manifest error. If such
Lender's Revolving Credit Commitment Percentage or Term Loan Percentage, as
applicable, of such borrowing is not made available to the Administrative Agent
by such Lender within three (3) Business Days after such borrowing date, the
Administrative Agent shall be entitled to recover such amount made available by
the Administrative Agent with interest thereon at the rate per annum applicable
to Base Rate Loans hereunder, on demand, from the Borrower. The failure of any
Lender to make available its Revolving Credit Commitment Percentage or Term Loan
Percentage, as applicable, of any Loan requested by the Borrower shall not
relieve it or any other Lender of its obligation, if any, hereunder to make its
Revolving Credit Commitment Percentage or Term Loan Percentage, as applicable,
of such Loan available on the borrowing date, but no Lender shall be responsible
for the failure of any other Lender to make its Revolving Credit Commitment
Percentage or Term Loan Percentage, as applicable, of such Loan available on the
borrowing date. Notwithstanding anything set forth herein to the contrary, any
Lender that fails to make available its Revolving Credit Commitment Percentage
or Term Loan Percentage, as applicable, shall not (a) have any voting or consent
rights under or with respect to any Loan Document or (b) constitute a "Lender"
(or be included in the calculation of Required Lenders hereunder) for any voting
or consent rights under or with respect to any Loan Document.
36
SECTION 5.8 Changed Circumstances.
----------------------
(a) Circumstances Affecting LIBOR Rate Availability. If with respect to any
Interest Period the Administrative Agent or any Lender (after consultation with
the Administrative Agent) shall determine that, by reason of circumstances
affecting the foreign exchange and interbank markets generally, deposits in
eurodollars, in the applicable amounts are not being quoted via the Dow Jones
Market Screen 3750 or offered to the Administrative Agent or such Lender for
such Interest Period or that the LIBOR Rate for any requested Interest Period
with respect to a proposed LIBOR Rate Loan does not adequately and fairly
reflect the cost to such Lender of funding such Loan, then the Administrative
Agent shall forthwith give notice thereof to the Borrower. Thereafter, until the
Administrative Agent notifies the Borrower that such circumstances no longer
exist, the obligation of the Lenders to make LIBOR Rate Loans and the right of
the Borrower to convert any Loan to or continue any Loan as a LIBOR Rate Loan
shall be suspended, and the Borrower shall repay in full (or cause to be repaid
in full) the then outstanding principal amount of each such LIBOR Rate Loan
together with accrued interest thereon, on the last day of the then current
Interest Period applicable to such LIBOR Rate Loan or convert the then
outstanding principal amount of each such LIBOR Rate Loan to a Base Rate Loan as
of the last day of such Interest Period.
(b) Laws Affecting LIBOR Rate Availability. If, after the date hereof, the
introduction of, or any change in, any Applicable Law or any change in the
interpretation or administration thereof by any Governmental Authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any of the Lenders (or any of their respective Lending
Offices) with any request or directive (whether or not having the force of law)
of any such Governmental Authority, central bank or comparable agency, shall
make it unlawful or impossible for any of the Lenders (or any of their
respective Lending Offices) to honor its obligations hereunder to make or
maintain any LIBOR Rate Loan, such Lender shall promptly give notice thereof to
the Administrative Agent and the Administrative Agent shall promptly give notice
to the Borrower and the other Lenders. Thereafter, until the Administrative
Agent notifies the Borrower that such circumstances no longer exist, (i) the
obligations of the Lenders to make LIBOR Rate Loans and the right of the
Borrower to convert any Loan or continue any Loan as a LIBOR Rate Loan shall be
suspended and thereafter the Borrower may select only Base Rate Loans hereunder,
and (ii) if any of the Lenders may not lawfully continue to maintain a LIBOR
Rate Loan to the end of the then current Interest Period applicable thereto as a
LIBOR Rate Loan, the applicable LIBOR Rate Loan shall immediately be converted
to a Base Rate Loan for the remainder of such Interest Period.
(c) Increased Costs. If, after the date hereof, the introduction of, or any
change in, any Applicable Law, or in the interpretation or administration
thereof by any Governmental Authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by any of the
Lenders (or any of their respective Lending Offices) with any request or
directive (whether or not having the force of law) of such Governmental
Authority, central bank or comparable agency:
(i) shall (except as provided in Section 5.11(e)) subject any of the
Lenders (or any of their respective Lending Offices) to any tax, duty or other
charge with respect to any Note, Letter of Credit or Application or shall change
the basis of taxation of payments to any of the Lenders (or any of their
respective Lending Offices) of the principal of or interest on any Note, Letter
of Credit or Application or any other amounts due under this Agreement in
respect thereof (except for changes in the rate of franchise tax or tax on the
overall net income of any of the Lenders or any of their respective Lending
Offices imposed by the jurisdiction in which such Lender is organized or is or
should be qualified to do business or such Lending Office is located); provided
that the Borrower shall not be obligated to pay any amounts pursuant to this
Section 5.8(c)(i) to the extent that such amounts are duplicative of any amounts
paid by the Borrower pursuant to Section 5.11; or
37
(ii) shall impose, modify or deem applicable any reserve (including,
without limitation, any reserve imposed by the Board of Governors of the Federal
Reserve System), special deposit, insurance or capital or similar requirement
against assets of, deposits with or for the account of, or credit extended by
any of the Lenders (or any of their respective Lending Offices) or shall impose
on any of the Lenders (or any of their respective Lending Offices) or the
foreign exchange and interbank markets any other condition affecting any Note;
and the result of any of the foregoing events described in clause (i) or (ii)
above is to increase the costs to any of the Lenders of maintaining any LIBOR
Rate Loan or issuing or participating in Letters of Credit or to reduce the
yield or amount of any sum received or receivable by any of the Lenders under
this Agreement or under the Notes in respect of a LIBOR Rate Loan or Letter of
Credit or Application, then such Lender shall promptly notify the Administrative
Agent, and the Administrative Agent shall promptly notify the Borrower of such
fact and demand compensation therefor and, within fifteen (15) days after such
notice by the Administrative Agent, the Borrower shall pay to such Lender such
additional amount or amounts as will compensate such Lender or Lenders for such
increased cost or reduction. The Administrative Agent will promptly notify the
Borrower of any event of which it has knowledge which will entitle such Lender
to compensation pursuant to this Section 5.8(c); provided, that the
Administrative Agent shall incur no liability whatsoever to the Lenders or the
Borrower in the event it fails to do so. The amount of such compensation shall
be determined, in the applicable Lender's sole discretion, based upon the
assumption that such Lender funded its Revolving Credit Commitment Percentage or
Term Loan Percentage, as applicable, of the LIBOR Rate Loans in the London
interbank market and using any reasonable attribution or averaging methods which
such Lender deems appropriate and practical. A certificate of such Lender
setting forth the basis for determining such amount or amounts necessary to
compensate such Lender shall be forwarded to the Borrower through the
Administrative Agent and shall be conclusively presumed to be correct save for
manifest error.
SECTION 5.9 Indemnity.
----------
The Borrower hereby indemnifies each of the Lenders against any loss or
expense which may arise or be attributable to each Lender's obtaining,
liquidating or employing deposits or other funds acquired to effect, fund or
maintain any Loan (a) as a consequence of any failure by the Borrower to make
any payment when due of any amount due hereunder in connection with a LIBOR Rate
Loan, (b) due to any failure of the Borrower to borrow, continue or convert on a
date specified therefor in a Notice of Borrowing or Notice of
Conversion/Continuation or (c) due to any payment, prepayment or conversion of
any LIBOR Rate Loan on a date other than the last day of the Interest Period
therefor. The amount of such loss or expense shall be determined, in the
applicable Lender's sole discretion, based upon the assumption that such Lender
funded its Revolving Credit Commitment Percentage or Term Loan Percentage, as
applicable, of the LIBOR Rate Loans in the London interbank market and using any
reasonable attribution or averaging methods which such Lender deems appropriate
and practical. A certificate of such Lender setting forth the basis for
determining such amount or amounts necessary to compensate such Lender shall be
forwarded to the Borrower through the Administrative Agent and shall be
conclusively presumed to be correct save for manifest error.
SECTION 5.10 Capital Requirements.
---------------------
If either (a) the introduction of, or any change in, or in the
interpretation of, any Applicable Law or (b) compliance with any guideline or
request from any central bank or comparable agency or other Governmental
Authority (whether or not having the force of law), has or would have the effect
of reducing the rate of return on the capital of, or has affected or would
affect the amount of capital required to be maintained by, any Lender or any
corporation controlling such Lender as a consequence of, or with reference to
the Commitments and other commitments of this type, below the rate which such
Lender or such other corporation could have achieved but for such introduction,
change or compliance, then within five (5) Business Days after written demand by
any such Lender, the Borrower shall pay to such Lender from time to time as
specified by such Lender additional amounts sufficient to compensate such Lender
or other corporation for such reduction. A certificate as to such amounts
submitted to the Borrower and the Administrative Agent by such Lender, shall, in
the absence of manifest error, be presumed to be correct and binding for all
purposes.
38
SECTION 5.11 Taxes.
------
(a) Payments Free and Clear. Except as otherwise provided in Section
5.11(e), any and all payments by the Borrower hereunder or under the Notes or
the Letters of Credit shall be made free and clear of and without deduction for
any and all present or future taxes, levies, imposts, deductions, charges or
withholding, and all liabilities with respect thereto excluding, (i) in the case
of each Lender and the Administrative Agent, income and franchise taxes imposed
by the jurisdiction under the laws of which such Lender or the Administrative
Agent (as the case may be) is organized or is or should be qualified to do
business or any political subdivision thereof and (ii) in the case of each
Lender, income and franchise taxes imposed by the jurisdiction of such Lender's
Lending Office or any political subdivision thereof (all such non-excluded
taxes, levies, imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to as "Taxes"). If the Borrower shall be required by law to
deduct or withhold any Taxes from or in respect of any sum payable hereunder or
under any Note or in respect of any Letter of Credit to any Lender or the
Administrative Agent, (A) except as otherwise provided in Section 5.11(e), the
sum payable shall be increased as may be necessary so that after making all
required deductions or withholdings (including deductions or withholdings
applicable to additional sums payable under this Section 5.11) such Lender or
the Administrative Agent (as the case may be) receives an amount equal to the
amount such party would have received had no such deductions or withholdings
been made, (B) the Borrower shall make such deductions or withholdings, (C) the
Borrower shall pay the full amount deducted to the relevant taxing authority or
other authority in accordance with Applicable Law, and (D) the Borrower shall
deliver to the Administrative Agent and such Lender evidence of such payment to
the relevant taxing authority or other Governmental Authority in the manner
provided in Section 5.11(d).
(b) Stamp and Other Taxes. In addition, the Borrower shall pay any present
or future stamp, registration, recordation or documentary taxes or any other
similar fees or charges or excise or property taxes, levies of the United States
or any state or political subdivision thereof or any applicable foreign
jurisdiction which arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement, the
Loans, the Letters of Credit or the other Loan Documents, or the perfection of
any rights or security interest in respect thereof (hereinafter referred to as
"Other Taxes").
(c) Indemnity. Except as otherwise provided in Section 5.11(e), the
Borrower shall indemnify each Lender and the Administrative Agent for the full
amount of Taxes and Other Taxes (including, without limitation, any Taxes and
Other Taxes imposed by any jurisdiction on amounts payable under this Section
5.11) paid by such Lender or the Administrative Agent (as the case may be) and
any liability (including penalties, interest and expenses) arising therefrom or
with respect thereto, whether or not such Taxes or Other Taxes were correctly or
legally asserted. Such indemnification shall be made within thirty (30) days
from the date such Lender or the Administrative Agent (as the case may be) makes
written demand therefor.
(d) Evidence of Payment. Within thirty (30) days after the date of any
payment of Taxes or Other Taxes, the Borrower shall furnish to the
Administrative Agent and the applicable Lender, at its address referred to in
Section 14.1, the original or a certified copy of a receipt evidencing payment
thereof or other evidence of payment satisfactory to the Administrative Agent.
39
(e) Delivery of Tax Forms. To the extent required by Applicable Law to
reduce or eliminate withholding or payment of taxes, each Lender and the
Administrative Agent shall deliver to the Borrower, with a copy to the
Administrative Agent, on the Closing Date or concurrently with the delivery of
the relevant Assignment and Acceptance, as applicable, (i) two United States
Internal Revenue Service Forms W-9, Forms W-8ECI or Forms W-8BEN, as applicable
(or successor forms) properly completed and certifying in each case that such
Lender is entitled to a complete exemption from withholding or deduction for or
on account of any United States federal income taxes, and (ii) an Internal
Revenue Service Form W-8BEN or W-8ECI or successor applicable form, as the case
may be, to establish an exemption from United States backup withholding taxes.
Each such Lender further agrees to deliver to the Borrower, with a copy to the
Administrative Agent, as applicable, two Form W-9, Form W-8BEN or W-8ECI, or
successor applicable forms or manner of certification, as the case may be, on or
before the date that any such form expires or becomes obsolete or after the
occurrence of any event requiring a change in the most recent form previously
delivered by it to the Borrower, certifying in the case of a Form W-9, Form
W-8BEN or W-8ECI (or successor forms) that such Lender is entitled to receive
payments under this Agreement without deduction or withholding of any United
States federal income taxes (unless in any such case an event (including,
without limitation, any change in treaty, law or regulation) has occurred prior
to the date on which any such delivery would otherwise be required which renders
such forms inapplicable or the exemption to which such forms relate unavailable
and such Lender notifies the Borrower and the Administrative Agent that it is
not entitled to receive payments without deduction or withholding of United
States federal income taxes) and, in the case of a Form W-9, Form W-8BEN or
W-8ECI, establishing an exemption from United States backup withholding tax.
Notwithstanding anything in any Loan Document to the contrary, the Borrower
shall not be required to pay additional amounts to any Lender or the
Administrative Agent under Section 5.11 or Section 5.8(c), (i) if such Lender or
the Administrative Agent fails to comply with the requirements of this Section
5.11(e), other than to the extent that such failure is due to a change in law
occurring after the date on which such Lender or the Administrative Agent became
a party to this Agreement or (ii) that are the result of such Lender's or the
Administrative Agent's gross negligence or willful misconduct, as applicable.
(f) Survival. Without prejudice to the survival of any other agreement of
the Borrower hereunder, the agreements and obligations of the Borrower contained
in this Section 5.11 shall survive the payment in full of the Obligations and
the termination of the Commitments.
SECTION 5.12 Replacement of Lenders.
-----------------------
(a) Request for Compensation. If any Lender requests compensation pursuant
to Section 5.8 or Section 5.10, or if the Borrower is required to pay any
additional amount to any Lender or any Governmental Authority for the account of
any Lender pursuant to Section 5.11, then such Lender shall use reasonable
efforts to designate a different lending office for funding or booking its Loans
hereunder or to assign its rights and obligations hereunder to another of its
offices, branches or affiliates, if, in the judgment of such Lender, such
designation or assignment (A) would eliminate or reduce amounts payable pursuant
to Section 5.8, Section 5.10 or Section 5.11, as the case may be, in the future
and (B) would not subject such Lender to any unreimbursed cost or expense and
would not otherwise be disadvantageous to such Lender.
(b) Lender Replacement. If any Lender requests compensation pursuant to
Section 5.8 or Section 5.10, or if the Borrower is required to pay any
additional amount to any Lender or any Governmental Authority for the account of
any Lender pursuant to Section 5.11, then the Borrower may, upon notice to such
Lender and the Administrative Agent, require such Lender to assign and delegate,
without recourse (in accordance with and subject to the restrictions contained
in Section 14.10), all of its interests, rights and obligations under this
Agreement to an Eligible Assignee that shall assume such obligations (which
assignee may be another Lender, if a Lender accepts such assignment); provided
that (A) the Borrower shall have received the prior written consent of the
Administrative Agent, which consent shall not unreasonably be withheld, (B) such
Lender shall have received payment of an amount equal to the outstanding
principal of its Loans, accrued interest thereon, accrued fees, breakage costs
and all other amounts payable to it hereunder, from the assignee (to the extent
of such outstanding principal and accrued interest and fees) or the Borrower (in
the case of all other amounts) and (C) in the case of any such assignment
resulting from a claim for compensation pursuant to Section 5.8 or Section 5.10,
after giving effect to any such assignment, no claim for compensation under
Section 5.8 or Section 5.10 would reasonably be expected to be asserted by the
replacement Lender. A Lender shall not be required to make any such assignment
and delegation if, prior thereto, as a result of a waiver by such Lender or
otherwise, the circumstances entitling the Borrower to require such assignment
and delegation cease to apply.
40
(c) Effect of Replacement. To the extent that any Lender (a "Replaced
Lender") is required to assign all of its interests, rights and obligations
under this Agreement to an Eligible Assignee (a "Replacement Lender") pursuant
to this Section 5.12, upon the execution of all applicable assignment documents
and the satisfaction of all other conditions set forth herein, the Replacement
Lender shall become a Lender hereunder and the Replaced Lender shall cease to be
a Lender hereunder, except with respect to the indemnification provisions under
this Agreement, which provisions shall survive as to such Replaced Lender.
SECTION 5.13 Matters Applicable to all Requests for Compensation.
----------------------------------------------------
Notwithstanding any other provision of this Agreement to the contrary, the
Borrower shall not be obligated to make any payment to the Administrative Agent
or any Lender pursuant to Sections 5.8, 5.9, 5.10 or 5.11 in respect of any
amounts or costs accruing in or allocable to any period prior to the 120th day
preceding written demand by such Lender or the Administrative Agent upon the
Borrower for payment therefor (unless such amounts or costs prior to such 120
day period result from the retroactive effect of any of the events described in
Sections 5.8, 5.9, 5.10 or 5.11 giving rise to such written demand and which
occurred during such 120 day period).
SECTION 5.14 Security.
---------
The Obligations of the Borrower and the Guarantors shall be secured as
provided in the Security Documents (including, without limitation, the
Mortgages, if applicable, under the terms of Section 9.11).
ARTICLE VI
CLOSING; CONDITIONS OF CLOSING AND BORROWING
SECTION 6.1 Closing.
--------
The closing shall take place at the offices of Kennedy Covington Lobdell &
Hickman, L.L.P. at 10:00 a.m. on January 8, 2004, or on such other place, date
and time as the parties hereto shall mutually agree.
SECTION 6.2 Conditions to Closing and Initial Extensions of Credit.
-------------------------------------------------------
The obligation of the Lenders to close this Agreement and to make the
initial Loan or issue or participate in the initial Letter of Credit, if any, is
subject to the satisfaction of each of the following conditions:
(a) Executed Loan Documents. This Agreement, the Revolving Credit Notes,
the Swingline Note, the Term Notes and the Security Documents, together with any
other applicable Loan Documents, shall have been duly authorized, executed and
delivered to the Administrative Agent by the parties thereto, shall be in full
force and effect and no Default or Event of Default shall exist thereunder, and
the Borrower shall have delivered original counterparts thereof to the
Administrative Agent.
(b) Closing Certificates; etc.
(i) Officer's Certificate of the Borrower. The Administrative Agent
shall have received a certificate from a Responsible Officer, in form and
substance satisfactory to the Administrative Agent, to the effect that all
representations and warranties of the Borrower and each Subsidiary thereof
contained in this Agreement and the other Loan Documents are true, correct and
complete; that the Borrower and each Subsidiary thereof is not in violation of
any of the covenants contained in this Agreement and the other Loan Documents;
that, after giving effect to the transactions contemplated by this Agreement,
no Default or Event of Default has occurred and is continuing; and that the
Borrower and each Subsidiary thereof has satisfied each of the closing
conditions.
41
(ii) Certificate of Secretary of the Borrower and each Restricted
Subsidiary. The Administrative Agent shall have received a certificate of the
secretary or assistant secretary of the Borrower and each Restricted Subsidiary
certifying as to the incumbency and genuineness of the signature of each officer
of the Borrower and each Restricted Subsidiary executing Loan Documents to which
it is a party and certifying that attached thereto is a true, correct and
complete copy of (A) the articles of incorporation, certificate of formation,
certificate of partnership or other organizational document, as applicable, of
the Borrower or such Restricted Subsidiary and all amendments thereto, certified
as of a recent date by the appropriate Governmental Authority in its
jurisdiction of incorporation (or containing a representation that the articles
of incorporation, certificate of formation, certificate of partnership or other
organizational document, as applicable, of the Borrower or such Restricted
Subsidiary and all amendments thereto which were delivered to the Administrative
Agent in connection with the Existing Credit Agreement have not been repealed,
revoked, rescinded or further amended in any respect and that each remains in
full force and effect as of the Closing Date) (B) the bylaws, operating
agreement or partnership agreement, as applicable, of the Borrower or such
Restricted Subsidiary as in effect on the date of such certifications (or
containing a representation that the bylaws, operating agreement or partnership
agreement, as applicable, of the Borrower or such Restricted Subsidiary which
were delivered to the Administrative Agent in connection with the Existing
Credit Agreement have not been repealed, revoked, rescinded or further amended
in any respect and that each remains in full force and effect as of the Closing
Date), (C) resolutions duly adopted by the Board of Directors or other
applicable governing authority of the Borrower or such Restricted Subsidiary
authorizing the borrowings contemplated hereunder or the delivery of the
Reaffirmation Agreement, as the case may be, and the execution, delivery and
performance of this Agreement and the other Loan Documents to which it is a
party, and (D) each certificate required to be delivered pursuant to Section
6.2(b)(iii).
(iii) Certificates of Good Standing. The Administrative Agent shall have
received certificates as of a recent date of the good standing of the Borrower
and each Restricted Subsidiary under the laws of its jurisdiction of
organization and, to the extent requested by the Administrative Agent, each
other jurisdiction where the Borrower and each Restricted Subsidiary is
qualified to do business and a certificate of the relevant taxing authorities of
such jurisdictions certifying that such Person has filed required tax returns
and owes no delinquent taxes.
(iv) Opinions of Counsel. The Administrative Agent shall have received
favorable opinions of counsel to the Borrower and each Restricted Subsidiary
addressed to the Administrative Agent and the Lenders with respect to the
Borrower and each Restricted Subsidiary, the Loan Documents and such other
matters as the Lenders shall request.
(v) Tax Forms. The Administrative Agent shall have received copies of
the United States Internal Revenue Service forms required by Section 5.11(e)
hereof.
(c) Collateral.
(i) Filings and Recordings. All filings and recordations that are
necessary to perfect the security interests of the Lenders in the collateral
described in the Security Documents shall have been forwarded for filing in all
appropriate locations and the Administrative Agent shall have received evidence
satisfactory thereto that upon such filings and recordations such security
interests constitute valid and perfected first priority Liens therein, subject
to any Liens permitted under Section 11.2.
(ii) Pledged Collateral. The Administrative gent shall have received (A)
original stock certificates or other certificates evidencing the capital stock
or other ownership interests pledged pursuant to the Collateral Agreement
together with an undated stock power for each such certificate duly executed in
blank by the registered owner thereof and (B) each original promissory note
pledged pursuant to the Collateral Agreement together with an endorsement
thereto.
42
(iii) Lien Search. The Administrative Agent shall have received the results
of a Lien search (including a search as to judgments, pending litigation and tax
matters) made against the Borrower and each Restricted Subsidiary under the
Uniform Commercial Code (or applicable judicial docket) as in effect in any
state in which any of its assets are located, indicating among other things that
its assets are free and clear of any Lien except for Liens permitted hereunder.
(iv) Hazard and Liability Insurance. The Administrative Agent shall have
received certificates of insurance, evidence of payment of all insurance
premiums for the current policy year of each, and, if requested by the
Administrative Agent, copies (certified by a Responsible Officer) of insurance
policies in the form required under the Security Documents and otherwise in form
and substance reasonably satisfactory to the Administrative Agent.
(d) Consents; Defaults.
(i) Governmental and Third Party Approvals. The Borrower shall have
obtained all necessary approvals, authorizations and consents of any Person and
of all Governmental Authorities and courts having jurisdiction with respect to
the transactions contemplated by this Agreement and the other Loan Documents.
(ii) No Injunction, Etc. No action, proceeding, investigation, regulation
or legislation shall have been instituted, threatened or proposed before any
Governmental Authority to enjoin, restrain, or prohibit, or to obtain
substantial damages in respect of, or which is related to or arises out of this
Agreement or the other Loan Documents or the consummation of the transactions
contemplated hereby or thereby, or which, in the Administrative Agent's sole
discretion, would make it inadvisable to consummate the transactions
contemplated by this Agreement and such other Loan Documents.
(iii) No Event of Default. No Default or Event of Default shall have
occurred and be continuing.
(e) Financial Matters.
(i) Financial Statements. The Administrative Agent shall have received
the most recent audited Consolidated financial statements of the Borrower and
its Subsidiaries, all in form and substance satisfactory to the Administrative
Agent and prepared in accordance with GAAP.
(ii) Financial Condition Certificate. The Borrower shall have delivered
to the Administrative Agent a certificate, in form and substance satisfactory to
the Administrative Agent, and certified as accurate by a Responsible Officer,
that (A) the Borrower and each of its Restricted Subsidiaries are each Solvent,
(B) the Borrower's payables are current and not past due except to the extent
consistent with the Borrower's customary past practice, (C) attached thereto are
calculations evidencing compliance on a pro forma basis with the covenants
contained in Article X hereof, (D) the financial projections previously
delivered to the Administrative Agent represent the good faith estimates
(utilizing reasonable assumptions) of the financial condition and operations of
the Borrower and its Subsidiaries and (E) attached thereto is a calculation of
the Leverage Ratio pursuant to Section 10.1.
(iii) Payment at Closing; Fee Letters. The Borrower shall have paid to the
Administrative Agent and the Lenders the fees set forth or referenced in Section
5.3 due on the Closing Date and any other accrued and unpaid fees or commissions
due hereunder (including, without limitation, legal fees and expenses) and to
any other Person such amount as may be due thereto in connection with the
transactions contemplated hereby, including all taxes, fees and other charges in
connection with the execution, delivery, recording, filing and registration of
any of the Loan Documents.
43
(f) Miscellaneous.
(i) Notice of Borrowing. The Administrative Agent shall have received a
Notice of Borrowing, as applicable, from the Borrower in accordance with Section
2.3(a) and Section 4.2, and a Notice of Account Designation specifying the
account or accounts to which the proceeds of any Loans made after the Closing
Date are to be disbursed.
(ii) Repayment of Certain Amounts Outstanding under Existing Credit
Agreement. On the Closing Date, (i) with respect to the Existing Term Loans, (A)
such Existing Term Loans shall be repaid in full and the commitments and other
obligations and rights (except as expressly set forth in the Existing Credit
Agreement) of any lender that has funded a portion of such Existing Term Loans
shall be terminated (other than obligations or rights of such lender pursuant to
the Existing Revolving Credit Facility), (B) there shall have been paid in cash
in full all accrued but unpaid interest due with respect to such Existing Term
Loans to the Closing Date, (C) there shall have been paid in cash in full all
accrued but unpaid fees due with respect to such Existing Term Loans to the
Closing Date and all other amounts, costs and expenses then owing to the
administrative agent under the Existing Credit Agreement or any lender that has
funded a portion of such Existing Term Loans and (D) all promissory notes issued
by the Borrower to any lender that has funded a portion of such Existing Term
Loans shall be promptly returned to the Administrative Agent which shall forward
such promissory notes to the Borrower for cancellation, (ii) all outstanding
Existing Revolving Credit Loans shall continue as Revolving Credit Loans
hereunder and the Administrative Agent shall make such transfers of funds as are
necessary in order that the outstanding balance of such Revolving Credit Loans,
together with any Revolving Credit Loans funded on the Closing Date, are in
accordance with the Revolving Credit Commitment Percentages of the Lenders
hereunder, (iii) all outstanding Existing Swingline Loans shall continue as
Swingline Loans hereunder and (iv) all outstanding Existing Letters of Credit
shall continue as Letters of Credit hereunder.
(iii) Senior Subordinated Notes. The Administrative Agent shall have
received a call notice with respect to the Senior Subordinated Notes in form and
substance satisfactory to the Administrative Agent and written evidence of the
amount necessary to redeem and pay the Senior Subordinated Notes in full
(including, without limitation, any call premium related thereto) on the Senior
Subordinated Note Payment Date.
(iv) Blocked Term Loan Proceeds. A portion of the proceeds of the Term
Loan in an amount equal to $125,000,000 (the "Blocked Term Loan Proceeds") shall
have been deposited in a blocked deposit account or securities account at
Wachovia pursuant to an agreement in form and substance satisfactory to the
Administrative Agent and shall be used, along with other funds to be provided by
the Borrower, to redeem and pay the Senior Subordinated Notes in full on the
Senior Subordinated Note Payment Date.
(v) Other Documents. All opinions, certificates and other instruments
and all proceedings in connection with the transactions contemplated by this
Agreement shall be satisfactory in form and substance to the Administrative
Agent. The Administrative Agent shall have received copies of all other
documents, certificates and instruments reasonably requested thereby, with
respect to the transactions contemplated by this Agreement.
SECTION 6.3 Conditions to All Extensions of Credit.
---------------------------------------
The obligations of the Lenders to make any Extensions of Credit (including
the initial Extension of Credit), convert or continue any Loan and/or the
Issuing Lender to issue or extend any Letter of Credit are subject to the
satisfaction of the following conditions precedent on the relevant borrowing,
continuation, conversion, issuance or extension date:
44
(a) Continuation of Representations and Warranties. The representations and
warranties contained in Article VII shall be true and correct on and as of such
borrowing, continuation, conversion issuance or extension date with the same
effect as if made on and as of such date except for any representation and
warranty that specifically refers to an earlier date, which representation and
warranty shall remain true and correct as of such earlier date.
(b) No Existing Default. No Default or Event of Default shall have occurred
and be continuing (i) on the borrowing, continuation or conversion date with
respect to such Loan or after giving effect to the Loans to be made, continued
or converted on such date or (ii) on the issuance or extension date with respect
to such Letter of Credit or after giving effect to the issuance or extension of
such Letter of Credit on such date.
(c) Notices. The Administrative Agent shall have received a Notice a
Borrowing or Notice of Conversion/Continuation, as applicable, from the Borrower
in accordance with Section 2.3(a) and Section 4.2.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF THE BORROWER
SECTION 7.1 Representations and Warranties.
-------------------------------
To induce the Administrative Agent and Lenders to enter into this Agreement
and to induce the Lenders to make Extensions of Credit, the Borrower hereby
represents and warrants to the Administrative Agent and Lenders both before and
after giving effect to the transactions contemplated hereunder that:
(a) Organization; Power; Qualification. Each of the Borrower and its
Subsidiaries (i) is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation or formation, (ii) has the
power and authority to own its properties and to carry on its business as now
being and hereafter proposed to be conducted and (iii) except to the extent that
the failure to do so could not reasonably be expected to have a Material Adverse
Effect, is duly qualified and authorized to do business in each jurisdiction in
which the character of its properties or the nature of its business requires
such qualification and authorization. The jurisdictions in which the Borrower
and its Subsidiaries are organized and qualified to do business as of the
Closing Date are described on Schedule 7.1(a).
(b) Ownership. Each Subsidiary of the Borrower as of the Closing Date is
listed on Schedule 7.1(b). As of the Closing Date, the capitalization of the
Borrower and its Subsidiaries consists of the number of shares, authorized,
issued and outstanding, of such classes and series, with or without par value,
described on Schedule 7.1(b). All outstanding shares of the Borrower and its
Subsidiaries have been duly authorized and validly issued and are fully paid and
nonassessable, with no personal liability attaching to the ownership thereof,
and not subject to any preemptive or similar rights. The shareholders of the
Subsidiaries of the Borrower and the number of shares owned by each as of the
Closing Date are described on Schedule 7.1(b). As of the Closing Date, there are
no outstanding stock purchase warrants, subscriptions, options, securities,
instruments or other rights of any type or nature whatsoever, which are
convertible into, exchangeable for or otherwise provide for or permit the
issuance of capital stock of the Borrower, except as set forth in the most
recent audited financial statements thereof, or its Subsidiaries, except as
described on Schedule 7.1(b).
(c) Authorization of Agreement, Loan Documents and Borrowing. Each of the
Borrower and its Restricted Subsidiaries has the right, power and authority and
has taken all necessary corporate and other action to authorize the execution,
delivery and performance of this Agreement and each of the other Loan Documents
to which it is a party in accordance with their respective terms. This Agreement
and each of the other Loan Documents have been duly executed and delivered by
the duly authorized officers of the Borrower and each of its Subsidiaries party
thereto, and each such document constitutes the legal, valid and binding
obligation of the Borrower or its Subsidiary party thereto, enforceable in
accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar state or federal
debtor relief laws from time to time in effect which affect the enforcement of
creditors' rights in general and the availability of equitable remedies.
45
(d) Compliance of Agreement, Loan Documents and Borrowing with Laws, Etc.
The execution, delivery and performance by the Borrower and its Restricted
Subsidiaries of the Loan Documents to which each such Person is a party, in
accordance with their respective terms, the Extensions of Credit hereunder and
the transactions contemplated hereby do not and will not, by the passage of
time, the giving of notice or otherwise, (i) require any Governmental Approval
or violate any Applicable Law relating to the Borrower or any of its
Subsidiaries, (ii) conflict with, result in a breach of or constitute a default
under the articles of incorporation, bylaws or other organizational documents of
the Borrower or any of its Subsidiaries or any indenture, material agreement or
other material instrument to which such Person is a party or by which any of its
properties may be bound or any Governmental Approval relating to such Person,
(iii) result in or require the creation or imposition of any Lien upon or with
respect to any property now owned or hereafter acquired by such Person other
than Liens arising under the Loan Documents or (iv) require any consent or
authorization of, filing with, or other act in respect of, an arbitrator or
Governmental Authority and no consent of any other Person is required in
connection with the execution, delivery, performance, validity or enforceability
of this Agreement except, in each case, (A) as may be required by law affecting
the offering and sale of securities generally, (B) filings with the United
States Copyright Office and/or the United States Patent and Trademark Office,
(C) filings under the UCC and (D) those notices, consents and authorizations
which have been obtained prior to the Closing Date.
(e) Compliance with Law; Governmental Approvals. Each of the Borrower and
its Subsidiaries (i) has all Governmental Approvals required by any Applicable
Law for it to conduct its business, each of which is in full force and effect,
is final and not subject to review on appeal and is not the subject of any
pending or, to the best of its knowledge, threatened attack by direct or
collateral proceeding, (ii) is in compliance with each Governmental Approval
applicable to it and in compliance with all other Applicable Laws relating to it
or any of its respective properties and (iii) has timely filed all material
reports, documents and other materials required to be filed by it under all
Applicable Laws with any Governmental Authority and has retained all material
records and documents required to be retained by it under Applicable Law;
except, in each case referred to in clauses (i), (ii) and (iii) above, to the
extent that the failure to comply with the terms thereof could not reasonably be
expected to have a Material Adverse Effect.
(f) Tax Returns and Payments. Each of the Borrower and its Subsidiaries has
timely filed all federal, state, local and other tax returns required by
Applicable Law, and has paid all federal, state, local and other taxes,
assessments, fees and other governmental charges therein shown to be due and
payable, except those which are being contested in good faith by appropriate
proceedings diligently conducted and for which adequate reserves have been
provided in accordance with GAAP. To the knowledge of the Responsible Officers
of the Borrower and its Subsidiaries, there is (i) no ongoing audit, examination
or other investigation by any Governmental Authority of the tax liability of the
Borrower and its Subsidiaries which could reasonably be expected to have a
Material Adverse Effect, and (ii) no proposed tax assessment against the
46
Borrower or any Subsidiary that would, if made, have a Material Adverse Effect.
The Borrower does not intend to treat the Loans and/or Letters of Credit as
being a "reportable transaction" (within the meaning of Treasury Regulation
Section 1.6011-4). In the event that the Borrower determines to take any action
inconsistent with such intention, it will promptly notify the Administrative
Agent thereof. If the Borrower so notifies the Administrative Agent, the
Borrower acknowledges that one or more of the Lenders may treat its Loans and/or
Letters of Credit as part of a transaction that is subject to Treasury
Regulation Section 1.6011-4 or Section 301.6112-1, and the Administrative Agent
and such Lender or Lenders, as applicable, may file such forms or maintain such
lists and other records as they may determine is required by such Treasury
Regulations.
(g) Intellectual Property Matters. Each of the Borrower and its Restricted
Subsidiaries owns or possesses rights to use all franchises, licenses,
copyrights, copyright applications, patents, patent rights or licenses, patent
applications, trademarks, trademark rights, service mark, service mark rights,
trade names, trade name rights, copyrights and rights with respect to the
foregoing which are required to conduct its business. Except to the extent that
it could not reasonably be expected to have a Material Adverse Effect, no event
has occurred which permits, or after notice or lapse of time or both would
permit, the revocation or termination of any such rights, and neither the
Borrower nor any Restricted Subsidiary thereof is liable to any Person for
infringement under Applicable Law with respect to any such rights as a result of
its business operations.
(h) Environmental Matters. Except as to matters which could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect:
(i) The properties owned, leased or operated by the Borrower and its
Subsidiaries now do not contain, and to their knowledge have not previously
contained, any Hazardous Materials in amounts or concentrations which (A)
constitute or constituted a violation of applicable Environmental Laws or (B)
could give rise to liability under applicable Environmental Laws;
(ii) The Borrower, each Subsidiary and such properties and all operations
conducted in connection therewith are in compliance, and have been in
compliance, with all applicable Environmental Laws, and there is no
contamination at, under or about such properties or such operations which could
interfere with the continued operation of such properties or impair the fair
saleable value thereof;
(iii) Neither the Borrower nor any Subsidiary thereof has received any
notice of violation, alleged violation, non-compliance, liability or potential
liability regarding environmental matters, Hazardous Materials, or compliance
with Environmental Laws, nor does the Borrower or any Subsidiary thereof have
knowledge or reason to believe that any such notice will be received or is being
threatened;
(iv) Hazardous Materials have not been transported or disposed of to or
from the properties owned, leased or operated by the Borrower and its
Subsidiaries in violation of, or in a manner or to a location which could give
rise to liability under, Environmental Laws, nor have any Hazardous Materials
been generated, treated, stored or disposed of at, on or under any of such
properties in violation of, or in a manner that could give rise to liability
under, any applicable Environmental Laws;
(v) No judicial proceedings or governmental or administrative action is
pending, or, to the knowledge of the Borrower, threatened, under any
Environmental Law to which the Borrower or any Subsidiary thereof is or will be
named as a potentially responsible party with respect to such properties or
operations conducted in connection therewith, nor are there any consent decrees
or other decrees, consent orders, administrative orders or other orders, or
other administrative or judicial requirements outstanding under any
Environmental Law with respect to Borrower, any Subsidiary or such properties or
such operations; and
(vi) There has been no release, or to the best of the Borrower's
knowledge, threat of release, of Hazardous Materials at or from properties
owned, leased incoroperated by the Borrower or any Subsidiary, now or in the
past, in violation of or in amounts or in a manner that could give rise to
liability under Environmental Laws.
47
(i) ERISA.
(i) As of the Closing Date, neither the Borrower nor any ERISA Affiliate
maintains or contributes to, or has any obligation under, any Employee Benefit
Plans other than those identified on Schedule 7.1(i);
(ii) The Borrower and each ERISA Affiliate is in material compliance with
all applicable provisions of ERISA and the regulations and published
interpretations thereunder with respect to all Employee Benefit Plans except for
any required amendments for which the remedial amendment period as defined in
Section 401(b) of the Code has not yet expired and except where a failure to so
comply could not reasonably be expected to have a Material Adverse Effect. Each
Employee Benefit Plan that is intended to be qualified under Section 401(a) of
the Code has been determined by the Internal Revenue Service to be so qualified,
and each trust related to such plan has been determined to be exempt under
Section 501(a) of the Code except for such plans that have not yet received
determination letters but for which the remedial amendment period for submitting
a determination letter has not yet expired. No liability has been incurred by
the Borrower or any ERISA Affiliate which remains unsatisfied for any taxes or
penalties with respect to any Employee Benefit Plan or any Multiemployer Plan
except for a liability that could not reasonably be expected to have a Material
Adverse Effect;
(iii) As of the Closing Date, no Pension Plan has been terminated, nor has
any accumulated funding deficiency (as defined in Section 412 of the Code) been
incurred (without regard to any waiver granted under Section 412 of the Code),
nor has any funding waiver from the Internal Revenue Service been received or
requested with respect to any Pension Plan, nor has the Borrower or any ERISA
Affiliate failed to make any contributions or to pay any amounts due and owing
as required by Section 412 of the Code, Section 302 of ERISA or the terms of any
Pension Plan prior to the due dates of such contributions under Section 412 of
the Code or Section 302 of ERISA, in each case where such event could reasonably
be expected to have a Material Adverse Effect; nor has there been any event
requiring any disclosure under Section 4041(c)(3)(C) or 4063(a) of ERISA with
respect to any Pension Plan;
(iv) Except where the failure of any of the following representations to
be correct in all material respects could not reasonably be expected to have a
Material Adverse Effect, neither the Borrower nor any ERISA Affiliate has: (A)
engaged in a nonexempt prohibited transaction described in Section 406 of the
ERISA or Section 4975 of the Code, (B) incurred any liability to the PBGC which
remains outstanding other than the payment of premiums and there are no premium
payments which are due and unpaid, (C) failed to make a required contribution or
payment to a Multiemployer Plan, or (D) failed to make a required installment or
other required payment under Section 412 of the Code;
(v) No Termination Event has occurred or is reasonably expected to
occur; and
(vi) Except where the failure of any of the following representations to
be correct could not reasonably be expected to have a Material Adverse Effect,
no proceeding, claim (other than a benefits claim in the ordinary course of
business), lawsuit and/or investigation is existing or, to the best knowledge of
the Borrower after due inquiry, threatened concerning or involving any (A)
employee welfare benefit plan (as defined in Section 3(1) of ERISA) currently
maintained or contributed to by the Borrower or any ERISA Affiliate, (B) Pension
Plan or (C) Multiemployer Plan.
(j) Margin Stock. Neither the Borrower nor any Subsidiary thereof is
engaged principally or as one of its activities in the business of extending
credit for the purpose of "purchasing" or "carrying" any "margin stock" (as each
such term is defined or used, directly or indirectly, in Regulation U of the
Board of Governors of the Federal Reserve System). No part of the proceeds of
any of the Loans or Letters of Credit will be used for purchasing or carrying
margin stock or for any purpose which violates, or which would be inconsistent
with, the provisions of Regulation T, U or X of such Board of Governors.
48
(k) Government Regulation. Neither the Borrower nor any Subsidiary thereof
is an "investment company" or a company "controlled" by an "investment company"
(as each such term is defined or used in the Investment Company Act of 1940, as
amended) and neither the Borrower nor any Subsidiary thereof is, or after giving
effect to any Extension of Credit will be, subject to regulation under the
Public Utility Holding Company Act of 1935 or the Interstate Commerce Act, each
as amended, or any other Applicable Law which limits its ability to incur or
consummate the transactions contemplated hereby.
(l) Material Contracts. Schedule 7.1(l) sets forth a complete and accurate
list of all Material Contracts of the Borrower and its Subsidiaries in effect as
of the Closing Date not listed on any other Schedule hereto; other than as set
forth in Schedule 7.1(l), each such Material Contract is, and after giving
effect to the consummation of the transactions contemplated by the Loan
Documents will be, in full force and effect in accordance with the terms
thereof. The Borrower and its Subsidiaries have delivered to the Administrative
Agent a true and complete copy of each written Material Contract required to be
listed on Schedule 7.1(l) or any other Schedule hereto. Neither the Borrower nor
any Subsidiary (nor, to the knowledge of the Borrower, any other party thereto)
is in breach of or in default under any Material Contract in any material
respect.
(m) Employee Relations. Each of the Borrower and its Subsidiaries has a
stable work force in place and is not, as of the Closing Date, party to any
collective bargaining agreement nor has any labor union been recognized as the
representative of its employees. The Borrower knows of no pending, threatened or
contemplated strikes, work stoppage or other collective labor disputes involving
its employees or those of its Subsidiaries.
(n) Burdensome Provisions. Neither the Borrower nor any Subsidiary thereof
is a party to any indenture, agreement, lease or other instrument, or subject to
any corporate or partnership restriction, Governmental Approval or Applicable
Law which is so unusual or burdensome as in the foreseeable future could be
reasonably expected to have a Material Adverse Effect. The Borrower and its
Subsidiaries do not presently anticipate that future expenditures needed to meet
the provisions of any statutes, orders, rules or regulations of a Governmental
Authority will be so burdensome as to have a Material Adverse Effect. Other than
the Indenture, no Subsidiary is party to any agreement or instrument or
otherwise subject to any restriction or encumbrance that restricts or limits its
ability to make dividend payments or other distributions in respect of its
capital stock to the Borrower or any Subsidiary or to transfer any of its assets
or properties to the Borrower or any other Subsidiary in each case other than
existing under or by reason of the Loan Documents or Applicable Law.
(o) Financial Statements. The audited Consolidated balance sheet of the
Borrower and its Subsidiaries as of September 28, 2003 and the related audited
statements of income and retained earnings and cash flows for the Fiscal Year
then ended, copies of which have been furnished to the Administrative Agent and
each Lender, are complete and correct and fairly present on a Consolidated basis
the assets, liabilities and financial position of the Borrower and its
Subsidiaries as at such dates, and the results of the operations and changes of
financial position for the periods then ended (other than customary year-end
adjustments for unaudited financial statements). All such financial statements,
including the related schedules and notes thereto, have been prepared in
accordance with GAAP. The Borrower and its Subsidiaries have no Debt, obligation
or other unusual forward or long-term commitment which is not fairly reflected
in the foregoing financial statements or in the notes thereto other than Debt
incurred in the ordinary course of business subsequent to the date thereof and
disclosed in writing to the Administrative Agent.
49
(p) No Material Adverse Change. Except as publicly disclosed by the
Borrower prior to the Closing Date, since September 28, 2003, there has been no
material adverse change in the properties, business, operations, prospects, or
condition (financial or otherwise) of the Borrower and its Subsidiaries and no
event has occurred or condition arisen that could reasonably be expected to have
a Material Adverse Effect.
(q) Solvency. As of the Closing Date and after giving effect to each
Extension of Credit made hereunder, the Borrower and each of its Subsidiaries
will be Solvent.
(r) Titles to Properties. Each of the Borrower and its Subsidiaries has
such title to the real property owned or leased by it as is necessary or
desirable to the conduct of its business and valid and legal title to all of its
personal property and assets, including, but not limited to, those reflected on
the balance sheets of the Borrower and its Subsidiaries delivered pursuant to
Section 7.1(o), except those which have been disposed of by the Borrower or its
Subsidiaries subsequent to such date which dispositions have been in the
ordinary course of business or as otherwise expressly permitted hereunder.
(s) Liens. None of the properties and assets of the Borrower or any
Subsidiary thereof is subject to any Lien, except Liens permitted pursuant to
Section 11.2. Neither the Borrower nor any Subsidiary thereof has signed any
such financing statement or any security agreement authorizing any secured party
thereunder to file any such financing statement with respect to any Lien
remaining effective as of the Closing Date, except to perfect those Liens
permitted by Section 11.2.
(t) Debt and Guaranty Obligations. Schedule 7.1(t) is a complete and
correct listing of all Debt and Guaranty Obligations of the Borrower and its
Subsidiaries as of the Closing Date in excess of $2,500,000. The Borrower and
its Subsidiaries have performed and are in compliance in all material respects
with all of the terms of such Debt and Guaranty Obligations and all instruments
and agreements relating thereto, and no default or event of default, or event or
condition which with notice or lapse of time or both would constitute such a
default or event of default on the part of the Borrower or any of its
Subsidiaries exists with respect to any such Debt or Guaranty Obligation.
(u) Litigation. Except for matters existing on the Closing Date and set
forth on Schedule 7.1(u), there are no actions, suits or proceedings pending
nor, to the knowledge of the Borrower, threatened against or in any other way
relating adversely to or affecting the Borrower or any Subsidiary thereof or any
of their respective properties in any court or before any arbitrator of any kind
or before or by any Governmental Authority except for any such actions, suits or
proceedings which individually and in the aggregate could not reasonably be
expected to have a Material Adverse Effect.
(v) Absence of Defaults. No event has occurred or is continuing which
constitutes a Default or an Event of Default, or which constitutes, or which
with the passage of time or giving of notice or both would constitute, a default
or event of default by the Borrower or any Subsidiary thereof under any Material
Contract or judgment, decree or order to which the Borrower or its Subsidiaries
is a party or by which the Borrower or its Subsidiaries or any of their
respective properties may be bound or which would require the Borrower or its
Subsidiaries to make any payment thereunder prior to the scheduled maturity date
therefor.
(w) Senior Debt Status. The Obligations of the Borrower and each of its
Restricted Subsidiaries under this Agreement and each of the other Loan
Documents rank and shall continue to rank senior in priority of payment to all
Subordinated Debt of each such Person and is designated as "Senior Indebtedness"
under all instruments and documents relating to all Subordinated Debt of such
Person.
(x) Accuracy and Completeness of Information. All written information,
reports and other papers and data produced by or on behalf of the Borrower or
any Subsidiary thereof (other than financial projections, which shall be subject
to the standard set forth in Section 8.1(c)) and furnished to the Lenders were,
at the time the same were so furnished, complete and correct to the extent
necessary to give the recipient a true and accurate knowledge of the subject
matter in all material respects. No document furnished or written statement made
to the Administrative Agent or the Lenders by the Borrower or any Subsidiary
thereof in connection with the negotiation, preparation or execution of this
Agreement or any of the Loan Documents contains or will contain any untrue
statement of a fact material to the creditworthiness of the Borrower or its
Subsidiaries or omits or will omit to state a fact necessary in order to make
the statements contained therein not misleading. The Borrower is not aware of
any facts which it has not disclosed in writing to the Administrative Agent
having a Material Adverse Effect, or insofar as the Borrower can now foresee,
which could reasonably be expected to have a Material Adverse Effect.
50
SECTION 7.2 Survival of Representations and Warranties, Etc.
------------------------------------------------
All representations and warranties set forth in this Article VII and all
representations and warranties contained in any certificate, or any of the Loan
Documents (including, but not limited to, any such representation or warranty
made in or in connection with any amendment thereto) shall constitute
representations and warranties made under this Agreement. All representations
and warranties made under this Agreement shall be made or deemed to be made at
and as of the Closing Date (except those that are expressly made as of a
specific date), shall survive the Closing Date and shall not be waived by the
execution and delivery of this Agreement, any investigation made by or on behalf
of the Lenders or any borrowing hereunder.
ARTICLE VIII
FINANCIAL INFORMATION AND NOTICES
Until all the Obligations have been paid and satisfied in full and the
Commitments terminated, unless consent has been obtained in the manner set forth
in Section 14.11, the Borrower will furnish or cause to be furnished to the
Administrative Agent at the Administrative Agent's Office at the address set
forth in Section 14.1 and to the Lenders at their respective addresses as set
forth in the Register, or such other office as may be designated by the
Administrative Agent and Lenders from time to time:
SECTION 8.1 Financial Statements and Projections.
-------------------------------------
(a) Quarterly Financial Statements. As soon as practicable and in any event
within forty-five (45) days after the end of each fiscal quarter of each Fiscal
Year (or, if either such date is earlier, on the date of any required public
filing thereof, or five (5) days following any date on which the Borrower may be
required to file such statements), an unaudited Consolidated balance sheet of
the Borrower and its Subsidiaries as of the close of such fiscal quarter and
unaudited Consolidated statements of income and cash flows for the fiscal
quarter then ended and that portion of the Fiscal Year then ended, including the
notes thereto, all in reasonable detail setting forth in comparative form the
corresponding figures as of the end of and for the corresponding period in the
preceding Fiscal Year and prepared by the Borrower in accordance with GAAP and,
if applicable, containing disclosure of the effect on the financial position or
results of operations of any change in the application of accounting principles
and practices during the period, and certified by the chief financial officer of
the Borrower to present fairly in all material respects the financial condition
of the Borrower and its Subsidiaries on a Consolidated basis as of their
respective dates and the results of operations of the Borrower and its
Subsidiaries for the respective periods then ended, subject to normal year end
adjustments. (Delivery by the Borrower to the Administrative Agent and the
Lenders of the Borrower's quarterly report to the SEC on Form 10-Q with respect
to any fiscal quarter, or the availability of such quarterly report on EDGAR
Online, within the period specified above shall be deemed to be compliance by
the Borrower with this Section 8.1(a)).
(b) Annual Financial Statements. As soon as practicable and in any event
within ninety (90) days after the end of each Fiscal Year (or, if either such
date is earlier, on the date of any required public filing thereof, or five (5)
days following any date on which the Borrower may be required to file such
statements), an audited Consolidated balance sheet of the Borrower and its
Subsidiaries as of the close of such Fiscal Year and audited Consolidated
statements of income, retained earnings and cash flows for the Fiscal Year then
ended, including the notes thereto, all in reasonable detail setting forth in
comparative form the corresponding figures as of the end of and for the
preceding Fiscal Year and prepared by an independent certified public accounting
firm acceptable to the Administrative Agent in accordance with GAAP and, if
applicable, containing disclosure of the effect on the financial position or
results of operations of any change in the application of accounting principles
and practices during the year, and accompanied by a report thereon by such
certified public accountants that is not qualified with respect to scope
limitations imposed by the Borrower or any of its Subsidiaries or with respect
to accounting principles followed by the Borrower or any of its Subsidiaries not
in accordance with GAAP. (Delivery by the Borrower to the Administrative Agent
and the Lenders of the Borrower's annual report to the SEC on Form 10-K with
respect to any fiscal year, or the availability of such annual report on EDGAR
Online, within the period specified above shall be deemed to be compliance by
the Borrower with this Section 8.1(b)).
51
(c) Annual Business Plan and Financial Projections. As soon as practicable
and in any event within thirty (30) days after the beginning of each Fiscal
Year, a business plan of the Borrower and its Subsidiaries for the ensuing four
(4) fiscal quarters, such plan to be prepared in accordance with GAAP and to
include, on a quarterly basis, the following: a quarterly operating and capital
budget, a projected income statement, statement of cash flows and balance sheet
and a report containing management's assumptions with respect to such
projections, accompanied by a certificate from the chief financial officer of
the Borrower to the effect that, to the best of such officer's knowledge, such
projections are good faith estimates (utilizing reasonable assumptions) of the
financial condition and operations of the Borrower and its Subsidiaries for such
four (4) fiscal quarter period.
SECTION 8.2 Officer's Compliance Certificate.
---------------------------------
At each time financial statements are delivered pursuant to Sections 8.1
(a) or (b) and at such other times as the Administrative Agent shall reasonably
request, a certificate of the chief financial officer or the treasurer of the
Borrower in the form of Exhibit F attached hereto (an "Officer's Compliance
Certificate").
SECTION 8.3 Annual Accountants' Certificate.
--------------------------------
At each time financial statements are delivered pursuant to Section 8.1(b),
a certificate of the independent public accountants certifying such financial
statements addressed to the Administrative Agent for the benefit of the Lenders
stating that in making the examination necessary for the certification of such
financial statements, they obtained no knowledge of any Default or Event of
Default or, if such is not the case, specifying such Default or Event of Default
and its nature and period of existence.
SECTION 8.4 Other Reports.
--------------
(a) Promptly upon receipt thereof, copies of all reports, if any, submitted
to the Borrower or its Board of Directors by its independent public accountants
in connection with their auditing function, including, without limitation, any
management report and any management responses thereto; and
(b) Such other information regarding the operations, business affairs and
financial condition of the Borrower or any of its Subsidiaries as the
Administrative Agent or any Lender may reasonably request.
SECTION 8.5 Notice of Litigation and Other Matters.
---------------------------------------
Prompt (but in no event later than ten (10) days after an officer of the
Borrower obtains knowledge thereof) telephonic and written notice of:
(a) the commencement of all proceedings and investigations by or before any
Governmental Authority and all actions and proceedings in any court or before
any arbitrator against or involving the Borrower or any Subsidiary thereof or
any of their respective properties, assets or businesses, which in any such case
could reasonably be expected to have a Material Adverse Effect;
(b) any notice of any violation received by the Borrower or any Subsidiary
thereof from any Governmental Authority including, without limitation, any
notice of violation of Environmental Laws which in any such case could
reasonably be expected to have a Material Adverse Effect;
(c) any labor controversy that has resulted in, or threatens to result in,
a strike or other work action against the Borrower or any Subsidiary thereof;
(d) any attachment, judgment, lien, levy or order exceeding $1,000,000 that
may be assessed against or threatened against the Borrower or any Subsidiary
thereof;
52
(e) (i) any Default or Event of Default, (ii) the occurrence or existence
of any event or circumstance that foreseeably will become a Default or Event of
Default or (iii) any event which constitutes or which with the passage of time
or giving of notice or both would constitute a default or event of default by
the Borrower or any Subsidiary or, to the knowledge of the Borrower or any
Subsidiary, any third party, under any Material Contract to which the Borrower
or any of its Subsidiaries is a party or by which the Borrower or any Subsidiary
thereof or any of their respective properties may be bound;
(f) (i) any unfavorable determination letter from the Internal Revenue
Service regarding the qualification of an Employee Benefit Plan under Section
401(a) of the Code (along with a copy thereof), (ii) all notices received by the
Borrower or any ERISA Affiliate of the PBGC's intent to terminate any Pension
Plan or to have a trustee appointed to administer any Pension Plan, (iii) all
notices received by the Borrower or any ERISA Affiliate from a Multiemployer
Plan sponsor concerning the imposition or amount of withdrawal liability
pursuant to Section 4202 of ERISA and (iv) the Borrower obtaining knowledge or
reason to know that the Borrower or any ERISA Affiliate has filed or intends to
file a notice of intent to terminate any Pension Plan under a distress
termination within the meaning of Section 4041(c) of ERISA;
(g) any event which makes any of the representations set forth in Section
7.1 inaccurate in any respect; and
(h) any intention by the Borrower to treat any of the Extensions of Credit
and related transactions as being a "reportable transaction" (within the meaning
of Treasury Regulation Section 1.6011-4) (and the Borrower shall deliver, in
conjunction with such notification, a duly completed copy of IRS Form 8886 or
any successor form).
SECTION 8.6 Extension of Time.
------------------
Notwithstanding anything in this Agreement to the contrary, the
Administrative Agent may, in its sole discretion, extend the delivery deadline
applicable to any notice, certificate or other information required to be
delivered under this Article VIII for a period of time not to exceed five (5)
Business Days.
SECTION 8.7 Accuracy of Information.
------------------------
All written information, reports, statements and other papers and data
furnished by or on behalf of the Borrower to the Administrative Agent or any
Lender whether pursuant to this Article VIII or any other provision of this
Agreement, or any of the Security Documents, shall, at the time the same is so
furnished, comply with the representations and warranties set forth in Section
7.1(x).
ARTICLE IX
AFFIRMATIVE COVENANTS
Until all of the Obligations have been paid and satisfied in full and the
Commitments terminated, unless consent has been obtained in the manner provided
for in Section 14.11, the Borrower will, and will cause each of its Restricted
Subsidiaries to:
SECTION 9.1 Preservation of Corporate Existence and Related Matters.
--------------------------------------------------------
Except as permitted by Section 11.4, preserve and maintain its separate
corporate existence and all material rights, franchises, licenses and privileges
necessary to the conduct of its business, and qualify and remain qualified as a
foreign corporation and authorized to do business in each jurisdiction in which
the failure to so qualify could reasonably be expected to have a Material
Adverse Effect.
SECTION 9.2 Maintenance of Property.
------------------------
In addition to the requirements of any of the Security Documents, protect
and preserve all properties useful in and material to its business in accordance
with sound business practices, including copyrights, patents, trade names,
service marks and trademarks; maintain in good working order and condition in
accordance with sound business practices all buildings, equipment and other
tangible real and personal property; and from time to time make or cause to be
made all renewals, replacements and additions to such property necessary for the
conduct of its business, so that the business carried on in connection therewith
may be conducted in a commercially reasonable matter.
53
SECTION 9.3 Insurance.
----------
Maintain insurance with financially sound and reputable insurance companies
against such risks and in such amounts as are customarily maintained by similar
businesses and as may be required by Applicable Law and as are required by any
Security Documents, and on the Closing Date and from time to time thereafter
deliver to the Administrative Agent upon its request a detailed list of the
insurance then in effect, stating the names of the insurance companies, the
amounts and rates of the insurance, the dates of the expiration thereof and the
properties and risks covered thereby.
SECTION 9.4 Accounting Methods and Financial Records.
-----------------------------------------
Maintain a system of accounting, and keep such books, records and accounts
(which shall be true and complete in all material respects) as may be required
or as may be necessary to permit the preparation of financial statements in
accordance with GAAP and in compliance with the regulations of any Governmental
Authority having jurisdiction over it or any of its properties.
SECTION 9.5 Compliance With Laws and Approvals.
-----------------------------------
Observe and remain in compliance in all material respects with all
Applicable Laws and maintain in full force and effect all material Governmental
Approvals, in each case applicable to the conduct of its business.
SECTION 9.6 Environmental Laws.
-------------------
In addition to and without limiting the generality of Section 9.5, (a)
materially comply with, and ensure such material compliance by all tenants and
subtenants with all applicable Environmental Laws and obtain and comply with and
maintain, and ensure that all tenants and subtenants, if any, obtain and comply
with and maintain, any and all licenses, approvals, notifications, registrations
or permits required by applicable Environmental Laws, (b) conduct and complete
all investigations, studies, sampling and testing, and all remedial, removal and
other actions required under Environmental Laws, and promptly comply with all
lawful orders and directives of any Governmental Authority regarding
Environmental Laws, and (c) defend, indemnify and hold harmless the
Administrative Agent and the Lenders, and their respective parents,
Subsidiaries, Affiliates, employees, agents, officers and directors, from and
against any claims, demands, penalties, fines, liabilities, settlements,
damages, costs and expenses of whatever kind or nature known or unknown,
contingent or otherwise, arising out of, or in any way relating to the presence
of Hazardous Materials, or the violation of, noncompliance with or liability
under any Environmental Laws applicable to the operations of the Borrower or any
such Restricted Subsidiary, or any orders, requirements or demands of
Governmental Authorities related thereto, including, without limitation,
reasonable attorney's and consultant's fees, investigation and laboratory fees,
response costs, court costs and litigation expenses, except to the extent that
any of the foregoing directly result from the gross negligence or willful
misconduct of the party seeking indemnification therefor.
SECTION 9.7 Compliance with ERISA.
----------------------
In addition to and without limiting the generality of Section 9.5, (a)
except where the failure to so comply could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect, (i) comply
with all material applicable provisions of ERISA and the regulations and
published interpretations thereunder with respect to all Employee Benefit Plans,
(ii) not take any action or fail to take action the result of which could be a
liability to the PBGC or to a Multiemployer Plan, (iii) not participate in any
prohibited transaction that could result in any civil penalty under ERISA or tax
under the Code and (iv) operate each Employee Benefit Plan in such a manner that
will not incur any tax liability under Section 4980B of the Code or any
liability to any qualified beneficiary as defined in Section 4980B of the Code
and (b) furnish to the Administrative Agent upon the Administrative Agent's
request such additional information about any Employee Benefit Plan as may be
reasonably requested by the Administrative Agent.
54
SECTION 9.8 Visits and Inspections.
-----------------------
Permit representatives of the Administrative Agent or any Lender, from time
to time, to visit and inspect its properties; inspect, audit and make extracts
from its books, records and files, including, but not limited to, management
letters prepared by independent accountants; and discuss with its principal
officers, and its independent accountants, its business, assets, liabilities,
financial condition, results of operations and business prospects.
SECTION 9.9 Additional Subsidiaries.
------------------------
(a) Additional Domestic Subsidiary. Notify the Administrative Agent of (i)
the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary in
accordance with Section 9.9(c) below or (ii) the creation or acquisition of any
Domestic Subsidiary, and (unless such Domestic Subsidiary has been designated as
an Unrestricted Subsidiary pursuant to Section 9.9(d)) promptly thereafter (and
in any event within thirty (30) days), cause such Person to (A) become a
Guarantor by executing and delivering to the Administrative Agent a counterpart
of the Guaranty Agreement or such other document as the Administrative Agent
shall deem appropriate for such purpose, (B) deliver to the Administrative Agent
a duly executed Joinder Agreement and comply with the terms of each Security
Document, (C) deliver to the Administrative Agent documents of the types
referred to in clauses (ii) and (iii) of Section 6.2(b) and (D) deliver to the
Administrative Agent such other documents and closing certificates (and
including, without limitation, opinions of counsel to such Person) as may be
reasonably requested by the Administrative Agent, all in form, content and scope
reasonably satisfactory to the Administrative Agent; provided, further, that for
purposes of this provision, the Permitted Target will be deemed to have been
acquired by Borrower on the Closing Date.
(b) Additional Foreign Subsidiaries. Notify the Administrative Agent at the
time that any Person becomes a first tier Foreign Subsidiary of the Borrower or
any Restricted Subsidiary, and at the request of the Administrative Agent,
promptly thereafter (and in any event within forty-five (45) days after such
request), cause (i) the Borrower or applicable Restricted Subsidiary to deliver
to the Administrative Agent a supplement to the Security Documents pledging
sixty-five percent (65%) of the total outstanding ownership interest or capital
stock of such new Foreign Subsidiary and a consent thereto executed by such new
Foreign Subsidiary (including, without limitation, if applicable, original stock
certificates (or the equivalent thereof pursuant to the Applicable Laws and
practices of any relevant foreign jurisdiction) evidencing the ownership
interest or capital stock of such new Foreign Subsidiary, together with an
appropriate undated stock power for each certificate duly executed in blank by
the registered owner thereof), (ii) such Person to deliver to the Administrative
Agent documents of the types referred to in clauses (ii) and (iii) of Section
6.2(b) and (iii) such Person to deliver to the Administrative Agent such other
documents and closing certificates (and including, without limitation, opinions
of counsel to such Person) as may be reasonably requested by the Administrative
Agent, all in form, content and scope reasonably satisfactory to the
Administrative Agent.
(c) Redesignation of Unrestricted Subsidiaries. At any time upon written
notice to the Administrative Agent, redesignate an Unrestricted Subsidiary as a
Restricted Subsidiary. Further, promptly after the date on which the Borrower or
the Administrative Agent determines that either (i) any Unrestricted Subsidiary
and its Subsidiaries individually represent two and one half percent (2.5%) or
more of (A) the Consolidated EBITDA of the Borrower and its Subsidiaries
(notwithstanding any definition thereof, calculated to include all Unrestricted
Subsidiaries) for the four (4) consecutive fiscal quarters most recently ended
prior to such date or (B) the Consolidated assets of the Borrower and its
Subsidiaries (notwithstanding any definition thereof, calculated to include all
Unrestricted Subsidiaries) as of the most recently ended fiscal quarter prior to
such date or (ii) all Unrestricted Subsidiaries and their respective
Subsidiaries collectively represent in the aggregate five percent (5%) or more
of (A) the Consolidated EBITDA of the Borrower and its Subsidiaries
(notwithstanding any definition thereof, calculated to include all Unrestricted
Subsidiaries) for the four (4) consecutive fiscal quarters most recently ended
prior to such date or (B) the Consolidated assets of the Borrower and its
Subsidiaries (notwithstanding any definition thereof, calculated to include all
Unrestricted Subsidiaries) as of the most recently ended fiscal quarter prior to
such date, then the Borrower shall promptly identify in writing to the
55
Administrative Agent such Unrestricted Subsidiaries to be redesignated as
Restricted Subsidiaries to cause such remaining Unrestricted Subsidiaries and
their Subsidiaries (after giving effect to such redesignation) to individually
represent less than two and one half percent (2.5%) of each of the Consolidated
EBITDA of the Borrower and its Subsidiaries (notwithstanding any definition
thereof, calculated to include all Unrestricted Subsidiaries) for the four (4)
consecutive fiscal quarters most recently ended prior to such date and the
Consolidated assets of the Borrower and its Subsidiaries (notwithstanding any
definition thereof, calculated to include all Unrestricted Subsidiaries) as of
the most recently ended fiscal quarter prior to such date and collectively
represent in the aggregate less than five percent (5%) of each of the
Consolidated EBITDA of the Borrower and its Subsidiaries (notwithstanding any
definition thereof, calculated to include all Unrestricted Subsidiaries) for the
four (4) consecutive fiscal quarters most recently ended prior to such date and
the Consolidated assets of the Borrower and its Subsidiaries (notwithstanding
any definition thereof, calculated to include all Unrestricted Subsidiaries) as
of the most recently ended fiscal quarter prior to such date.
(d) Designation of Restricted Subsidiaries. So long as no Default or Event
of Default has occurred and is continuing, on prior written notice to the
Administrative Agent, redesignate any Restricted Subsidiary as an Unrestricted
Subsidiary (or designate any newly formed or acquired Subsidiary as an
Unrestricted Subsidiary; provided that such formation or acquisition is
otherwise permitted hereunder), so long as the Administrative Agent reasonably
determines that at the time of such proposed designation (or redesignation, as
applicable), and after giving effect thereto, the Unrestricted Subsidiaries and
their respective Subsidiaries (including the Subsidiary and its respective
Subsidiaries to be designated or redesignated, as applicable, as an Unrestricted
Subsidiary) (i) individually represent less than two and one half percent (2.5%)
of each of (A) the Consolidated EBITDA of the Borrower and its Subsidiaries
(notwithstanding any definition thereof, calculated to include all Unrestricted
Subsidiaries) for the four (4) consecutive fiscal quarters most recently ended
prior to such date and (B) the Consolidated assets of the Borrower and its
Subsidiaries (notwithstanding any definition thereof, calculated to include all
Unrestricted Subsidiaries) as of the most recently ended fiscal quarter prior to
such date and (ii) collectively represent in the aggregate less than five
percent (5%) of each of (A) the Consolidated EBITDA of the Borrower and its
Subsidiaries (notwithstanding any definition thereof, calculated to include all
Unrestricted Subsidiaries) for the four (4) consecutive fiscal quarters most
recently ended prior to such date and (B) the Consolidated assets of the
Borrower and its Subsidiaries (notwithstanding any definition thereof,
calculated to include all Unrestricted Subsidiaries) as of the most recently
ended fiscal quarter prior to such date. Such designation (or redesignation, as
applicable) shall have an effective date mutually acceptable to the
Administrative Agent and Borrower, but in no event earlier than five (5)
Business Days following receipt by the Administrative Agent of such written
notice.
(e) Additional Collateral. Notify the Administrative Agent, within ten (10)
days after the occurrence thereof, of the acquisition of any property by the
Borrower or any Restricted Subsidiary that is of the same type and character of
the Collateral subject to any Security Document, but that is not subject to the
existing Security Documents (taking into account any after-acquired property
provisions thereof), any Person's becoming a Subsidiary and any other event or
condition that may require additional action of any nature in order to preserve
the effectiveness and perfected status of the liens and security interests of
the Administrative Agent and the Lenders with respect to such property pursuant
to the Security Documents.
SECTION 9.10 Use of Proceeds.
----------------
(a) Use of Term Loan Proceeds.Use the proceeds of the Term Loans (i) to
refinance the Existing Term Loans and (ii) to redeem in full and terminate the
Senior Subordinated Notes
(b) Use of Revolving Credit Loan Proceeds. Use the proceeds of any
Revolving Credit Loans, including, without limitation, any Swingline Loans and
any Letters of Credit, for working capital and general corporate requirements of
the Borrower and its Restricted Subsidiaries, including the payment of certain
fees and expenses incurred in connection with the transactions, Capital
Expenditures in the ordinary course of business and Permitted Acquisitions.
56
SECTION 9.11 Real Property Collateral.
-------------------------
Within seventy-five (75) days after the date of a Ratings Downgrade the
Borrower shall deliver to the Administrative Agent, executed originals of the
Mortgages with respect to all of its owned properties other than those set forth
on Schedule 9.11 in form and substance acceptable to the Administrative Agent
and all Mortgage Related Documents.
SECTION 9.12 Further Assurances.
-------------------
Make, execute and deliver all such additional and further acts, things,
deeds and instruments as the Administrative Agent or the Required Lenders
(through the Administrative Agent) may reasonably require to document and
consummate the transactions contemplated hereby and to vest completely in and
insure the Administrative Agent and the Lenders their respective rights under
this Agreement, the Notes, the Letters of Credit and the other Loan Documents.
ARTICLE X
FINANCIAL COVENANTS
Until all of the Obligations have been paid and satisfied in full and the
Commitments terminated, unless consent has been obtained in the manner set forth
in Section 14.11, the Borrower and its Restricted Subsidiaries on a Consolidated
basis will not:
SECTION 10.1 Maximum Leverage Ratio.
-----------------------
As of any fiscal quarter end, permit the ratio of (a) Funded Debt on such
date to (b) EBITDA for the four (4) consecutive fiscal quarter period ending on
or immediately prior to such date (such ratio, the "Leverage Ratio") to be
greater than the corresponding ratio set forth below:
Period Maximum Ratio
------ -------------
Closing Date through October 1, 2006 2.00 to 1.00
Thereafter 1.80 to 1.00
SECTION 10.2 Minimum Fixed Charge Coverage Ratio.
------------------------------------
As of any fiscal quarter end, permit the ratio of (a) the sum of (i)
EBITDAR for the four (4) consecutive fiscal quarter period ending on or
immediately prior to such date less (ii) maintenance Capital Expenditures for
the four (4) consecutive fiscal quarter period ending on or immediately prior to
such date to (b) the sum of (i) Rental Expense for the four (4) consecutive
fiscal quarter period ending on or immediately prior to such date plus (ii)
Interest Expense for the four (4) consecutive fiscal quarter period ending on or
immediately prior to such date plus (iii) the sum of all scheduled principal
payments made in respect of the Term Loan Facility pursuant to Section 4.3 for
the four (4) consecutive fiscal quarter period ending on or immediately prior to
such date to be less than the corresponding ratio set forth below:
Closing Date through October 1, 2006 1.35 to 1.00
October 2, 2006 through September 27, 2009 1.50 to 1.00
Thereafter 1.35 to 1.00
57
SECTION 10.3 Maximum Adjusted Debt to EBITDAR.
---------------------------------
As of the end of any fiscal quarter, permit the ratio of (a) Adjusted Debt
as of such date to (b) EBITDAR for the four (4) consecutive fiscal quarter
period ending on or immediately prior to such date to be greater than the
corresponding ratio set forth below:
Period Maximum Ratio
------ -------------
Closing Date through October 3, 2004 5.20 to 1.00
October 4, 2004 through October 2, 2005 5.00 to 1.00
October 3, 2005 through October 1, 2006 4.80 to 1.00
October 2, 2006 through September 30, 2007 4.60 to 1.00
October 1, 2007 through September 28, 2008 4.40 to 1.00
September 29, 2008 through September 27, 2009 4.20 to 1.00
Thereafter 4.00 to 1.00
SECTION 10.4 Minimum Tangible Net Worth.
---------------------------
At any time, permit Tangible Net Worth to be less than the sum of (a) an
amount equal to eighty-five percent (85%) of the Consolidated shareholders'
equity as of January 19, 2003 less any intangible assets as of January 19, 2003
(including, without limitation, on a pro forma basis, intangible assets related
to the acquisition by the Borrower of Qdoba Restaurant Corporation) plus (b) an
amount equal to fifty percent (50%) of the Consolidated Net Income earned in
each fiscal quarter ending after January 19, 2003 (with no deduction for a net
loss in any such fiscal quarter), plus (c) an amount equal to fifty percent
(50%) of the aggregate increases in Consolidated shareholders' equity of the
Borrower and its Subsidiaries after the Closing Date by reason of the issuance
and sale of capital stock or other equity interests of the Borrower or any
Subsidiary (other than issuances to the Borrower or a Wholly-Owned Subsidiary),
including upon any conversion of debt securities of the Borrower into such
capital stock or other equity interests.
58
SECTION 10.5 Maximum Capital Expenditures.
-----------------------------
Permit the aggregate amount of all Capital Expenditures less Capital
Expenditures related to Permitted Sale-Leaseback Transactions in any Fiscal Year
to exceed the corresponding maximum amount set forth below:
Fiscal Year Maximum Amount
2003 $142,000,000
2004 $152,600,000
2005 $313,500,000
2006 $320,600,000
2007 $341,900,000
2008 $186,000,000
2009 $172,900,000
2010 $172,100,000
2011 $167,000,000
Notwithstanding the foregoing, any unused Capital Expenditure allowance
with respect to any Fiscal Year may be carried over to the immediately following
Fiscal Year, on a non-cumulative basis; provided, that the amount carried over
from any Fiscal Year shall in no event exceed five percent (5%) of the maximum
Capital Expenditure allowance for such Fiscal Year.
ARTICLE XI
NEGATIVE COVENANTS
Until all of the Obligations have been paid and satisfied in full and the
Commitments terminated, unless consent has been obtained in the manner set forth
in Section 14.11, the Borrower has not and will not and will not permit any of
its Restricted Subsidiaries to:
SECTION 11.1 Limitations on Debt.
--------------------
Create, incur, assume or suffer to exist any Debt except:
(a) the Obligations (excluding Hedging Obligations permitted pursuant to
Section 11.1(b));
(b) Debt incurred in connection with a Hedging Agreement (i) with a
counterparty and upon terms and conditions (including interest rate) reasonably
satisfactory to the Administrative Agent or (ii) described on Schedule 11.1(b);
provided, that any counterparty that is a Lender shall be deemed satisfactory to
the Administrative Agent.
(c) Debt existing on the Closing Date and not otherwise permitted under
this Section 11.1, as set forth on Schedule 11.1(c), and the renewal,
refinancing, extension and replacement (but not the increase in the aggregate
principal amount) thereof;
(d) Debt of the Borrower and its Restricted Subsidiaries incurred in
connection with Capital Leases in an aggregate amount not to exceed $25,000,000
on any date of determination;
(e) purchase money Debt of the Borrower and its Restricted Subsidiaries in
an aggregate amount not to exceed $5,000,000 on any date of determination;
(f) Subordinated Debt; provided that in the case of each issuance of
Subordinated Debt, (i) no Default or Event of Default shall have occurred and be
continuing or would be caused by the issuance of such Subordinated Debt, (ii)
the Administrative Agent shall have received satisfactory written evidence that
the Borrower would be in compliance with all covenants contained in this
Agreement on a pro forma basis after giving effect to the issuance of any such
Subordinated Debt and (iii) the Borrower shall have complied with the
requirements of Section 4.4(b)(ii);
(g) unsecured Debt of the Borrower and its Restricted Subsidiaries not
otherwise permitted pursuant to this Section 11.1 in an aggregate principal
amount not to exceed $25,000,000 at any time; provided that, in each case, the
Borrower or such Restricted Subsidiary shall have complied with the requirements
of Section 4.4(b)(i);
59
(h) Guaranty Obligations in favor of the Administrative Agent for the
benefit of the Administrative Agent and the Lenders; and
(i) Debt owed by any Restricted Subsidiary to the Borrower, by the Borrower
to any Restricted Subsidiary, or by any Restricted Subsidiary to another
Restricted Subsidiary;
(j) Guaranty Obligations incurred by Borrower with respect to Debt of any
Restricted Subsidiary;
(k) Debt consisting of Capital Leases entered into pursuant to Permitted
Sale-Leaseback Transactions;
(l) Guaranty Obligations with respect to (i) the Permitted Franchisee
Financing Program and (ii) other Debt permitted pursuant to subsections (a)
through (g) of this Section 11.1, all in an aggregate amount not to exceed
$50,000,000 at any time;
(m) Indorsement of negotiable instruments for deposit or collection or
similar transactions in the ordinary course of business; surety bonds and appeal
bonds required in the ordinary course of business or in connection with the
enforcement of rights or claims of the Borrower or any Restricted Subsidiary or
in connection with judgments that do not result in a Default or Event of
Default; and
(n) Debt incurred solely in connection with financing the Innovation Center
in an aggregate principal amount not to exceed $25,000,000; provided, that no
agreement or instrument with respect to Debt permitted to be incurred by this
Section (other than the Indenture) shall restrict, limit or otherwise encumber
(by covenant or otherwise) the ability of any Subsidiary of the Borrower to make
any payment to the Borrower or any of its Subsidiaries (in the form of
dividends, intercompany advances or otherwise) for the purpose of enabling the
Borrower to pay the Obligations and further provided, that in no event shall the
Borrower or any of its Subsidiaries incur, assume or suffer to exist any
Guaranty Obligations with respect to indebtedness obligations of any
Unrestricted Subsidiary.
SECTION 11.2 Limitations on Liens.
---------------------
Create, incur, assume or suffer to exist, any Lien on or with respect to
any of its assets or properties (including, without limitation, shares of
capital stock or other ownership interests), real or personal, whether now owned
or hereafter acquired, except:
(a) Liens for taxes, assessments and other governmental charges or levies
not yet due or as to which the period of grace (not to exceed thirty (30) days),
if any, related thereto has not expired or which are being contested in good
faith and by appropriate proceedings if adequate reserves are maintained to the
extent required by GAAP;
(b) Liens imposed by law, including Liens arising with respect to the
claims of materialmen, mechanics, carriers, warehousemen, processors or
landlords for labor, materials, supplies or rentals and other similar Liens
incurred in the ordinary course of business, (i) securing obligations which are
not overdue for a period of more than thirty (30) days or (ii) which are being
contested in good faith and by appropriate proceedings;
(c) Liens consisting of deposits or pledges made in the ordinary course of
business in connection with, or to secure payment of, obligations under workers'
compensation, unemployment insurance or similar legislation, or to secure the
performance of bids, trade contracts, leases, statutory obligations, surety and
appeal bonds, performance bonds and other obligations of a like nature incurred
in the ordinary course of business;
(d) Liens constituting encumbrances in the nature of zoning restrictions,
easements and rights or restrictions of record on the use of real property,
which in the aggregate are not substantial in amount and which do not, in any
case, detract from the value of such property or impair the use thereof in the
ordinary conduct of business;
60
(e) Attachment or judgment Liens not giving rise to an Event of Default;
(f) Leases or subleases granted to others not interfering with the ordinary
conduct of business of the Borrower or any of its Restricted Subsidiaries;
(g) Liens in favor of a trustee in an indenture relating to the Borrower's
public Debt to the extent such Liens secure only customary compensation and
reimbursement obligations of such trustee under such indenture;
(h) Liens of the Administrative Agent for the benefit of the Administrative
Agent and the Lenders;
(i) Liens not otherwise permitted by this Section 11.2 and in existence on
the Closing Date and described on Schedule 11.2;
(j) Liens for notice purposes only arising in connection with Permitted
Sale-Leaseback Transactions; provided that, with respect to each Permitted
Sale-Leaseback Transaction, such notice Liens extend only to the property
subject to such Permitted Sale-Leaseback Transaction;
(k) Liens securing Debt permitted under Sections 11.1(d) and (e); provided
that (i) such Liens shall be created substantially simultaneously with the
acquisition or lease of the related asset or refinance of such Debt, and (ii)
such Liens do not at any time encumber any property other than the property
financed by such Debt;
(l) non-exclusive licenses of intellectual property granted in the ordinary
course of business;
(m) a mortgage Lien solely upon the real property and improvements
constructed thereon comprising the Innovation Center securing Debt permitted
under Section 11.1(n); and
(n) other Liens not otherwise permitted by this Section 11.2 in an
aggregate amount not to exceed $2,000,000 at any time.
SECTION 11.3 Limitations on Loans, Advances, Investments and Acquisitions.
-------------------------------------------------------------
Purchase, own, invest in or otherwise acquire, directly or indirectly, any
capital stock, interests in any partnership or joint venture (including, without
limitation, the creation or capitalization of any Restricted Subsidiary),
evidence of Debt (other than Guaranty Obligations permitted pursuant to Section
11.1) or other obligation or security, substantially all or a portion of the
business or assets of any other Person or any other investment or interest
whatsoever in any other Person, or make or permit to exist, directly or
indirectly, any loans, advances or extensions of credit to, or any investment in
cash or by delivery of property in, any Person except:
(a) investments (i) in Subsidiaries made prior to the Closing Date, (ii) in
Restricted Subsidiaries formed or acquired after the Closing Date so long as the
Borrower and its Subsidiaries comply with the applicable provisions of Section
9.9 and (iii) the other loans, advances and investments made prior to the
Closing Date described on Schedule 11.3;
(b) investments in (i) marketable direct obligations issued or
unconditionally guaranteed by the United States of America or any agency thereof
maturing within ninety (90) days from the date of acquisition thereof, (ii)
commercial paper (A) maturing no more than ninety (90) days from the date of
creation thereof and currently having a rating of at least A-2 from Standard &
Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc. or P-2
from Moody's Investors Service, Inc. or (B) maturing no more than one (1) year
from the date of creation thereof and currently having a rating of at least A-1
from Standard & Poor's Ratings Services, a division of The McGraw-Hill
Companies, Inc. or P-1 from Moody's Investors Service, Inc., (iii) certificates
of deposit maturing no more than one hundred twenty (120) days from the date of
creation thereof issued by commercial banks incorporated under the laws of the
United States of America, each having combined capital, surplus and undivided
profits of not less than $500,000,000 and having a rating of "A" or better by a
nationally recognized rating agency; provided, that the aggregate amount
invested in such certificates of deposit shall not at any time exceed $5,000,000
for any one such certificate of deposit and $10,000,000 for any one such bank,
or (iv) time deposits maturing no more than thirty (30) days from the date of
creation thereof with commercial banks or savings banks or savings and loan
associations each having membership either in the FDIC or the deposits of which
are insured by the FDIC and in amounts not exceeding the maximum amounts of
insurance thereunder;
61
(c) Hedging Agreements permitted pursuant to Section 11.1 and any commodity
swap or other agreement or arrangement related to commodity prices;
(d) purchases of assets in the ordinary course of business;
(e) investments in franchisees of the Borrower not to exceed $50,000,000 in
the aggregate at any time;
(f) loans and advances to officers and employees of the Borrower and its
Subsidiaries in the ordinary course of the business of the Borrower and its
Subsidiaries as presently conducted in an aggregate principal amount not to
exceed $2,000,000 at any time outstanding;
(g) other non-speculative investments of the Borrower and its Restricted
Subsidiaries not otherwise permitted pursuant to this Section 11.3 not to exceed
$25,000,000 in the aggregate at any time;
(h) investments pursuant to the Permitted Franchisee Financing Program in
an amount not to exceed $5,000,000 at any time outstanding; and
(i) investments by the Borrower or any of its Restricted Subsidiaries in
the form of acquisitions of all or substantially all of the business or a line
of business (whether by the acquisition of capital stock, assets or any
combination thereof) of any other Person if the Borrower and its Restricted
Subsidiaries promptly comply with Section 9.9 hereof (each, a "Permitted
Acquisition"); provided that:
(i) the Person to be acquired shall be a going concern, engaged in a
business, or the assets to be acquired shall be used in a business, similar or
complimentary to the line of business of the Borrower and its Subsidiaries, and
such acquisition shall have been approved by the board of directors or
equivalent governing body (or the shareholders) of the seller and/or the Person
to be acquired;
(ii) the Borrower or its Restricted Subsidiary, as applicable, shall be
the surviving Person and no Change in Control shall have been effected thereby;
(iii) the Borrower or its Restricted Subsidiary, as applicable, is in
compliance with the covenants contained in Article X after giving effect to such
acquisition;
(iv) no Default or Event of Default shall have occurred and be continuing
both before and after giving effect to the acquisition;
(v) the Borrower shall demonstrate, to the reasonable satisfaction of
the Administrative Agent pro forma compliance with the covenants contained in
Article X;
(vi) the Borrower shall deliver written notice of such proposed
acquisition to the Administrative Agent, which notice shall include the proposed
closing date of the acquisition, not less than ten (10) Business Days prior
to such proposed closing date;
(vii) to the extent requested by the Administrative Agent, the Borrower
shall deliver to the Administrative Agent copies of (A) the Permitted
Acquisition Documents and (B) the Permitted Acquisition Diligence Information
within a reasonable period of time before or after the proposed closing date of
such acquisition;
(viii) the Borrower shall obtain the prior written consent of the Required
Lenders prior to the consummation of any acquisition, or series of related
acquisitions, if the aggregate total consideration to be paid in connection with
such proposed acquisition or series of related acquisitions would exceed
$25,000,000 in the aggregate during the term of the Credit Facility from and
after the Closing Date; and
(ix) investments by the Borrower of the Blocked Term Loan Proceeds in
such investments as shall be acceptable to the Administrative Agent in its sole
discretion.
62
SECTION 11.4 Limitations on Mergers and Liquidation.
---------------------------------------
Merge, consolidate or enter into any similar combination with any other
Person or liquidate, wind-up or dissolve itself (or suffer any liquidation or
dissolution) except:
(a) any Wholly-Owned Subsidiary of the Borrower may merge with the Borrower
or any other Wholly-Owned Restricted Subsidiary of the Borrower; provided that
(i) in any merger involving the Borrower, the Borrower shall be the surviving
entity and (ii) in any merger involving a Restricted Subsidiary, the Restricted
Subsidiary shall be the surviving entity;
(b) any Wholly-Owned Subsidiary of the Borrower may merge into the Person
such Wholly-Owned Subsidiary was formed to acquire in connection with an
acquisition permitted by Section 11.3(i) (and, in the case of any merger
involving a Restricted Subsidiary, such Person is or becomes a Restricted
Subsidiary); and
(c) any Wholly-Owned Subsidiary of the Borrower may wind-up into the
Borrower or any other Wholly-Owned Restricted Subsidiary of the Borrower.
SECTION 11.5 Limitations on Sale of Assets.
------------------------------
Convey, sell, lease, assign, transfer or otherwise dispose of any of its
property, business or assets (including, without limitation, the sale of any
receivables and leasehold interests and any sale-leaseback or similar
transaction), whether now owned or hereafter acquired except:
(a) the sale of (i) inventory and (ii) equipment acquired after the Closing
Date and sold to franchisees, all in the ordinary course of business;
(b) the sale of any property or assets (i) pursuant to a Permitted
Sale-Leaseback Transaction or (ii) that are existing restaurant units not owned
by the Borrower or any Restricted Subsidiary on the Closing Date;
(c) the sale of obsolete assets no longer used or usable in the business of
the Borrower or any of its Subsidiaries;
(d) the transfer of assets to the Borrower or any Wholly-Owned Subsidiary
of the Borrower pursuant to Section 11.4(c);
(e) the sale or discount without recourse of accounts receivable arising in
the ordinary course of business in connection with the compromise or collection
thereof;
(f) the disposition of any Hedging Agreement or any commodity swap or other
agreement or arrangement related to commodity prices;
(g) the sale of restaurant units owned by the Borrower or any Restricted
Subsidiary to franchisees not to exceed (i) during the period of Fiscal Year
2004 through 2008 inclusive up to 100 restaurant units during any Fiscal Year
but not more than 350 restaurant units in the aggregate during such period, and
(ii) during Fiscal Year 2009 and thereafter, up to 200 restaurant units during
any Fiscal year; and
(h) the sale or other disposition of assets by the Borrower or any
Restricted Subsidiary not otherwise permitted under this Section 11.5; provided
that (i) as of the time of such sale or other disposition no Default or Event of
Default shall be continuing or would result therefrom, (ii) any such sale shall
be for fair value for cash consideration only, and (iii) the Borrower shall have
complied with the requirements of Section 4.4(b).
SECTION 11.6 Limitations on Dividends and Distributions.
-------------------------------------------
Declare or pay any dividends upon any of its capital stock or other equity
interests; purchase, redeem, retire or otherwise acquire, directly or
indirectly, any shares of its capital stock or other equity interests, or make
any distribution of cash, property or assets among the holders of shares of its
capital stock or other equity interests (all such payments or other
distributions, "Distributions"), or make any change in its capital structure
which such change in its capital structure could reasonably be expected to have
a Material Adverse Effect; provided that:
(a) the Borrower or any Restricted Subsidiary may pay dividends in shares
of its own capital stock;
63
(b) the Borrower may acquire capital stock of the Borrower, provided that
(i) the aggregate purchase price for all such capital stock acquired on or after
the Closing Date shall not exceed $15,000,000 in the aggregate and (ii)
immediately after any such acquisition, the Borrower would not be in Default
under this Agreement;
(c) the Borrower or any Restricted Subsidiary may make Distributions of up
to $35,000,000 in aggregate of the Net Cash Proceeds (after giving effect to any
prepayment required by Section 4.4(b)(ii)) of any issuance of Subordinated Debt
by the Borrower or any Restricted Subsidiary; and
(d) any Restricted Subsidiary may pay cash dividends to the Borrower or any
other Restricted Subsidiary.
SECTION 11.7 Limitations on Exchange and Issuance of Capital Stock.
------------------------------------------------------
Issue, sell or otherwise dispose of any class or series of capital stock
that, by its terms or by the terms of any security into which it is convertible
or exchangeable, is, or upon the happening of an event or passage of time would
be, (a) convertible or exchangeable into Debt or (b) required to be redeemed or
repurchased, including at the option of the holder, in whole or in part, or has,
or upon the happening of an event or passage of time would have, a redemption or
similar payment due.
SECTION 11.8 Transactions with Affiliates.
-----------------------------
Except for transactions permitted by 11.3, 11.6 and 11.7, directly or
indirectly (a) make any loan or advance to, or purchase or assume any note or
other obligation to or from, any of its officers, directors, shareholders or
other Affiliates, or to or from any member of the immediate family of any of its
officers, directors, shareholders or other Affiliates, or subcontract any
operations to any of its Affiliates or (b) enter into, or be a party to, any
other transaction not described in clause (a) above with any of its Affiliates,
except pursuant to the reasonable requirements of its business and upon fair and
reasonable terms that are no less favorable to it than it would obtain in a
comparable arm's length transaction with a Person not its Affiliate.
SECTION 11.9 Certain Accounting Changes; Organizational Documents.
-----------------------------------------------------
(a) Change its Fiscal Year end, or make any change in its accounting
treatment and reporting practices except as required by GAAP or (b) amend,
modify or change its articles of incorporation (or corporate charter or other
similar organizational documents) in any manner adverse in any respect to the
rights or interests of the Lenders or amend, modify or change its bylaws (or
other similar documents) in any manner adverse in any respect to the rights or
interests of the Lenders.
SECTION 11.10 Amendments; Payments and Prepayments of Subordinated Debt.
----------------------------------------------------------
Amend or modify (or permit the modification or amendment of) any of the
terms or provisions of any Subordinated Debt, or cancel or forgive, make any
voluntary or optional payment or prepayment on, or redeem or acquire for value
(including, without limitation, by way of depositing with any trustee with
respect thereto money or securities before due for the purpose of paying when
due) any Subordinated Debt other than the Senior Subordinated Notes.
SECTION 11.11 Restrictive Agreements.
-----------------------
(a) Enter into any Debt (other than the Obligations) (i) which contains any
negative pledge on assets prohibiting any Liens hereunder or, with respect to
Debt in excess of $5,000,000, covenants more restrictive than the provisions of
Articles IX, X and XI hereof, or (ii) which restricts, limits or otherwise
encumbers its ability to incur Liens hereunder.
(b) Enter into or permit to exist any agreement (other than the Indenture)
which impairs or limits the ability of any Restricted Subsidiary of the Borrower
to pay dividends to the Borrower.
SECTION 11.12 Nature of Business.
-------------------
Substantively alter in any material respect the character or conduct of the
business conducted by the Borrower and its Restricted Subsidiaries as of the
Closing Date.
64
SECTION 11.13 Impairment of Security Interests.
---------------------------------
Take or omit to take any action, which could have the result of materially
impairing the security interests in favor of the Administrative Agent with
respect to the Collateral or grant to any Person (other than the Administrative
Agent for the benefit of itself and the Lenders pursuant to the Security
Documents) any ownership or security interest whatsoever in the Collateral,
except for Liens permitted under Section 11.2 and asset sales permitted under
Section 11.5.
ARTICLE XII
DEFAULT AND REMEDIES
SECTION 12.1 Events of Default.
------------------
Each of the following shall constitute an Event of Default, whatever the
reason for such event and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment or order of any court
or any order, rule or regulation of any Governmental Authority or otherwise:
(a) Default in Payment of Principal of Loans and Reimbursement Obligations.
The Borrower shall default in any payment of principal of any Loan, Note or
Reimbursement Obligation when and as due (whether at maturity, by reason of
acceleration or otherwise).
(b) Other Payment Default. The Borrower shall default in the payment when
and as due (whether at maturity, by reason of acceleration or otherwise) of
interest on any Loan, Note or Reimbursement Obligation or the payment of any
other Obligation, and such default shall continue for a period of three (3)
Business Days.
(c) Misrepresentation. Any representation, warranty, certification or
statement of fact made or deemed made by or on behalf of the Borrower or any
Subsidiary under this Agreement, any other Loan Document or in any document
delivered in connection herewith or therewith that is subject to materiality or
Material Adverse Effect qualifications, shall be incorrect or misleading in any
respect when made or deemed made, or any representation, warranty, certification
or statement of fact made or deemed made by or on behalf of the Borrower or any
Subsidiary under this Agreement, any other Loan Document, or in any document
delivered in connection herewith or therewith that is not subject to materiality
or Material Adverse Effect qualifications, shall be incorrect or misleading in
any material respect when made or deemed made.
(d) Default in Performance of Certain Covenants. The Borrower shall default
in the performance or observance of any covenant or agreement contained in
Sections 8.1, 8.2, 8.5(e)(i), 9.10, 9.11, 9.12 or 9.13 or Articles X or XI of
this Agreement (subject in the case of Sections 8.1, 8.2 and 8.5(e)(i) to the
provisions of Section 8.6).
(e) Default in Performance of Other Covenants and Conditions. The Borrower
or any Subsidiary thereof shall default in the performance or observance of any
term, covenant, condition or agreement contained in this Agreement (other than
as specifically provided for otherwise in this Section 12.1) or any other Loan
Document and such default shall continue for a period of thirty (30) days after
written notice thereof has been given to the Borrower by the Administrative
Agent.
(f) Debt Cross-Default. The Borrower or any of its Subsidiaries shall (i)
default in the payment of any Debt (other than the Notes or any Reimbursement
Obligation) the aggregate outstanding amount of which Debt is in excess of
$5,000,000 beyond the period of grace if any, provided in the instrument or
agreement under which such Debt was created, or (ii) default in the observance
or performance of any other agreement or condition relating to any Debt (other
than the Notes or any Reimbursement Obligation) the aggregate outstanding amount
of which Debt is in excess of $5,000,000 or contained in any instrument or
agreement evidencing, securing or relating thereto or any other event shall
occur or condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of such Debt (or a
trustee or agent on behalf of such holder or holders) to cause, with the giving
of notice if required, any such Debt to become due prior to its stated maturity
(any applicable grace period having expired).
65
(g) Change in Control. Any person or group of persons (within the meaning
of Section 13(d) of the Securities Exchange Act of 1934, as amended) shall
obtain ownership or control in one or more series of transactions of more than
thirty percent (30%) of the common stock or thirty percent (30%) of the voting
power of the Borrower entitled to vote in the election of members of the board
of directors of the Borrower or there shall have occurred under any indenture or
other instrument evidencing any Debt in excess of $5,000,000 any "change in
control" (as defined in such indenture or other evidence of Debt) obligating the
Borrower to repurchase, redeem or repay all or any part of the Debt or capital
stock provided for therein (any such event, a "Change in Control").
(h) Voluntary Bankruptcy Proceeding. The Borrower or any Subsidiary thereof
shall (i) commence a voluntary case under the federal bankruptcy laws (as now or
hereafter in effect), (ii) file a petition seeking to take advantage of any
other laws, domestic or foreign, relating to bankruptcy, insolvency,
reorganization, winding up or composition for adjustment of debts, (iii) consent
to or fail to contest in a timely and appropriate manner any petition filed
against it in an involuntary case under such bankruptcy laws or other laws, (iv)
apply for or consent to, or fail to contest in a timely and appropriate manner,
the appointment of, or the taking of possession by, a receiver, custodian,
trustee, or liquidator of itself or of a substantial part of its property,
domestic or foreign, (v) admit in writing its inability to pay its debts as they
become due, (vi) make a general assignment for the benefit of creditors, or
(vii) take any corporate action for the purpose of authorizing any of the
foregoing.
(i) Involuntary Bankruptcy Proceeding. A case or other proceeding shall be
commenced against the Borrower or any Subsidiary thereof in any court of
competent jurisdiction seeking (i) relief under the federal bankruptcy laws (as
now or hereafter in effect) or under any other laws, domestic or foreign,
relating to bankruptcy, insolvency, reorganization, winding up or adjustment of
debts, or (ii) the appointment of a trustee, receiver, custodian, liquidator or
the like for the Borrower or any Subsidiary thereof or for all or any
substantial part of their respective assets, domestic or foreign, and such case
or proceeding shall continue without dismissal or stay for a period of sixty
(60) consecutive days, or an order granting the relief requested in such case or
proceeding (including, but not limited to, an order for relief under such
federal bankruptcy laws) shall be entered.
(j) Failure of Agreements. Any provision of this Agreement or any provision
of any other Loan Document shall for any reason cease to be valid and binding on
the Borrower or Subsidiary party thereto or any such Person or their
representative shall so state in writing, or any Loan Document shall for any
reason cease to create a valid and perfected first priority Lien on, or security
interest in, any of the collateral purported to be covered thereby, in each case
other than in accordance with the express terms hereof or thereof.
(k) Termination Event. The occurrence of any of the following events: (i)
the Borrower or any ERISA Affiliate fails to make full payment when due of all
amounts which, under the provisions of any Pension Plan or Section 412 of the
Code, the Borrower or any ERISA Affiliate is required to pay as contributions
thereto, (ii) an accumulated funding deficiency in excess of $1,000,000 occurs
or exists, whether or not waived, with respect to any Pension Plan, (iii) a
Termination Event or (iv) the Borrower or any ERISA Affiliate as employers under
one or more Multiemployer Plans makes a complete or partial withdrawal from any
such Multiemployer Plan and the plan sponsor of such Multiemployer Plans
notifies such withdrawing employer that such employer has incurred a withdrawal
liability requiring payments in an amount exceeding $1,000,000.
(l) Judgment. A judgment or order for the payment of money (in either case,
that is not fully covered by insurance as to which the insurer has acknowledged
liability) which causes the aggregate amount of all such judgments to exceed
$5,000,000 in any Fiscal Year shall be entered against the Borrower or any of
its Subsidiaries by any court and such judgment or order shall continue without
discharge or stay for a period of thirty (30) days.
(m) Environmental. Any one or more Environmental Claims shall have been
asserted against the Borrower or any of its Subsidiaries; the Borrower and its
Subsidiaries would be reasonable likely to incur liability as a result thereof;
and such liability would be reasonably likely, individually or in the aggregate,
to have a Material Adverse Effect.
66
SECTION 12.2 Remedies.
---------
Upon the occurrence of an Event of Default, with the consent of the
Required Lenders, the Administrative Agent may, or upon the request of the
Required Lenders, the Administrative Agent shall, by notice to the Borrower:
(a) Acceleration; Termination of Facilities. Declare the principal of and
interest on the Loans, the Notes and the Reimbursement Obligations at the time
outstanding, and all other amounts owed to the Lenders and to the Administrative
Agent under this Agreement or any of the other Loan Documents (including,
without limitation, all L/C Obligations, whether or not the beneficiaries of the
then outstanding Letters of Credit shall have presented or shall be entitled to
present the documents required thereunder) and all other Obligations (other than
Hedging Obligations), to be forthwith due and payable, whereupon the same shall
immediately become due and payable without presentment, demand, protest or other
notice of any kind, all of which are expressly waived, anything in this
Agreement or the other Loan Documents to the contrary notwithstanding, and
terminate the Credit Facility and any right of the Borrower to request
borrowings or Letters of Credit thereunder; provided, that upon the occurrence
of an Event of Default specified in Section 12.1(h) or (i), the Credit Facility
shall be automatically terminated and all Obligations (other than Hedging
Obligations) shall automatically become due and payable without presentment,
demand, protest or other notice of any kind, all of which are expressly waived,
anything in this Agreement or in any other Loan Document to the contrary
notwithstanding.
(b) Letters of Credit. With respect to all Letters of Credit with respect
to which any amount shall remain undrawn and unexpired at the time of an
acceleration pursuant to the preceding paragraph, the Borrower shall at such
time deposit in a cash collateral account opened by the Administrative Agent an
amount equal to the aggregate then undrawn and unexpired amount of such Letters
of Credit. Amounts held in such cash collateral account shall be applied by the
Administrative Agent to the payment of drafts drawn under such Letters of
Credit, and the unused portion thereof after all such Letters of Credit shall
have expired or been fully drawn upon, if any, shall be applied to repay the
other Obligations on a pro rata basis. After all such Letters of Credit shall
have expired or been fully drawn upon, the Reimbursement Obligation shall have
been satisfied and all other Obligations shall have been paid in full, the
balance, if any, in such cash collateral account shall be returned to the
Borrower.
(c) Rights of Collection. Exercise on behalf of the Lenders all of its
other rights and remedies under this Agreement, the other Loan Documents and
Applicable Law, in order to satisfy all of the Borrower's Obligations.
SECTION 12.3 Rights and Remedies Cumulative; Non-Waiver; etc.
------------------------------------------------
The enumeration of the rights and remedies of the Administrative Agent and
the Lenders set forth in this Agreement is not intended to be exhaustive and the
exercise by the Administrative Agent and the Lenders of any right or remedy
shall not preclude the exercise of any other rights or remedies, all of which
shall be cumulative, and shall be in addition to any other right or remedy given
hereunder or under the other Loan Documents or that may now or hereafter exist
at law or in equity or by suit or otherwise. No delay or failure to take action
on the part of the Administrative Agent or any Lender in exercising any right,
power or privilege shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right, power or privilege preclude any other or
further exercise thereof or the exercise of any other right, power or privilege
or shall be construed to be a waiver of any Event of Default. No course of
dealing between the Borrower, the Administrative Agent and the Lenders or their
respective agents or employees shall be effective to change, modify or discharge
any provision of this Agreement or any of the other Loan Documents or to
constitute a waiver of any Event of Default.
67
ARTICLE XIII
THE ADMINISTRATIVE AGENT
SECTION 13.1 Appointment.
------------
Each of the Lenders hereby irrevocably designates and appoints Wachovia as
Administrative Agent of such Lender under this Agreement and the other Loan
Documents for the term hereof and each such Lender irrevocably authorizes
Wachovia, as Administrative Agent for such Lender, to take such action on its
behalf under the provisions of this Agreement and the other Loan Documents and
to exercise such powers and perform such duties as are expressly delegated to
the Administrative Agent by the terms of this Agreement and such other Loan
Documents, together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement or
such other Loan Documents, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein and therein, or any
fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or the other Loan Documents or otherwise exist against the
Administrative Agent. Any reference to the Administrative Agent in this Article
XIII shall be deemed to refer to the Administrative Agent solely in its capacity
as Administrative Agent and not in its capacity as a Lender.
SECTION 13.2 Delegation of Duties.
---------------------
The Administrative Agent may execute any of its respective duties under
this Agreement and the other Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Administrative Agent shall not be
responsible for the negligence or misconduct of any agents or attorneys-in-fact
selected by the Administrative Agent with reasonable care.
SECTION 13.3 Exculpatory Provisions.
-----------------------
Neither the Administrative Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact, Subsidiaries or Affiliates shall be (a)
liable for any action lawfully taken or omitted to be taken by it or such Person
under or in connection with this Agreement or the other Loan Documents (except
for actions occasioned directly by its or such Person's own gross negligence or
willful misconduct), or (b) responsible in any manner to any of the Lenders for
any recitals, statements, representations or warranties made by the Borrower or
any of its Subsidiaries or any officer thereof contained in this Agreement or
the other Loan Documents or in any certificate, report, statement or other
document referred to or provided for in, or received by the Administrative Agent
under or in connection with, this Agreement or the other Loan Documents or for
the value, validity, effectiveness, genuineness, enforceability or sufficiency
of this Agreement or the other Loan Documents or for any failure of the Borrower
or any of its Subsidiaries to perform its obligations hereunder or thereunder.
The Administrative Agent shall not be under any obligation to any Lender to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement, or to inspect the
properties, books or records of the Borrower or any of its Subsidiaries.
SECTION 13.4 Reliance by the Administrative Agent.
-------------------------------------
The Administrative Agent shall be entitled to rely, and shall be fully
protected in relying, upon any note, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons and upon advice and statements of legal counsel, independent
accountants and other experts selected by the Administrative Agent. The
Administrative Agent may deem and treat the payee of any Note as the owner
thereof for all purposes unless such Note shall have been transferred in
accordance with Section 14.10. The Administrative Agent shall be fully justified
in failing or refusing to take any action under this Agreement and the other
Loan Documents unless it shall first receive such advice or concurrence of the
68
Required Lenders (or, when expressly required hereby or by the relevant other
Loan Documents, all the Lenders) as it deems appropriate or it shall first be
indemnified to its satisfaction by the Lenders against any and all liability and
expense which may be incurred by it by reason of taking or continuing to take
any such action except for its own gross negligence or willful misconduct. The
Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement and the Notes in accordance with a
request of the Required Lenders (or, when expressly required hereby, all the
Lenders), and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Lenders and all future holders of the
Notes.
SECTION 13.5 Notice of Default.
------------------
The Administrative Agent shall not be deemed to have knowledge or notice of
the occurrence of any Default or Event of Default unless it has received notice
from a Lender or the Borrower referring to this Agreement, describing such
Default or Event of Default and stating that such notice is a "notice of
default". In the event that the Administrative Agent receives such a notice, it
shall promptly give notice thereof to the Lenders. The Administrative Agent
shall take such action with respect to such Default or Event of Default as shall
be reasonably directed by the Required Lenders (or, when expressly required
hereby, all the Lenders); provided that unless and until the Administrative
Agent shall have received such directions, the Administrative Agent may (but
shall not be obligated to) take such action, or refrain from taking such action,
with respect to such Default or Event of Default as it shall deem advisable in
the best interests of the Lenders, except to the extent that other provisions of
this Agreement expressly require that any such action be taken or not be taken
only with the consent and authorization or the request of the Lenders or
Required Lenders, as applicable.
SECTION 13.6 Non-Reliance on the Administrative Agent and Other Lenders.
-----------------------------------------------------------
Each Lender expressly acknowledges that neither the Administrative Agent
nor any of its respective officers, directors, employees, agents,
attorneys-in-fact, Subsidiaries or Affiliates has made any representations or
warranties to it and that no act by the Administrative Agent hereafter taken,
including any review of the affairs of the Borrower or any of its Subsidiaries,
shall be deemed to constitute any representation or warranty by the
Administrative Agent to any Lender. Each Lender represents to the Administrative
Agent that it has, independently and without reliance upon the Administrative
Agent or any other Lender, and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, operations, property, financial and other condition and
creditworthiness of the Borrower and its Subsidiaries and made its own decision
to make its Loans and issue or participate in Letters of Credit hereunder and
enter into this Agreement. Each Lender also represents that it will,
independently and without reliance upon the Administrative Agent or any other
Lender, and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit analysis, appraisals and decisions
in taking or not taking action under this Agreement and the other Loan
Documents, and to make such investigation as it deems necessary to inform itself
as to the business, operations, property, financial and other condition and
creditworthiness of the Borrower and its Subsidiaries. Except for notices,
reports and other documents expressly required to be furnished to the Lenders by
the Administrative Agent hereunder or by the other Loan Documents, the
Administrative Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the business, operations,
property, financial and other condition or creditworthiness of the Borrower or
any of its Subsidiaries which may come into the possession of the Administrative
Agent or any of its respective officers, directors, employees, agents,
attorneys-in-fact, Subsidiaries or Affiliates.
69
SECTION 13.7 Indemnification.
----------------
The Lenders agree to indemnify the Administrative Agent in its capacity as
such and (to the extent not reimbursed by the Borrower and without limiting the
obligation of the Borrower to do so), ratably according to the respective
amounts of their Revolving Credit Commitment Percentages or Term Loan
Percentages, as applicable, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time following the payment of the Notes
or any Reimbursement Obligation) be imposed on, incurred by or asserted against
the Administrative Agent in any way relating to or arising out of this Agreement
or the other Loan Documents, or any documents, reports or other information
provided to the Administrative Agent or any Lender or contemplated by or
referred to herein or therein or the transactions contemplated hereby or thereby
or any action taken or omitted by the Administrative Agent under or in
connection with any of the foregoing; provided that no Lender shall be liable
for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting directly from the Administrative Agent's bad faith, gross negligence
or willful misconduct. The agreements in this Section 13.7 shall survive the
payment of the Notes, any Reimbursement Obligation and all other amounts payable
hereunder and the termination of this Agreement.
SECTION 13.8 The Administrative Agent in Its Individual Capacity.
----------------------------------------------------
The Administrative Agent and its respective Subsidiaries and Affiliates may
make loans to, accept deposits from and generally engage in any kind of business
with the Borrower as though the Administrative Agent were not the Administrative
Agent hereunder. With respect to any Loans made or renewed by it and any Note
issued to it and with respect to any Letter of Credit issued by it or
participated in by it, the Administrative Agent shall have the same rights and
powers under this Agreement and the other Loan Documents as any Lender and may
exercise the same as though it were not the Administrative Agent, and the terms
"Lender" and "Lenders" shall include the Administrative Agent in its individual
capacity.
SECTION 13.9 Resignation of the Administrative Agent; Successor
--------------------------------------------------
Administrative Agent.
---------------------
Subject to the appointment and acceptance of a successor as provided below,
the Administrative Agent may resign at any time by giving notice thereof to the
Lenders and the Borrower. Upon any such resignation, the Required Lenders shall
have the right to appoint a successor Administrative Agent, which successor
shall have minimum capital and surplus of at least $500,000,000. If no successor
Administrative Agent shall have been so appointed by the Required Lenders and
shall have accepted such appointment within thirty (30) days after the
Administrative Agent's giving of notice of resignation, then the Administrative
Agent may, on behalf of the Lenders, appoint a successor Administrative Agent,
which successor shall have minimum capital and surplus of at least $500,000,000.
Upon the acceptance of any appointment as Administrative Agent hereunder by a
successor Administrative Agent, such successor Administrative Agent shall
thereupon succeed to and become vested with all rights, powers, privileges and
duties of the retiring Administrative Agent, and the retiring Administrative
Agent shall be discharged from its duties and obligations hereunder. After any
retiring Administrative Agent's resignation hereunder as Administrative Agent,
the provisions of this Section 13.9 shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was acting as
Administrative Agent.
SECTION 13.10 Documentation Agents and Syndication Agents.
--------------------------------------------
The Documentation Agents and the Syndication Agents, in their respective
capacities as documentation and syndication agents, shall have no duties or
responsibilities under this Agreement or any other Loan Document.
70
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices.
--------
(a) Method of Communication. Except as otherwise provided in this
Agreement, all notices and communications hereunder shall be in writing (for
purposes hereof, the term "writing" shall include information in electronic
format such as electronic mail and internet web pages), or by telephone
subsequently confirmed in writing. Any notice shall be effective if delivered by
hand delivery or sent via electronic mail, posting on an internet web page,
telecopy, recognized overnight courier service or certified mail, return receipt
requested, and shall be presumed to be received by a party hereto (i) on the
date of delivery if delivered by hand or sent by electronic mail, posting on an
internet web page, telecopy, (ii) on the next Business Day if sent by recognized
overnight courier service and (iii) on the third Business Day following the date
sent by certified mail, return receipt requested. A telephonic notice to the
Administrative Agent as understood by the Administrative Agent will be deemed to
be the controlling and proper notice in the event of a discrepancy with or
failure to receive a confirming written notice.
(b) Addresses for Notices. Notices to any party shall be sent to it at the
following addresses, or any other address as to which all the other parties are
notified in writing.
If to the Borrower: Jack in the Box Inc.
9330 Balboa Avenue
San Diego, California 92123-1516
Attention: Harold L. Sachs
Telephone No.: (858) 571-2215
Telecopy No.: (858) 694-1533
With copies to: Gray Cary Ware & Freidenrich
4365 Executive Drive, Suite 1100
San Diego, CA 92121-2133
Attention: Craig Tighe
Telephone No.: (650) 833-2362
Telecopy No.: (650) 269-1740
If to Wachovia as Wachovia Bank, National Association
Administrative Agent: Charlotte Plaza, CP-8
201 South College Street
Charlotte, North Carolina 28288-0680
Attention: Syndication Agency Services
Telephone No.: (704) 374-2698
Telecopy No.: (704) 383-0288
With copies to: Wachovia Bank, National Association
301 South College Street
Charlotte, North Carolina 28288-0606
Attention: Louis K. Beasley III
Telephone No.: (704) 374-3070
Telecopy No.: (704) 383-8494
If to any Lender: To the address set forth in the Register
(c) Administrative Agent's Office. The Administrative Agent hereby
designates its office located at the address set forth above, or any subsequent
office which shall have been specified for such purpose by written notice to the
Borrower and Lenders, as the Administrative Agent's Office referred to herein,
to which payments due are to be made and at which Loans will be disbursed and
Letters of Credit requested.
71
SECTION 14.2 Expenses; Indemnity.
--------------------
The Borrower will (a) pay all out-of-pocket expenses (including, without
limitation, all costs of electronic or internet distribution of any information
hereunder) of the Administrative Agent in connection with (i) the preparation,
execution and delivery of this Agreement and each other Loan Document, whenever
the same shall be executed and delivered, including, without limitation, all
out-of-pocket syndication and due diligence expenses and reasonable fees and
disbursements of counsel for the Administrative Agent and (ii) the preparation,
execution and delivery of any waiver, amendment or consent by the Administrative
Agent or the Lenders relating to this Agreement or any other Loan Document,
including, without limitation, reasonable fees and disbursements of counsel for
the Administrative Agent, (b) pay all reasonable out-of-pocket expenses of the
Administrative Agent and each Lender actually incurred in connection with the
administration and enforcement of any rights and remedies of the Administrative
Agent and Lenders under the Credit Facility, including, without limitation, in
connection with any workout, restructuring, bankruptcy or other similar
proceeding, creating and perfecting Liens in favor of Administrative Agent on
behalf of Lenders pursuant to any Security Document, enforcing any Obligations
of, or collecting any payments due from, the Borrower or any Guarantor by reason
of an Event of Default (including in connection with the sale of, collection
from, or other realization upon any of the Collateral or the enforcement of the
Guaranty Agreement; consulting with appraisers, accountants, engineers,
attorneys and other Persons concerning the nature, scope or value of any right
or remedy of the Administrative Agent or any Lender hereunder or under any other
Loan Document or any factual matters in connection therewith, which expenses
shall include without limitation the reasonable fees and disbursements of such
Persons, and (c) defend, indemnify and hold harmless the Administrative Agent
and the Lenders, and their respective parents, Subsidiaries, Affiliates,
employees, agents, trustees, advisors, officers and directors, from and against
any obligations, losses, penalties, fines, liabilities, settlements, damages,
actions, judgments, suits, disbursements, costs and expenses, suffered by any
such Person in connection with any claim (including, without limitation, any
Environmental Claims), investigation, litigation or other proceeding (whether or
not the Administrative Agent or any Lender is a party thereto) and the
prosecution and defense thereof, arising out of or in any way connected with the
Loans, this Agreement, any other Loan Document, or any documents, reports or
other information provided to the Administrative Agent or any Lender or
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby, including, without limitation, reasonable
attorney's and consultant's fees, except to the extent that any of the foregoing
directly result from the gross negligence or willful misconduct of the party
seeking indemnification therefor.
SECTION 14.3 Set-off.
--------
In addition to any rights now or hereafter granted under Applicable Law and
not by way of limitation of any such rights, upon and after the occurrence of
any Event of Default and during the continuance thereof, the Lenders and any
assignee or participant of a Lender in accordance with Section 14.10 are hereby
authorized by the Borrower at any time or from time to time, without notice to
the Borrower or to any other Person, any such notice being hereby expressly
waived, to set off and to appropriate and to apply any and all deposits (general
or special, time or demand, including, but not limited to, indebtedness
evidenced by certificates of deposit, whether matured or unmatured) and any
other indebtedness at any time held or owing by the Lenders, or any such
assignee or participant to or for the credit or the account of the Borrower
against and on account of the Obligations irrespective of whether or not (a) the
Lenders shall have made any demand under this Agreement or any of the other Loan
Documents or (b) the Administrative Agent shall have declared any or all of the
Obligations to be due and payable as permitted by Section 12.2 and although such
Obligations shall be contingent or unmatured. Notwithstanding the preceding
sentence, each Lender agrees to notify the Borrower and the Administrative Agent
after any such set-off and application, provided that the failure to give such
notice shall not affect the validity of such set-off and application.
SECTION 14.4 Governing Law.
--------------
This Agreement, the Notes and the other Loan Documents, unless otherwise
expressly set forth therein, shall be governed by, construed and enforced in
accordance with the laws of the State of New York (including Section 5-1401 and
Section 5-1402 of the General Obligations Law of the State of New York), without
reference to the conflicts of law principles thereof.
72
SECTION 14.5 Jurisdiction and Venue.
-----------------------
(a) Jurisdiction. The Borrower hereby irrevocably consents to the personal
jurisdiction of the state and federal courts located in Mecklenburg County,
North Carolina and New York, New York (and any courts from which an appeal from
any of such courts must or may be taken), in any action, claim or other
proceeding arising out of any dispute in connection with this Agreement, the
Notes and the other Loan Documents, any rights or obligations hereunder or
thereunder, or the performance of such rights and obligations. The Borrower
hereby irrevocably consents to the service of a summons and complaint and other
process in any action, claim or proceeding brought by the Administrative Agent
or any Lender in connection with this Agreement, the Notes or the other Loan
Documents, any rights or obligations hereunder or thereunder, or the performance
of such rights and obligations, on behalf of itself or its property, in the
manner specified in Section 14.1. Nothing in this Section 14.5 shall affect the
right of the Administrative Agent or any Lender to serve legal process in any
other manner permitted by Applicable Law or affect the right of the
Administrative Agent or any Lender to bring any action or proceeding against the
Borrower or its properties in the courts of any other jurisdictions.
(b) Venue. The Borrower hereby irrevocably waives any objection it may have
now or in the future to the laying of venue in the aforesaid jurisdictions in
any action, claim or other proceeding arising out of or in connection with this
Agreement, any other Loan Document or the rights and obligations of the parties
hereunder or thereunder. The Borrower irrevocably waives, in connection with
such action, claim or proceeding, any plea or claim that the action, claim or
other proceeding has been brought in an inconvenient forum.
SECTION 14.6 Waiver of Jury Trial.
---------------------
THE ADMINISTRATIVE AGENT, EACH LENDER AND THE BORROWER HEREBY ACKNOWLEDGE
AND AGREE TO IRREVOCABLY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL WITH
RESPECT TO ANY ACTION, CLAIM OR OTHER PROCEEDING ARISING OUT OF ANY DISPUTE,
JUDICIAL PROCEEDING, CLAIM OR CONTROVERSY IN CONNECTION WITH THIS AGREEMENT, THE
NOTES OR THE OTHER LOAN DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR
THEREUNDER, OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS.
SECTION 14.7 Reversal of Payments.
---------------------
To the extent the Borrower makes a payment or payments to the
Administrative Agent for the ratable benefit of the Lenders or the
Administrative Agent receives any payment or proceeds of the collateral which
payments or proceeds or any part thereof are subsequently invalidated, declared
to be fraudulent or preferential, set aside and/or required to be repaid to a
trustee, receiver or any other party under any bankruptcy law, state or federal
law, common law or equitable cause, then, to the extent of such payment or
proceeds repaid, the Obligations or part thereof intended to be satisfied shall
be revived and continued in full force and effect as if such payment or proceeds
had not been received by the Administrative Agent.
SECTION 14.8 Injunctive Relief; Punitive Damages.
------------------------------------
(a) The Borrower recognizes that, in the event the Borrower fails to
perform, observe or discharge any of its obligations or liabilities under this
Agreement, any remedy of law may prove to be inadequate relief to the Lenders.
Therefore, the Borrower agrees that the Lenders, at the Lenders' option, shall
be entitled to temporary and permanent injunctive relief in any such case
without the necessity of proving actual damages.
(b) The Administrative Agent, the Lenders and the Borrower (on behalf of
itself and its Subsidiaries) hereby agree that no such Person shall have a
remedy of punitive or exemplary damages against any other party to a Loan
Document and each such Person hereby waives any right or claim to punitive or
exemplary damages that they may now have or may arise in the future in
connection with any Dispute, whether such Dispute is resolved through
arbitration or judicially.
73
SECTION 14.9 Accounting Matters.
-------------------
Except as otherwise expressly provided herein, all terms of an accounting
or financial nature shall be construed in accordance with GAAP, as in effect
from time to time, provided that, if the Borrower notifies the Administrative
Agent that the Borrower requests an amendment to any provision hereof to
eliminate the effect of any change occurring after the date hereof in GAAP or in
the application thereof on the operation of such provision (or if the
Administrative Agent notifies the Borrower that the Required Lenders request an
amendment to any provision hereof for such purpose), regardless of whether any
such notice is given before or after such change in GAAP or in the application
thereof, then such provision shall be interpreted on the basis of GAAP as in
effect and applied immediately before such change shall have become effective
until such notice shall have been withdrawn or such provision amended in
accordance therewith.
SECTION 14.10 Successors and Assigns; Participations.
---------------------------------------
(a) Benefit of Agreement. This Agreement shall be binding upon and inure to
the benefit of the Borrower, the Administrative Agent and the Lenders, all
future holders of the Notes, and their respective successors and assigns, except
that the Borrower shall not assign or transfer any of its rights or obligations
under this Agreement without the prior written consent of each Lender.
(b) Assignment by Lenders. Each Lender may, in accordance with Applicable
Law, sell or assign to any Lender, any Affiliate of a Lender or in the case of
the Term Loans, any Approved Fund, and, with the consent of the Borrower (so
long as no Default or Event of Default has occurred and is continuing) and the
consent of the Administrative Agent, which consents shall not be unreasonably
withheld or delayed, assign to one or more other Eligible Assignees (any of the
foregoing assignees or purchasers, a "Purchasing Lender") all or a portion of
its interests, rights and obligations under this Agreement and the other Loan
Documents (including, without limitation, all or a portion of the Extensions of
Credit at the time owing to it and the Notes held by it); provided that:
(i) each such assignment shall be of a constant, and not a varying,
percentage of the assigning Lender's rights and obligations under this
Agreement;
(ii) if less than all of the assigning Lender's Revolving Credit
Commitment or Term Loan Commitment, as applicable, is to be assigned, the
Commitment so assigned shall not be less than $5,000,000 with respect to the
Revolving Credit Facility and $1,000,000 (or otherwise agreed by the
Administrative Agent and the Borrower) with respect to the Term Loan Facility,
unless such sale or assignment is made to an existing Lender, to an Affiliate
thereof, or (with respect to any Term Loan) to an Approved Fund, in which case
no minimum amount shall apply;
(iii) the Purchasing Lender shall have delivered to the Administrative
Agent all United States Internal Revenue Service Forms required pursuant to
Section 5.11(e) and all of the parties to each such assignment shall execute and
deliver to the Administrative Agent, for its acceptance and recording in the
Register, an Assignment and Acceptance substantially in the form of Exhibit G
attached hereto (an "Assignment and Acceptance"), together with (to the extent
requested by any Purchasing Lender) any Note or Notes subject to such
assignment;
(iv) no assignment of a Revolving Credit Commitment, or participation in
L/C Obligations or Swingline Loans shall be made without the prior written
consent of the Administrative Agent, the Swingline Lender, the Issuing Lender
and (so long as no Default or Event of Default has occurred and is continuing)
the Borrower (which consents shall not be unreasonably withheld);
(v) where consent of the Borrower to an assignment to a Purchasing
Lender is required hereunder (including consent to an assignment to an Approved
Fund), the Borrower shall be deemed to have given its consent five (5) Business
Days after the date written notice thereof has been delivered by the assigning
Lender (through the Administrative Agent) unless such consent is expressly
refused by the Borrower prior to such fifth (5th) Business Day;
74
(vi) such assignment shall not, without the consent of the Borrower,
require the Borrower to file a registration statement with the Securities and
Exchange Commission or apply to or qualify the Loans or the Notes under the blue
sky laws of any state; and
(vii) the assigning Lender shall pay to the Administrative Agent an
assignment fee of $3,500 upon the execution by such Lender of the Assignment and
Acceptance; provided that no such fee shall be payable upon any assignment by a
Lender to an Affiliate thereof; and provided further that, in any case of
contemporaneous assignments by a Lender (including a group of affiliated Lenders
that are funds managed by the same investment advisor) to a single assignee or
more than one fund managed by the same investment advisor (which funds are not
then Lenders hereunder), only a single $3,500 fee shall be payable for all such
contemporaneous assignments..
Upon such execution, delivery, acceptance and recording, from and after the
effective date specified in each Assignment and Acceptance, which effective date
shall be at least five (5) Business Days after the execution thereof (unless
otherwise agreed to by the Administrative Agent), (A) the Purchasing Lender
thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Lender hereby
and (B) the Lender thereunder shall, to the extent provided in such assignment,
be released from its obligations under this Agreement.
(c) Rights and Duties Upon Assignment. By executing and delivering an
Assignment and Acceptance, the assigning Lender thereunder and the Purchasing
Lender thereunder confirm to and agree with each other and the other parties
hereto as set forth in such Assignment and Acceptance.
(d) Register. The Administrative Agent shall maintain a copy of each
Assignment and Acceptance delivered to it and a register for the recordation of
the names and addresses of the Lenders and the amount of the Extensions of
Credit with respect to each Lender from time to time (the "Register"). The
entries in the Register shall be conclusive, in the absence of manifest error,
and the Borrower, the Administrative Agent and the Lenders may treat each person
whose name is recorded in the Register as a Lender hereunder for all purposes of
this Agreement. The Register shall be available for inspection by the Borrower
and by any Lender solely to the extent of any entries applicable to such Lender
at any reasonable time and from time to time upon reasonable prior notice.
(e) Issuance of New Notes. Upon its receipt of an Assignment and Acceptance
executed by an assigning Lender and a Purchasing Lender together with any Note
or Notes (if applicable) subject to such assignment and (if applicable) the
written consent to such assignment, the Administrative Agent shall, if such
Assignment and Acceptance has been completed and is substantially in the form of
Exhibit G:
(i) accept such Assignment and Acceptance;
(ii) record the information contained therein in the Register;
(iii) give prompt notice thereof to the Lenders and the Borrower; and
(iv) promptly deliver a copy of such Assignment and Acceptance to the
Borrower.
Within five (5) Business Days after receipt of notice, the Borrower shall
execute and deliver to the Administrative Agent, in exchange for the surrendered
Note or Notes, if any, a new Note or Notes to the order of such Purchasing
Lender (to the extent requested thereby) in amounts equal to the Revolving
Credit Commitment and/or the Term Loans or Term Loan Commitment assumed by it
pursuant to such Assignment and Acceptance and a new Note or Notes to the order
of the assigning Lender (to the extent requested thereby) in an amount equal to
the Revolving Credit Commitment and/or the Term Loans or Term Loan Commitment
retained by it hereunder. Such new Note or Notes shall be in an aggregate
principal amount equal to the aggregate principal amount of such surrendered
Note or Notes, shall be dated the effective date of such Assignment and
Acceptance and shall otherwise be in substantially the form of the assigned
Notes delivered to the assigning Lender. Each surrendered Note or Notes shall be
canceled and returned to the Borrower. Notwithstanding anything in this
Agreement to the contrary, any Lender which has not been issued a Note or Notes
hereunder may at any time deliver a written request for a Note or Notes to the
Administrative Agent and the Borrower. Within five (5) Business Days after
receipt of notice, the Borrower shall execute and deliver to the Administrative
Agent, a Note or Notes (as applicable) to the order of such Lender in amounts
equal to the Revolving Credit Commitment and/or the Term Loan Commitment of such
Lender. Upon receipt thereby, the Administrative Agent shall promptly deliver
such Note or Notes to such Lender.
75
(f) Participations. Each Lender may, without notice to or the consent of
the Borrower or the Administrative Agent, and in accordance with Applicable Law,
sell participations to one or more banks or other entities (any such bank or
other entity, a "Participant") in all or a portion of its rights and/or
obligations under this Agreement (including, without limitation, all or a
portion of its Extensions of Credit and the Notes held by it); provided that:
(i) each such participation shall be in an amount not less than
$5,000,000 with respect to the Revolving Credit Facility and $1,000,000 (or
otherwise agreed by the Administrative Agent and the Borrower) with respect to
the Term Loan Facility;
(ii) such Lender's obligations under this Agreement (including, without
limitation, its Revolving Credit Commitment and/or its Term Loan Commitment, as
applicable) shall remain unchanged;
(iii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations;
(iv) such Lender shall remain the holder of the Notes held by it for all
purposes of this Agreement;
(v) the Borrower, the Administrative Agent and the other Lenders shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement;
(vi) such Lender shall not permit such Participant the right to approve
any waivers, amendments or other modifications to this Agreement or any other
Loan Document other than waivers, amendments or modifications which would reduce
the principal of or the interest rate on any Loan or Reimbursement Obligation,
extend the term or increase the amount of the Revolving Credit Commitment and/or
the Term Loan Commitment of such Lender, reduce the amount of any fees to which
such Participant is entitled, extend any scheduled payment date for principal of
any Loan or, except as expressly contemplated hereby or thereby, release
substantially all of the Collateral; and
(vii) any such disposition shall not, without the consent of the Borrower,
require the Borrower to file a registration statement with the Securities and
Exchange Commission to apply to qualify the Loans or the Notes under the blue
sky law of any state.
The Borrower agrees that each Participant shall be entitled to the benefits
of Section 5.7, Section 5.8, Section 5.9, Section 5.10, Section 5.11 and Section
14.3 to the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to paragraph (b) of this Section 14.10; provided that a
Participant shall not be entitled to receive any greater payment under Section
5.7, Section 5.8, Section 5.9, Section 5.10, and Section 5.11 than the
applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to
such Participant is made with the Borrower's prior written consent and such
Participant shall have delivered to the Administrative Agent all United States
Internal Revenue Service Forms required pursuant to Section 5.11(e).
(g) Disclosure of Information; Confidentiality. The Administrative Agent
and the Lenders shall maintain as confidential, and shall cause their Affiliates
to maintain as confidential, all non-public information with respect to the
Borrower obtained pursuant to the Loan Documents (or any Hedging Agreement with
a Lender or the Administrative Agent) in accordance with their customary
procedures for handling confidential information; provided, that the
Administrative Agent may disclose information relating to this Agreement to Gold
Sheets and other similar bank trade publications, such information to consist of
deal terms and other information customarily found in such publications and
provided further, that the Administrative Agent or any Lender may disclose any
such information to the extent such disclosure is (i) required by law or
requested or required pursuant to any legal process, (ii) requested by, or
required to be disclosed to, any rating agency, or regulatory or similar
authority (including, without limitation, the National Association of Insurance
Commissioners), (iii) used in any suit, action or proceeding for the purpose of
defending itself, reducing its liability or protecting any of its claims,
rights, remedies or interests under or in connection with the Loan Documents (or
any Hedging Agreement with a Lender or the Administrative Agent) or (iv) related
to the "tax treatment" or "tax structure" (in each case within the meaning of
76
Treasury Regulation Section 1.6011-4) of the transactions contemplated hereby
and all materials of any kind (including opinions or other tax analyses) that
are provided to the Administrative Agent or such Lender relating to such tax
treatment or tax structure. Any Lender may, in connection with any assignment,
proposed assignment, participation or proposed participation pursuant to this
Section 14.10, disclose to the Purchasing Lender, proposed Purchasing Lender,
Participant, proposed Participant, or to any direct or indirect contractual
counterparty in swap agreements or such contractual counterparty's professional
advisor any information relating to the Borrower furnished to such Lender by or
on behalf of the Borrower; provided, that prior to any such disclosure, each
such Purchasing Lender, proposed Purchasing Lender, Participant or proposed
Participant, contractual counterparty or professional advisor shall agree to be
bound by the provisions of this Section 14.10(g).
(h) Certain Pledges or Assignments. Any Lender may at any time pledge or
assign a security interest in all or any portion of its rights under this
Agreement or any other Loan Document to secure obligations of such Lender,
including without limitation any pledge or assignment to secure obligations to a
Federal Reserve Bank; provided that no such pledge or assignment of a security
interest shall release a Lender from any of its obligations hereunder or
substitute such pledgee or assignee for such Lender as a party hereto.
SECTION 14.11 Amendments, Waivers and Consents.
---------------------------------
Except as specifically provided in any Loan Document, any term, covenant,
agreement or condition of this Agreement or any of the other Loan Documents may
be amended or waived by the Lenders, and any consent given by the Lenders, if,
but only if, such amendment, waiver or consent is in writing signed by the
requisite Lenders specified below (or by the Administrative Agent with the
consent of such requisite Lenders) and delivered to the Administrative Agent
and, in the case of an amendment, signed by the Borrower.
(a) any consent, waiver or amendment purporting to: (i) increase the
Revolving Credit Commitment of any Lender (ii) reduce the rate of, or forgive
any, interest payable on any Revolving Credit Loans or Reimbursement Obligation,
or any fees, (iii) reduce or forgive the principal amount of any Revolving
Credit Loans or Reimbursement Obligation, (iv) extend the originally scheduled
time or times of payment of the principal of any Revolving Credit Loans or
Reimbursement Obligation or the time or times of payment of interest on any
Revolving Credit Loan or Reimbursement Obligation or any fee or commission with
respect thereto, (v) permit any subordination of the principal or interest on,
or any Lien securing, any Revolving Credit Loans or Reimbursement Obligation,
(vi) waive any of the conditions contained in Section 6.3 or (vii) extend the
time of the obligation of the Lenders that have a Revolving Credit Commitment to
make or issue or participate in Letters of Credit or Swingline Loans shall, in
each case, require the written consent of each Lender having a Revolving Credit
Commitment, which such Lender is directly affected thereby;
(b) any consent, waiver or amendment purporting to: (i) increase the Term
Loan Commitment of any Lender, (ii) reduce the rate of, or forgive any, interest
payable on any Term Loan or any fees, (iii) reduce or forgive the principal
amount of any Term Loan, (iv) extend the originally scheduled time or times of
payment of the principal of any Term Loan or the time or times of payment of
interest on any Term Loan or any fee or commission with respect thereto, or (v)
permit any subordination of the principal or interest on, or any Lien securing
any Term Loan, shall, in each case, require the written consent of each Lender
that has a Term Loan Commitment or has made Term Loans, which such Lender is
directly affected thereby;
(c) any consent, waiver or amendment purporting to: (i) release any
material portion of the Collateral or release any Security Document or release
any Guarantor (other than in connection with the redesignation of a Restricted
Subsidiary as an Unrestricted Subsidiary in accordance with Section 9.9, with a
sale of assets permitted pursuant to Section 11.5, or as otherwise specifically
permitted in this Agreement or the applicable Security Document), (ii) amend the
provisions of this Section 14.11, (iii) amend the definition or percentage of
Required Lenders or (iv) release the Borrower from all or any material portion
of the Obligations (other than Hedging Obligations) hereunder or under any other
Loan Document or permit any assignment (other than as specifically permitted or
contemplated in this Agreement or any other Loan Document) of the Borrower's
rights and obligations hereunder or under any other Loan Document, shall, in
each case, require the written consent of each Lender; and
(d) all other amendments, waivers or consents not set forth in paragraphs
(a) (b) and (c) above, shall require the written consent of the Required
Lenders; provided, that for purposes of Section 6.3(b) of this Agreement, no
waiver of a Default or Event of Default shall be effective without the written
consent of the Lenders holding more than fifty percent (50%) of the Revolving
Credit Commitments (or, if the Revolving Credit Facility has been terminated,
Lenders holding more than fifty percent (50%) of the aggregate outstanding
Extensions of Credit thereunder).
77
In addition, no amendment, waiver or consent to the provisions of (a)
Article XIII shall be made without the written consent of the Administrative
Agent and (b) Article III without the written consent of the Issuing Lender.
SECTION 14.12 Performance of Duties.
----------------------
The Borrower's obligations under this Agreement and each of the other Loan
Documents shall be performed by the Borrower at its sole cost and expense.
SECTION 14.13 All Powers Coupled with Interest.
---------------------------------
All powers of attorney and other authorizations granted to the Lenders, the
Administrative Agent and any Persons designated by the Administrative Agent or
any Lender pursuant to any provisions of this Agreement or any of the other Loan
Documents shall be deemed coupled with an interest and shall be irrevocable so
long as any of the Obligations remain unpaid or unsatisfied, any of the
Commitments remain in effect or the Credit Facility has not been terminated.
SECTION 14.14 Survival of Indemnities.
------------------------
Notwithstanding any termination of this Agreement, the indemnities to which
the Administrative Agent and the Lenders are entitled under the provisions of
this Article XIV and any other provision of this Agreement and the other Loan
Documents shall continue in full force and effect and shall protect the
Administrative Agent and the Lenders against events arising after such
termination as well as before.
SECTION 14.15 Titles and Captions.
--------------------
Titles and captions of Articles, Sections and subsections in, and the table
of contents of, this Agreement are for convenience only, and neither limit nor
amplify the provisions of this Agreement.
SECTION 14.16 Severability of Provisions.
---------------------------
Any provision of this Agreement or any other Loan Document which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective only to the extent of such prohibition or unenforceability
without invalidating the remainder of such provision or the remaining provisions
hereof or thereof or affecting the validity or enforceability of such provision
in any other jurisdiction.
SECTION 14.17 Counterparts.
-------------
This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and shall be binding upon all
parties, their successors and assigns, and all of which taken together shall
constitute one and the same agreement.
SECTION 14.18 Term of Agreement.
------------------
This Agreement shall remain in effect from the Closing Date through and
including the date upon which all Obligations arising hereunder or under any
other Loan Document shall have been indefeasibly and irrevocably paid and
satisfied in full and all Commitments have been terminated. The Administrative
Agent is hereby permitted to release all Liens on the Collateral in favor of the
Administrative Agent, for the ratable benefit of itself and the Lenders, upon
repayment of the outstanding principal of and all accrued interest on the Loans,
payment of all outstanding fees and expenses hereunder and the termination of
the Lender's Commitments. No termination of this Agreement shall affect the
rights and obligations of the parties hereto arising prior to such termination
or in respect of any provision of this Agreement which survives such
termination.
78
SECTION 14.19 Advice of Counsel.
------------------
Each of the parties represents to each other party hereto that it has
discussed this Agreement with its counsel.
SECTION 14.20 No Strict Construction.
-----------------------
The parties hereto have participated jointly in the negotiation and
drafting of this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties hereto and no presumption or burden of proof shall arise favoring
or disfavoring any party by virtue of the authorship of any provisions of this
Agreement.
SECTION 14.21 Inconsistencies with Other Documents; Independent Effect of
-----------------------------------------------------------
Covenants.
----------
(a) In the event there is a conflict or inconsistency between this
Agreement and any other Loan Document, the terms of this Agreement shall
control; provided, that any provision of the Security Documents which imposes
additional burdens on the Borrower or its Subsidiaries or further restricts the
rights of the Borrower or its Subsidiaries or gives the Administrative Agent or
Lenders additional rights shall not be deemed to be in conflict or inconsistent
with this Agreement and shall be given full force and effect.
(b) The Borrower expressly acknowledges and agrees that each covenant
contained in Articles IX, X, or XI hereof shall be given independent effect.
Accordingly, the Borrower shall not engage in any transaction or other act
otherwise permitted under any covenant contained in Articles IX, X, or XI if,
before or after giving effect to such transaction or act, the Borrower shall or
would be in breach of any other covenant contained in Articles IX, X, or XI.
79
SECTION 14.22 Effect of Agreement.
--------------------
The parties hereto agree that this Agreement is given as a continuation,
modification and extension of the Existing Credit Agreement and shall not
constitute a modification of the Existing Credit Agreement.
[Signature pages to follow]
[Credit Agreement]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed under seal by their duly authorized officers, all as of the day and
year first written above.
[CORPORATE SEAL] JACK IN THE BOX INC., as Borrower
By: /s/Harold L. Sachs
--------------------------------------
Name: Harold L. Sachs
--------------------------------------
Title: Vice President, Treasurer
--------------------------------------
WACHOVIA BANK, NATIONAL
ASSOCIATION, as Administrative Agent and
Lender
By: /s/Louis K. Beasley, III
--------------------------------------
Name: Louis K. Beasley, III
--------------------------------------
Title: Director
--------------------------------------
FLEET NATIONAL BANK, as Syndication Agent
and Lender
By: /s/Cristin M. O'Haio
--------------------------------------
Name: Cristin M. O'Haio
--------------------------------------
Title: Director
--------------------------------------
COOPERATIEVE CENTRALE RAIFFEISEN
BOERENLEENBANK B.A. "RABOBANK INTERNATIONAL",
NEW YORK BRANCH, as Documentation Agent and
Leander
By: /s/Maree Krapels
--------------------------------------
Name: Maree Krapels
--------------------------------------
Title: Vice President
--------------------------------------
By: /s/Rebecca O. Morrow
--------------------------------------
Name: Rebecca O. Morrow
--------------------------------------
Title: Executive Director
--------------------------------------
80
BNP PARIBAS, as Documentation Agent and Lender
By: /s/Janice S. H. Ho
--------------------------------------
Name: Janice S. H. Ho
--------------------------------------
Title: Director
--------------------------------------
By: /s/Clive Bettles
--------------------------------------
Name: Clive Bettles
--------------------------------------
Title: Managing Director
--------------------------------------
SUNTRUST BANK, as Lender
By: /s/Charles J. Johnson
--------------------------------------
Name: Charles J. Johnson
--------------------------------------
Title: Managing Director
--------------------------------------
UNION BANK OF CALIFORNIA, N.A., as Lender
By: /s/Bruce Breslau
--------------------------------------
Name: Bruce Breslau
--------------------------------------
Title: Senior Vice President
--------------------------------------
GUARANTY BANK, as Lender
By: /s/Scott L. Brewer
--------------------------------------
Name: Scott L. Brewer
--------------------------------------
Title: Vice President
--------------------------------------
BANK OF THE WEST, as Lender
By: /s/Alyssa Lange
--------------------------------------
Name: Alyssa Lange
--------------------------------------
Title: Vice President
--------------------------------------
BANK OF AMERICA, N.A., as Lender
By: /s/Timothy H. Spanos
--------------------------------------
Name: Timothy H. Spanos
--------------------------------------
Title: Managing Director
--------------------------------------
81
CREDIT INDUSTRIEL ET COMMERCIAL, as Lender
By: /s/Brian O'Leary
--------------------------------------
Name: Brian O'Leary
--------------------------------------
Title: Vice President
--------------------------------------
By: /s/Sean Mounier
--------------------------------------
Name: Sean Mounier
--------------------------------------
Title: First Vice President
--------------------------------------
NATEXIS BANQUES POPULAIRES, as Lender
By: /s/Tefta Ghilaga
--------------------------------------
Name: Tefta Ghilaga
--------------------------------------
Title: Vice President
--------------------------------------
By: /s/Kristen Brainard
--------------------------------------
Name: Kristen Brainard
--------------------------------------
Title: Associate
--------------------------------------
U.S. BANK, NATIONAL ASSOCIATION, as
Syndication Agent and Lender
By: /s/G. Denton Folkes
--------------------------------------
Name: G. Denton Folkes
--------------------------------------
Title: Senior Vice President
--------------------------------------
82