RYAN'S FAMILY STEAK HOUSES, INC.
Note Purchase Agreement
Dated as of July 25, 2003
$100,000,000 4.65% Senior Notes due July 25, 2013
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TABLE OF CONTENTS
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1. AUTHORIZATION OF NOTES. 1
2. SALE AND PURCHASE OF NOTES. 1
3. CLOSING. 1
4. CONDITIONS TO CLOSING. 2
4.1. REPRESENTATIONS AND WARRANTIES. 2
4.2. PERFORMANCE; NO DEFAULT. 2
4.3. COMPLIANCE CERTIFICATES. 2
4.4. OPINIONS OF COUNSEL. 2
4.5. PURCHASE PERMITTED BY APPLICABLE LAW, ETC. 3
4.6. INTENIONALLY OMITTED.. 3
4.7. PAYMENT OF SPECIAL COUNSEL FEES 3
4.8. PRIVATE PLACEMENT NUMBER. 3
4.9. CHANGES IN CORPORATE STRUCTURE. 3
4.10. PROCEEDINGS AND DOCUMENTS. 3
4.11 SUBSIDIARY GUARANTEE; CONTRIBUTION AGREEMENT. 4
4.12. AMENDED AND RESTATED INTERCREDITOR AGREEMENT. 4
4.13 AMENDED AND RESTATED PLEDGE AGREEMENT. 4
4.14. AMENDMENT TO 2000 NOTE AGREEMENTS. 4
4.15. AMENDMENT TO CREDIT FACILITY 4
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY 5
5.1. ORGANIZATION; POWER AND AUTHORITY. 5
5.3. DISCLOSURE. 6
5.4. ORGANIZATION AND OWNERSHIP OF SHARES OF SUBSIDIARIES;
AFFILIATES. 6
5.5. FINANCIAL STATEMENTS. 7
5.6. COMPLIANCE WITH LAWS, OTHER INSTRUMENTS, ETC. 7
5.7. GOVERNMENTAL AUTHORIZATIONS, ETC. 7
5.8. LITIGATION; OBSERVANCE OF AGREEMENTS, STATUTES AND ORDERS. 7
5.9. TAXES. 8
5.10. TITLE TO PROPERTY; LEASES. 8
5.11. LICENSES, PERMITS, ETC 8
5.12. COMPLIANCE WITH ERISA 9
5.13. PRIVATE OFFERING BY THE COMPANY. 10
5.14. USE OF PROCEEDS; MARGIN REGULATIONS. 10
5.15. EXISTING DEBT AND LIENS; FUTURE LIENS. 10
5.16. FOREIGN ASSETS CONTROL REGULATIONS, ETC. 10
5.17. STATUS UNDER CERTAIN STATUTES. 11
5.18. ENVIRONMENTAL MATTERS. 11
5.19. COLLATERAL. 11
6. REPRESENTATIONS OF THE PURCHASER. 12
6.1. PURCHASE FOR INVESTMENT. 12
6.2. SOURCE OF FUNDS 12
7. INFORMATION AS TO COMPANY 13
7.1. FINANCIAL AND BUSINESS INFORMATION 13
7.2. OFFICER'S/ACCOUNTANT'S CERTIFICATE. 17
7.3. INSPECTION. 17
8. PREPAYMENT OF THE NOTES 18
8.1. REQUIRED PRINCIPAL PAYMENTS. 18
8.2. OPTIONAL PREPAYMENTS WITH MAKE-WHOLE AMOUNT 18
8.3. CHANGE IN CONTROL. 19
8.4. ALLOCATION OF PARTIAL PREPAYMENTS. 20
8.5. MATURITY; SURRENDER, ETC. 20
8.6. NO OTHER OPTIONAL PREPAYMENTS OR PURCHASE OF NOTES. 20
8.7. MAKE-WHOLE AMOUNT. 21
9. AFFIRMATIVE COVENANTS. 22
9.1. COMPLIANCE WITH LAW. 22
9.2. INSURANCE. 22
9.3. MAINTENANCE OF PROPERTIES. 22
9.4. PAYMENT OF TAXES AND CLAIMS. 23
9.5. CORPORATE EXISTENCE, ETC. 23
9.6. COVENANT TO SECURE NOTES EQUALLY. 23
9.7 COVENANT RELATING TO ADDITIONAL SUBSIDIARIES. 24
9.8 OWNERSHIP OF SUBSIDIARY GUARANTORS. 26
9.9 PARI PASSU RANKING. 26
9.10 COLLATERAL. 26
10. NEGATIVE COVENANTS. 27
10.1. CONSOLIDATED NET WORTH. 27
10.2. LEVERAGE RATIO. 28
10.3. PRIORITY DEBT. 28
10.4. FIXED CHARGE COVERAGE RATIO. 28
10.5. RESTRICTED PAYMENTS AND RESTRICTED INVESTMENTS. 28
10.6. LIENS 29
10.7. TRANSACTIONS WITH AFFILIATES. 30
10.8. MERGER, CONSOLIDATION, SALES OF SUBSTANTIALLY ALL ASSETS. 31
10.9. SALES OF ASSETS. 32
10.10.NATURE OF BUSINESS. 32
10.11.DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING
SUBSIDIARIES. 33
10.12.NO RESTRICTION ON AMENDMENTS OR PREPAYMENTS. 33
11. EVENTS OF DEFAULT. 34
12. REMEDIES ON DEFAULT, ETC. 38
12.1. ACCELERATION. 38
12.2. OTHER REMEDIES. 38
12.3. RESCISSION. 38
12.4. NO WAIVERS OR ELECTION OF REMEDIES, EXPENSES, ETC. 39
13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES. 39
13.1 REGISTRATION OF NOTES. 39
13.2. TRANSFER AND EXCHANGE OF NOTES. 39
13.3. REPLACEMENT OF NOTES. 40
14. PAYMENTS ON NOTES. 40
14.1. PLACE OF PAYMENT. 40
14.2. HOME OFFICE PAYMENT. 40
15. EXPENSES, ETC. 41
15.1. TRANSACTION EXPENSES. 41
15.2. SURVIVAL. 41
16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.41
17. AMENDMENT AND WAIVER. 42
17.1. REQUIREMENTS. 42
17.2. SOLICITATION OF HOLDERS OF NOTES 42
17.3. BINDING EFFECT, ETC. 43
17.4. NOTES HELD BY COMPANY, ETC. 43
18. NOTICES. 43
19. REPRODUCTION OF DOCUMENTS. 44
20. CONFIDENTIAL INFORMATION. 44
21. SUBSTITUTION OF PURCHASER. 45
22. MISCELLANEOUS. 45
22.1. SUCCESSORS AND ASSIGNS. 45
22.2. PAYMENTS DUE ON NON-BUSINESS DAYS. 45
22.3. SEVERABILITY. 46
22.4. CONSTRUCTION. 46
22.5. COUNTERPARTS. 46
22.6. GOVERNING LAW. 46
22.7. GENERAL INTEREST PROVISIONS. 46
22.8. WAIVER OF JURY TRIAL; CONSENT TO JURISDICTION; ETC. 47
22.9. RIGHT OF SET-OFF. 48
22.10. ACCEPTANCE OF INTERCREDITOR AGREEMENT. 49
22.11. FURTHER ASSURANCES. 49
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SCHEDULE A Information Relating to Purchasers
SCHEDULE B Defined Terms
SCHEDULE C Exclusions from Asset Sales
SCHEDULE D Payment Instructions at Closing
SCHEDULE 4.9 Changes in Corporate Structure
SCHEDULE 4.11 Initial Subsidiary Guarantors
SCHEDULE 5.3 Disclosure Materials
SCHEDULE 5.4 Subsidiaries of the Company and Ownership of
Subsidiary Stock
SCHEDULE 5.5 Financial Statements
SCHEDULE 5.8 Certain Litigation
SCHEDULE 5.11 Patents, etc.
SCHEDULE 5.14 Use of Proceeds
SCHEDULE 5.15 Existing Debt and Liens; Future Liens
EXHIBIT 1 Form of 4.65% Senior Note due July 25, 2013
EXHIBIT 4.4(a) Form of Opinion of Counsel to the Company
EXHIBIT 4.4(b) Form of Opinion of Special Counsel to the
Purchasers
EXHIBIT 4.11(a)Form of Subsidiary Guarantee
EXHIBIT 4.11(b)Form of Contribution Agreement
EXHIBIT 4.12 Form of Amended and Restated Intercreditor
Agreement
EXHIBIT 4.13 Form of Amended and Restated Pledge Agreement
EXHIBIT 9.7 Form of Joinder Agreement
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RYAN'S FAMILY STEAK HOUSES, INC.
405 Lancaster Avenue
Greer, South Carolina 29650
$100,000,000
4.65% Senior Notes due July 25, 2013
Dated as of July 25, 2003
TO EACH OF THE PURCHASERS LISTED IN
THE ATTACHED SCHEDULE A:
Ladies and Gentlemen:
RYAN'S FAMILY STEAK HOUSES, INC., a South Carolina
corporation (the "Company"), agrees with you as follows:
1. AUTHORIZATION OF NOTES.
The Company will authorize the issue and sale of $100,000,000
aggregate principal amount of its 4.65% Senior Notes due July 25,
2013 (the "Notes", such term to include any such notes issued in
substitution therefor pursuant to Section 13 of this Agreement).
The Notes shall be substantially in the form set out in Exhibit 1,
with such changes therefrom, if any, as may be approved by you and
the Company. Certain capitalized terms used in this Agreement are
defined in Schedule B; references to "Sections" are, unless
otherwise specified, to Sections of this Agreement; and references
to a "Schedule" or an "Exhibit" are, unless otherwise specified,
to a Schedule or an Exhibit attached to this Agreement.
2. SALE AND PURCHASE OF NOTES.
Subject to the terms and conditions of this Agreement, the
Company will issue and sell to you and you will purchase from the
Company, at the Closing provided for in Section 3, Notes in the
principal amount specified opposite your name in Schedule A at the
purchase price of 100% of the principal amount thereof.
3. CLOSING.
The sale and purchase of the Notes to be purchased by you
shall occur at the offices of King & Spalding LLP, 1185 Avenue of
the Americas, New York, New York, 10036-4003 at 10:00 a.m., New
York time, at a closing (the "Closing") on July 25, 2003. At the
Closing the Company will deliver to you the Notes to be purchased
by you in the form of a single Note (or such greater number of
Notes in denominations of at least $100,000 as you may request)
dated the date of the Closing and registered in your name (or in
the name of your nominee), against delivery by you to the Company
or its order of immediately available funds in the amount of the
purchase price therefor by wire transfer of immediately available
funds for the account of the Company to the account number
specified in Schedule D attached hereto. If at the Closing the
Company shall fail to tender such Notes to you as provided above
in this Section 3, or any of the conditions specified in Section 4
shall not have been fulfilled to your satisfaction, you shall, at
your election, be relieved of all further obligations under this
Agreement, without thereby waiving any rights you may have by
reason of such failure or such non-fulfillment
4. CONDITIONS TO CLOSING.
Your obligation to purchase and pay for the Notes to be sold
to you at the Closing is subject to the fulfillment to your
satisfaction, prior to or at the Closing, of the following
conditions:
4.1. Representations and Warranties.
The representations and warranties of the Company in this
Agreement shall be correct when made and at the time of the
Closing.
4.2. Performance; No Default.
The Company shall have performed and complied with all
agreements and conditions contained in this Agreement required to
be performed or complied with by it prior to or at the Closing and
after giving effect to the issue and sale of the Notes (and the
application of the proceeds thereof as contemplated by Schedule
5.14) no Default or Event of Default shall have occurred and be
continuing. Neither the Company nor any Subsidiary shall have
entered into any transaction since January 1, 2003 that would have
been prohibited by Section 10 hereof had such Section 10 applied
since such date.
4.3. Compliance Certificates.
(a) Company Officer's Certificate. The Company shall
have delivered to you an Officer's Certificate, dated the
date of the Closing, certifying that the conditions specified
in Sections 4.1, 4.2 and 4.9 have been fulfilled.
(b) Company Secretary's Certificate. The Company shall
have delivered to you a certificate certifying as to the
resolutions attached thereto and other corporate proceedings
relating to the authorization, execution and delivery of the
Notes, this Agreement and the other Financing Documents to
which the Company is a party.
(c) Subsidiary Guarantor Secretary's Certificate. Each
Subsidiary Guarantor shall have delivered to you a
certificate certifying as to the resolutions attached thereto
and other corporate proceedings relating to the
authorization, execution and delivery of the Financing
Documents to which such Subsidiary Guarantor is a party.
4.4. Opinions of Counsel.
You shall have received opinions in form and substance
satisfactory to you, dated the date of the Closing (a) from Wyche,
Burgess, Freeman & Parham, P.A., counsel for the Company,
substantially in the form set forth in Exhibit 4.4(a) and covering
such other matters incident to the transactions contemplated
hereby as you or your counsel may reasonably request (and the
Company hereby instructs its counsel to deliver such opinion to
you) and (b) from King & Spalding LLP, your special counsel in
connection with such transactions, substantially in the form set
forth in Exhibit 4.4(b) and covering such other matters incident
to such transactions as you may reasonably request.
4.5. Purchase Permitted By Applicable Law, etc.
On the date of the Closing your purchase of Notes shall
(a) be permitted by the laws and regulations of each jurisdiction
to which you are subject, without recourse to provisions (such as
Section 1405(a)(8) of the New York Insurance Law) permitting
limited investments by insurance companies without restriction as
to the character of the particular investment, (b) not violate any
applicable law or regulation (including, without limitation,
Regulations T, U or X of the Board of Governors of the Federal
Reserve System) and (c) not subject you to any tax, penalty or
liability under or pursuant to any applicable law or regulation,
which law or regulation was not in effect on the date hereof. If
requested by you, you shall have received an Officer's Certificate
certifying as to such matters of fact as you may reasonably
specify to enable you to determine whether such purchase is so
permitted.
4.6. Intentionally Omitted.
4.7. Payment of Special Counsel Fees
Without limiting the provisions of Section 15.1, the Company
shall have paid on or before the Closing the reasonable fees,
charges and disbursements of your special counsel referred to in
Section 4.4 to the extent reflected in a statement of such counsel
rendered to the Company at least one Business Day prior to the
Closing.
4.8. Private Placement Number.
A Private Placement number issued by Standard & Poor's CUSIP
Service Bureau (in cooperation with the Securities Valuation
Office of the National Association of Insurance Commissioners)
shall have been obtained for the Notes.
4.9. Changes in Corporate Structure.
Except as specified in Schedule 4.9, the Company shall not
have changed its jurisdiction of incorporation or been a party to
any merger or consolidation and shall not have succeeded to all or
any substantial part of the liabilities of any other entity, at
any time following the date of the most recent financial
statements referred to in Schedule 5.5.
4.10. Proceedings and Documents.
All corporate and other proceedings in connection with the
transactions contemplated by this Agreement and all documents and
instruments incident to such transactions shall be satisfactory to
you and your special counsel, and you and your special counsel
shall have received all such counterpart originals or certified or
other copies of such documents as you or they may reasonably
request.
4.11 Subsidiary Guarantee; Contribution Agreement.
(a) Subsidiary Guarantee. Each of the Subsidiaries
specified in Schedule 4.11 (collectively, together with each
other Subsidiary that shall from time to time become a party
to the Subsidiary Guarantee and their respective successors
and assigns, the "Subsidiary Guarantors"), which Subsidiaries
include all of the Domestic Subsidiaries existing on the date
of Closing and each other Subsidiary, if any, required by the
terms of the Credit Facility or the 2000 Note Agreements to
Guaranty the obligations arising under the Credit Facility or
the 2000 Note Agreements, as the case may be, shall have
executed and delivered a subsidiary guarantee agreement in
the form set forth in Exhibit 4.11(a) (as may be amended,
supplemented, restated or otherwise modified from time to
time, and collectively with any subsidiary guarantee
agreement executed pursuant to Section 9.7, the "Subsidiary
Guarantee").
(b) Contribution Agreement. The Company and each
Subsidiary Guarantor shall have executed and delivered a
contribution agreement in the form set forth in
Exhibit 4.11(b) (as may be amended, supplemented, restated or
otherwise modified from time to time, and collectively with
any contribution agreement executed pursuant to Section 9.7,
the "Contribution Agreement").
4.12. Amended and Restated Intercreditor Agreement.
An Amended and Restated Intercreditor and Collateral Agency
Agreement, substantially in the form of Exhibit 4.12 hereto, shall
have been duly executed and delivered by the Purchasers, the
holders of the 2000 Senior Notes, the Collateral Agent, the
Lenders and Bank of America, N.A., as administrative agent for the
Lenders, and acknowledged and agreed to by the Company and the
Subsidiary Guarantors, and a copy thereof evidencing such due
execution and delivery shall be delivered to you.
4.13. Amended and Restated Pledge Agreement.
The Company shall have delivered to you a fully executed copy
of an Amended and Restated Pledge Agreement, substantially in the
form of Exhibit 4.13 hereto, duly executed and delivered by the
Company, certain Subsidiary Guarantors and the Collateral Agent,
certified as true, complete and correct by a Responsible Officer
of the Company.
4.14. 2000 Note Agreements.
The Company shall have delivered to you a fully executed copy
of an amendment to the 2000 Note Agreements, certified as true,
complete and correct by a Responsible Officer of the Company, and
such amendment shall permit the transactions contemplated hereby
and otherwise be in form and substance reasonably satisfactory to
you.
4.15. Credit Facility.
The Company shall have delivered to you a fully executed copy
of an amendment to the documents evidencing the Credit Facility,
certified as true, complete and correct by a Responsible Officer
of the Company, and such amendment shall permit the transactions
contemplated hereby and otherwise be in form and substance
reasonably satisfactory to you.
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to you that:
5.1. Organization; Power and Authority.
Each of the Company and its Subsidiaries
(a) is a corporation or other legal entity duly
organized, validly existing and in good standing under the
laws of its jurisdiction of organization, and
(b) (i) is duly qualified as a foreign corporation and
is in good standing, or (ii) has made all filings necessary
to become so qualified and be in good standing, in each
jurisdiction in which such qualification is required by law,
other than those jurisdictions as to which the failure to be
so qualified or in good standing could not, individually or
in the aggregate, reasonably be expected to have a Material
Adverse Effect.
Each of the Company and its Subsidiaries has the corporate power
and authority to own or hold under lease the properties it
purports to own or hold under lease, to transact the business it
transacts and proposes to transact, to execute and deliver the
Financing Documents to which it is a party and to perform the
provisions thereof.
5.2. Authorization, etc.
(a) The Company. The Financing Documents to which the
Company is a party have been duly authorized by all necessary
corporate action on the part of the Company, and such
Financing Documents constitute legal, valid and binding
obligations of the Company, enforceable against the Company
in accordance with their respective terms, except as such
enforceability may be limited by (i) applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and
(ii) general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at
law).
(b) The Subsidiary Guarantors. The Financing Documents
to which each Subsidiary Guarantor is a party have been duly
authorized by all necessary corporate action on the part of
each such Subsidiary Guarantor, and such Financing Documents
constitute legal, valid and binding obligations of each such
Subsidiary Guarantor, enforceable against each such
Subsidiary Guarantor in accordance with their respective
terms, except as such enforceability may be limited by (i)
applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws affecting the enforcement of creditors'
rights generally and (ii) general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or at law).
5.3. Disclosure.
Except as disclosed in Schedule 5.3, this Agreement, the
documents, certificates or other writings delivered to you by or
on behalf of the Company in connection with the transactions
contemplated hereby and the financial statements listed in
Schedule 5.5, taken as a whole, do not contain any untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein not misleading in light
of the circumstances under which they were made. Except as
expressly described in Schedule 5.3, or in one of the documents,
certificates or other writings identified therein, or in the
financial statements listed in Schedule 5.5, since January 1, 2003
there has been no change in the financial condition, operations,
business, properties or prospects of the Company or any Subsidiary
except changes that individually or in the aggregate could not
reasonably be expected to have a Material Adverse Effect. There
is no fact known to the Company that could reasonably be expected
to have a Material Adverse Effect that has not been set forth
herein or in the other documents, certificates and other writings
delivered to you by or on behalf of the Company specifically for
use in connection with the transactions contemplated hereby.
5.4. Organization and Ownership of Shares of Subsidiaries;
Affiliates.
(a) Subsidiaries and Affiliates. Schedule 5.4 contains
(except as noted therein) complete and correct lists: (i) of
the Company's Subsidiaries, showing, as to each Subsidiary,
(A) the correct name thereof, (B) the jurisdiction of its
organization, (C) the number and percentage of shares of each
class of its Capital Stock or similar equity interests
outstanding owned (directly or indirectly) by the Company and
each other Subsidiary, and the number and effect, if
exercised, of all outstanding options, warrants, rights of
conversion or purchase and all other similar rights with
respect thereto, (D) whether such Subsidiary is a Domestic
Subsidiary or Foreign Subsidiary and (E) whether such
Subsidiary is a Material Subsidiary; (ii) of the Company's
Affiliates, other than Subsidiaries; and (iii) of the
Company's directors and senior officers.
(b) Capital Stock. All of the outstanding shares of
Capital Stock or similar equity interests of each Subsidiary
shown in Schedule 5.4 as being owned by the Company and its
Subsidiaries have been validly issued, are fully paid and non-
assessable and are owned by the Company or another Subsidiary
free and clear of any Lien (except for Liens permitted by
Section 10.6(i)). The Subsidiaries listed on Schedule 4.11
are the only Domestic Subsidiaries as of the date of Closing,
and no Foreign Subsidiaries exist as of the date of Closing.
(c) No Payment Limitations. No Subsidiary is a party
to, or otherwise subject to any legal restriction or any
agreement (other than this Agreement, the documents
evidencing the Credit Facility, the 2000 Note Agreements and
related documents, and customary limitations imposed by
corporate law statutes) restricting the ability of such
Subsidiary to pay dividends out of profits or make any other
similar distributions of profits to the Company or any of its
Subsidiaries that owns outstanding shares of Capital Stock or
similar equity interests of such Subsidiary.
5.5. Financial Statements.
The Company has delivered to each Purchaser copies of the
financial statements of the Company and its Subsidiaries listed on
Schedule 5.5. All of said financial statements (including in each
case the related schedules and notes) fairly present in all
material respects the consolidated financial position of the
Company and its Subsidiaries as of the respective dates specified
in such Schedule and the consolidated results of their operations
and cash flows for the respective periods so specified and have
been prepared in accordance with GAAP consistently applied
throughout the periods involved except as set forth in the notes
thereto (subject, in the case of any interim financial statements,
to normal year-end adjustments).
5.6. Compliance with Laws, Other Instruments, etc.
The execution, delivery and performance by the Company and
its Subsidiaries of the Financing Documents to which each such
Person is a party will not
(a) contravene, result in any breach of, or constitute
a default under, or result in the creation of any Lien in
respect of any property of the Company or any Subsidiary
under, any indenture, mortgage, deed of trust, loan, purchase
or credit agreement, lease, corporate charter or by-laws, or
any other agreement or instrument to which the Company or any
Subsidiary is bound or by which the Company or any Subsidiary
or any of their respective properties may be bound or
affected,
(b) conflict with or result in a breach of any of the
terms, conditions or provisions of any order, judgment,
decree, or ruling of any court, arbitrator or Governmental
Authority applicable to the Company or any Subsidiary, or
(c) violate any provision of any statute or other rule
or regulation of any Governmental Authority applicable to the
Company or any Subsidiary.
5.7. Governmental Authorizations, etc.
No consent, approval or authorization of, or registration,
filing or declaration with, any Governmental Authority is required
in connection with the execution, delivery or performance by the
Company or any Subsidiary of the Financing Documents to which it
is a party.
5.8. Litigation; Observance of Agreements, Statutes and
Orders.
(a) Litigation. Except as disclosed in Schedule 5.8,
there are no actions, suits or proceedings pending or, to the
knowledge of the Company, threatened against or affecting the
Company or any Subsidiary or any property of the Company or
any Subsidiary in any court or before any arbitrator of any
kind or before or by any Governmental Authority that,
individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.
(b) Defaults and Violations. Neither the Company nor
any Subsidiary is in default under any term of any agreement
or instrument to which it is a party or by which it is bound,
or any order, judgment, decree or ruling of any court,
arbitrator or Governmental Authority or is in violation of
any applicable law, ordinance, rule or regulation (including
without limitation Environmental Laws) of any Governmental
Authority, which default or violation, individually or in the
aggregate, could reasonably be expected to have a Material
Adverse Effect.
5.9. Taxes.
The Company and its Subsidiaries have filed all tax returns
that are required to have been filed in any jurisdiction, and have
paid all taxes shown to be due and payable on such returns and all
other taxes and assessments levied upon them or their properties,
assets, income or franchises, to the extent such taxes and
assessments have become due and payable and before they have
become delinquent, except for any taxes and assessments (a) the
amount of which is not individually or in the aggregate Material
or (b) the amount, applicability or validity of which is currently
being contested in good faith by appropriate proceedings and with
respect to which the Company or a Subsidiary, as the case may be,
has established adequate reserves in accordance with GAAP. The
Company knows of no basis for any other tax or assessment that
could reasonably be expected to have a Material Adverse Effect.
The charges, accruals and reserves on the books of the Company and
its Subsidiaries in respect of Federal, state or other taxes for
all fiscal periods are adequate. The Federal income tax
liabilities of the Company and its Subsidiaries have been audited
by the Internal Revenue Service and paid for all fiscal years up
to and including the fiscal year ended December 30, 1998.
5.10. Title to Property; Leases.
The Company and its Subsidiaries have good and sufficient
title to their respective properties that individually or in the
aggregate are Material, including all such properties reflected in
the most recent audited balance sheet referred to in Section 5.5
or purported to have been acquired by the Company or any
Subsidiary after said date (except as sold or otherwise disposed
of in the ordinary course of business), in each case free and
clear of Liens prohibited by this Agreement. All leases that
individually or in the aggregate are Material are valid and
subsisting and are in full force and effect in all material
respects.
5.11. Licenses, Permits, etc.
Except as disclosed in Schedule 5.11:
(a) the Company and its Subsidiaries own or possess all
licenses, permits, franchises, authorizations, patents,
copyrights, service marks, trademarks and trade names, or
rights thereto, that individually or in the aggregate are
Material, without known conflict with the rights of others;
(b) no product of the Company infringes in any material
respect any license, permit, franchise, authorization,
patent, copyright, service mark, trademark, trade name or
other right owned by any other Person; and
(c) there is no Material violation by any Person of any
right of the Company or any of its Subsidiaries with respect
to any patent, copyright, service mark, trademark, trade name
or other right owned or used by the Company or any of its
Subsidiaries.
5.12. Compliance with ERISA.
(a) The Company and each ERISA Affiliate have operated
and administered each Plan in compliance with all applicable
laws except for such instances of noncompliance as have not
resulted in and could not reasonably be expected to result in
a Material Adverse Effect. Neither the Company nor any ERISA
Affiliate has incurred any liability pursuant to Title I or
IV of ERISA or the penalty or excise tax provisions of the
Code relating to employee benefit plans (as defined in
Section 3 of ERISA), and no event, transaction or condition
has occurred or exists that could reasonably be expected to
result in the incurrence of any such liability by the Company
or any ERISA Affiliate, or in the imposition of any Lien on
any of the rights, properties or assets of the Company or any
ERISA Affiliate, in either case pursuant to Title I or IV of
ERISA or to such penalty or excise tax provisions or to
Section 401(a)(29) or 412 of the Code, other than such
liabilities or Liens as would not be individually or in the
aggregate Material.
(b) The present value of the aggregate benefit
liabilities under each of the Plans (other than Multiemployer
Plans), determined as of the end of such Plan's most recently
ended plan year on the basis of the actuarial assumptions
specified for funding purposes in such Plan's most recent
actuarial valuation report, did not exceed the aggregate
current value of the assets of such Plan allocable to such
benefit liabilities, in the case of any single Plan, and in
the aggregate for all Plans, by more than $3,000,000. The
term "benefit liabilities" has the meaning specified in
section 4001 of ERISA and the terms "current value" and
"present value" have the meaning specified in section 3 of
ERISA.
(c) The Company and its ERISA Affiliates have not
incurred withdrawal liabilities (and are not subject to
contingent withdrawal liabilities) under section 4201 or 4204
of ERISA in respect of Multiemployer Plans that individually
or in the aggregate are Material.
(d) The expected post-retirement benefit obligation
(determined as of the last day of the Company's most recently
ended fiscal year in accordance with Financial Accounting
Standards Board Statement No. 106, without regard to
liabilities attributable to continuation coverage mandated by
section 4980B of the Code) of the Company and its
Subsidiaries is not Material.
(e) The execution and delivery of this Agreement and
the issuance and sale of the Notes hereunder will not involve
any transaction that is subject to the prohibitions of
section 406 of ERISA or in connection with which a tax could
be imposed pursuant to section 4975(c)(1)(A)-(D) of the Code.
The representation by the Company in the first sentence of
this Section 5.12(e) is made in reliance upon and subject to
(i) the accuracy of your representation in Section 6.2 as to
the sources of the funds used to pay the purchase price of
the Notes to be purchased by you and (ii) the assumption,
made solely for the purpose of making such representation,
that Department of Labor Prohibited Transaction Exemption 95-
60 (60 FR 35925) with respect to prohibited transactions
remains valid in the circumstances of the transactions
contemplated herein.
5.13. Private Offering by the Company.
Neither the Company nor any Person acting on its behalf has
offered the Notes or any similar securities for sale to, or
solicited any offer to buy any of the same from, or otherwise
approached or negotiated in respect thereof with, any Person other
than you and not more than 75 other Institutional Investors (as
defined in paragraph (c) of the definition of such term), each of
which has been offered the Notes at a private sale for investment.
Neither the Company nor any Person acting on its behalf has taken,
or will take, any action that would subject the issuance or sale
of the Notes to the registration requirements of Section 5 of the
Securities Act.
5.14. Use of Proceeds; Margin Regulations.
The Company will apply the proceeds of the sale of the Notes
as set forth in Schedule 5.14. No part of the proceeds from the
sale of the Notes hereunder will be used, directly or indirectly,
for the purpose of buying or carrying any margin stock within the
meaning of Regulation U of the Board of Governors of the Federal
Reserve System (12 CFR 221), or for the purpose of buying or
carrying or trading in any securities under such circumstances as
to involve the Company in a violation of Regulation X of said
Board (12 CFR 224) or to involve any broker or dealer in a
violation of Regulation T of said Board (12 CFR 220). Margin
stock does not constitute more than 5% of the value of the
consolidated assets of the Company and its Subsidiaries and the
Company does not have any present intention that margin stock will
constitute more than 5% of the value of such assets. As used in
this Section, the terms "margin stock" and "purpose of buying or
carrying" shall have the meanings assigned to them in said
Regulation U.
5.15. Existing Debt and Liens; Future Liens.
(a) Existing Debt and Liens. Except as described
therein, Schedule 5.15 sets forth a complete and correct list
of all outstanding Debt of the Company and its Subsidiaries
as of the date hereof (indicating as to any such Debt the
collateral, if any, securing such Debt). Neither the Company
nor any Subsidiary is in default and no waiver of default is
currently in effect, in the payment of any principal or
interest on any Debt of the Company or such Subsidiary and no
event or condition exists with respect to any Debt of the
Company or any Subsidiary that would permit (or that with
notice or the lapse of time, or both, would permit) one or
more Persons to cause such Debt to become due and payable
before its stated maturity or before its regularly scheduled
dates of payment.
(b) Future Liens. Except as disclosed in Schedule
5.15, neither the Company nor any Subsidiary has agreed or
consented to cause or permit in the future (upon the
happening of a contingency or otherwise) any of its property,
whether now owned or hereafter acquired, to be subject to a
Lien not permitted by Section 10.6.
5.16. Foreign Assets Control Regulations, etc.
Neither the sale of the Notes by the Company hereunder nor
its use of the proceeds thereof will violate the Trading with the
Enemy Act, as amended, or any of the foreign assets control
regulations of the United States Treasury Department (31 CFR,
Subtitle B, Chapter V, as amended) or any enabling legislation or
executive order relating thereto.
5.17. Status under Certain Statutes.
Neither the Company nor any Subsidiary is subject to
regulation under the Investment Company Act of 1940, as amended,
the Public Utility Holding Company Act of 1935, as amended, the
Transportation Acts, as amended, or the Federal Power Act, as
amended.
5.18. Environmental Matters.
Neither the Company nor any Subsidiary has knowledge of any
claim or has received any notice of any claim, and no proceeding
has been instituted raising any claim against the Company or any
of its Subsidiaries or any of their respective real properties now
or formerly owned, leased or operated by any of them or other
assets, alleging any damage to the environment or violation of any
Environmental Laws, except, in each case, such as could not
reasonably be expected to result in a Material Adverse Effect.
Except as otherwise disclosed to you in writing:
(a) neither the Company nor any Subsidiary has
knowledge of any facts which would give rise to any claim,
public or private, of violation of Environmental Laws or
damage to the environment emanating from, occurring on or in
any way related to real properties now or formerly owned,
leased or operated by any of them or to other assets or their
use, except, in each case, such as could not reasonably be
expected to result in a Material Adverse Effect;
(b) neither the Company nor any of its Subsidiaries has
stored any Hazardous Materials on real properties now or
formerly owned, leased or operated by any of them and has not
disposed of any Hazardous Materials in a manner contrary to
any Environmental Laws in each case in any manner that could
reasonably be expected to result in a Material Adverse
Effect; and
(c) all buildings on all real properties now owned,
leased or operated by the Company or any of its Subsidiaries
are in compliance with applicable Environmental Laws, except
where failure to comply could not reasonably be expected to
result in a Material Adverse Effect.
5.19. Collateral.
The Pledge Agreement is in full force and effect, has not
been amended or modified since the execution and delivery thereof
except as provided in Section 4.13 and creates a valid and
perfected first priority Lien in and to the Collateral in favor of
the Collateral Agent, for the benefit of the Secured Parties
(including without limitation the Purchasers), subject to no
Liens, except to the extent permitted by Section 10.6. All
certificates and documents constituting Collateral have been
delivered to the Collateral Agent, together with all related
undated blank stock powers.
6. REPRESENTATIONS OF THE PURCHASER.
6.1. Purchase for Investment.
You represent that you are purchasing the Notes for your own
account or for one or more separate accounts maintained by you or
for the account of one or more pension or trust funds and not with
a view to the distribution thereof, provided that the disposition
of your or their property shall at all times be within your or
their control. You understand that the Notes have not been
registered under the Securities Act and may be resold only if
registered pursuant to the provisions of the Securities Act or if
an exemption from registration is available, except under
circumstances where neither such registration nor such an
exemption is required by law, and that the Company is not required
to register the Notes. You represent that you (or any advisor on
your behalf) are experienced in evaluating and investing in
companies such as the Company, have such knowledge and experience
in financial and business matters that you are capable of
evaluating the merits and risks of your investment and have the
ability to bear the economic risks of your investment. You
further represent that you are a "qualified institutional buyer"
as such term is defined in Rule 144A promulgated under the
Securities Act.
6.2. Source of Funds
You represent that at least one of the following statements
is an accurate representation as to each source of funds (a
"Source") to be used by you to pay the purchase price of the Notes
to be purchased by you hereunder:
(a) General Account -- the Source is an "insurance
company general account" as defined in Department of Labor
Prohibited Transaction Exemption ("PTE") 95-60 and in respect
thereof you represent that there is no "employee benefit
plan" (as defined in section 3(3) of ERISA and section
4975(e)(1) of the Code, treating as a single plan all plans
maintained by the same employer or employee organization or
affiliate thereof) with respect to which the amount of the
general account reserves and liabilities of all contracts
held by or on behalf of such plan exceed 10% of the total
reserves and liabilities of such general account (exclusive
of separate account liabilities) plus surplus, as set forth
in the National Association of Insurance Commissioners'
Annual Statement filed with your state of domicile;
(b) Separate Account -- the Source is either
(i) an insurance company pooled separate account,
within the meaning of PTE 90-1, or
(ii) a bank collective investment fund, within the
meaning of the PTE 91-38,
and, except as you have disclosed to the Company in writing
pursuant to this Section 6.2(b), no employee benefit plan or
group of plans maintained by the same employer or employee
organization beneficially owns more than 10% of all assets
allocated to such pooled separate account or collective
investment fund;
(c) QPAM -- the Source constitutes assets of an
"investment fund" (within the meaning of Part V of the QPAM
Exemption) in respect of which each of the following is true:
(i) such investment fund is managed by a
"qualified professional asset manager" or "QPAM" (within
the meaning of Part V of the QPAM Exemption),
(ii) no employee benefit plan's assets that are
included in such investment fund, when combined with the
assets of all other employee benefit plans established
or maintained by the same employer or by an affiliate
(within the meaning of section V(c)(1) of the QPAM
Exemption) of such employer or by the same employee
organization and managed by such QPAM, exceed 20% of the
total client assets managed by such QPAM,
(iii) the conditions of Part I(c) and Part I(g)
of the QPAM Exemption are satisfied, neither the QPAM
nor a Person controlling or controlled by the QPAM
(applying the definition of "control" in Section V(e) of
the QPAM Exemption) owns a 5% or more interest in the
Company, and
(iv) (A) the identity of such QPAM, and
(B) the names of all employee benefit plans
whose assets are included in such investment fund
have been disclosed to the Company in writing pursuant
to this Section 6.2(c);
(d) Government Plan, etc. -- the Source is a
governmental plan;
(e) Identified Plans -- the Source is one or more
employee benefit plans, or a separate account or trust fund
comprised of one or more employee benefit plans, each of
which has been identified to the Company in writing pursuant
to this Section 6.2(e); or
(f) Exempt Plans -- the Source does not include the
assets of any employee benefit plan that is subject to Title
I of ERISA or any "plan" which is subject to Section 4975 of
the Code.
As used in this Section 6.2, the terms "employee benefit plan",
"governmental plan" and "separate account" shall have the
respective meanings assigned to such terms in section 3 of ERISA.
7. INFORMATION AS TO COMPANY
7.1. Financial and Business Information
The Company shall deliver to each holder of Notes that is an
Institutional Investor:
(a) Quarterly Statements -- within 45 days after the
end of each quarterly fiscal period in each fiscal year of
the Company (other than the last quarterly fiscal period of
each such fiscal year), copies of,
(i) a consolidated balance sheet of the Company
and its Subsidiaries as at the end of such quarter,
setting forth in comparative form the figures for the
previous fiscal year-end, and
(ii) consolidated statements of earnings and cash
flows of the Company and its Subsidiaries, for such
quarter and (in the case of the second and third
quarters) for the portion of the fiscal year ending with
such quarter, setting forth in each case in comparative
form the figures for the corresponding periods in the
previous fiscal year,
all in reasonable detail, prepared in accordance with GAAP
applicable to quarterly financial statements generally, and
certified by a Senior Financial Officer as fairly presenting,
in all material respects, the financial position of the
companies being reported on and their results of operations
and cash flows, subject to changes resulting from year-end
adjustments, provided that delivery within the time period
specified above of copies of the Company's Quarterly Report
on Form 10-Q prepared in compliance with the requirements
therefor and filed with the Securities and Exchange
Commission shall be deemed to satisfy the requirements of
this Section 7.1(a);
(b) Annual Statements -- within 90 days after the end
of each fiscal year of the Company, copies of,
(i) a consolidated balance sheet of the Company
and its Subsidiaries, as at the end of such year, and
(ii) consolidated statements of earnings and cash
flows of the Company and its Subsidiaries, for such
year,
setting forth in each case in comparative form the figures
for the previous fiscal year, all in reasonable detail,
prepared in accordance with GAAP, and accompanied by an
opinion thereon of independent certified public accountants
of recognized national standing, which opinion shall state
that such financial statements present fairly, in all
material respects, the financial position of the companies
being reported upon and their results of operations and cash
flows and have been prepared in conformity with GAAP, and
that the examination of such accountants in connection with
such financial statements has been made in accordance with
generally accepted auditing standards, and that such audit
provides a reasonable basis for such opinion in the
circumstances, provided that the delivery within the time
period specified above of the Company's Annual Report on Form
10-K for such fiscal year (together with the Company's annual
report to shareholders, if any, prepared pursuant to Rule 14a-
3 under the Exchange Act) prepared in accordance with the
requirements therefor and filed with the Securities and
Exchange Commission, together with the accountant's
certificate described in Section 7.2(b), shall be deemed to
satisfy the requirements of this Section 7.1(b);
(c) SEC and Other Reports -- promptly upon their
becoming available, one copy of (i) each financial statement,
report, notice or proxy statement sent by the Company or any
Subsidiary to public securities holders generally, and
(ii) each regular or periodic report, each registration
statement (without exhibits except as expressly requested by
such holder), and each prospectus and all amendments thereto
filed by the Company or any Subsidiary with the Securities
and Exchange Commission and of all press releases and other
statements made available generally by the Company or any
Subsidiary to the public concerning developments that are
Material;
(d) Notice of Default or Event of Default -- promptly,
and in any event within five Business Days after a
Responsible Officer becoming aware of the existence of any
Default or Event of Default or that any Person has given any
notice or taken any action with respect to a claimed default
hereunder or that any Person has given any notice or taken
any action with respect to a claimed default of the type
referred to in Section 11(f), a written notice specifying the
nature and period of existence thereof and what action the
Company is taking or proposes to take with respect thereto;
(e) ERISA Matters -- promptly, and in any event within
five days after a Responsible Officer becoming aware of any
of the following, a written notice setting forth the nature
thereof and the action, if any, that the Company or an ERISA
Affiliate proposes to take with respect thereto:
(i) with respect to any Plan, any reportable
event, as defined in section 4043(b) of ERISA and the
regulations thereunder, for which notice thereof has not
been waived pursuant to such regulations as in effect on
the date hereof; or
(ii) the taking by the PBGC of steps to institute,
or the threatening by the PBGC of the institution of,
proceedings under section 4042 of ERISA for the
termination of, or the appointment of a trustee to
administer, any Plan, or the receipt by the Company or
any ERISA Affiliate of a notice from a Multiemployer
Plan that such action has been taken by the PBGC with
respect to such Multiemployer Plan; or
(iii) any event, transaction or condition that
could result in the incurrence of any liability by the
Company or any ERISA Affiliate pursuant to Title I or IV
of ERISA or the penalty or excise tax provisions of the
Code relating to employee benefit plans, or in the
imposition of any Lien on any of the rights, properties
or assets of the Company or any ERISA Affiliate pursuant
to Title I or IV of ERISA or such penalty or excise tax
provisions, if such liability or Lien, taken together
with any other such liabilities or Liens then existing,
could reasonably be expected to have a Material Adverse
Effect;
(f) Notices from Governmental Authority -- promptly,
and in any event within 30 days of receipt thereof, copies of
any notice to the Company or any Subsidiary from any Federal
or state Governmental Authority relating to any order,
ruling, statute or other law or regulation that could
reasonably be expected to have a Material Adverse Effect;
(g) Actions, Proceedings - promptly after a Responsible
Officer becomes aware of the commencement thereof, notice of
any action or proceeding relating to the Company or any
Subsidiary in any court or before any Governmental Authority
or arbitration board or tribunal as to which there is a
reasonable possibility of an adverse determination and that,
if adversely determined, could reasonably be expected to have
a Material Adverse Effect;
(h) Management Reports -- promptly upon receipt
thereof, a copy of each report (including, without
limitation, management letters) submitted to the Company or
any Subsidiary by independent accountants in connection with
any annual audit made by them of the books of the Company or
any Subsidiary or special audit by them of the books of the
Company;
(i) Amendments to Credit Facility and 2000 Note
Agreements -- promptly, copies of any amendments,
modifications or supplements to any agreement or instrument
evidencing or governing the Credit Facility, the 2000 Note
Agreements or any agreement or instrument related thereto;
(j) Annual Business Plan and Budgets -- at least 30
days prior to the end of each fiscal year of the Company,
beginning with the fiscal year ending December 31, 2003, a
projected profit and loss statement of the Obligors and their
Subsidiaries on a consolidated basis for the next fiscal
year;
(k) Information Provided to Lenders - at any time
during the existence of any "Default" or "Event of Default"
under and as defined in agreement or instrument evidencing or
governing the Credit Facility or the 2000 Note Agreements, or
during the existence of any Default or Event of Default,
promptly upon their becoming available, copies of any
statement, report, notice or certificate furnished to the
Lenders or any agent for the Lenders under the Credit
Facility, or to the holders of the 2000 Senior Notes to the
extent that the information contained therein has not already
been delivered to each holder of Notes; and
(l) Notices provided to Noteholders and Lenders. At
the time of delivery to the holders of the 2000 Senior Notes
pursuant to the 2000 Note Agreements, copies of any notice
provided to such holders (including without limitation any
notice required pursuant to Section 8.3 of the 2000 Note
Agreements) pursuant to the 2000 Note Agreements, to the
extent any such notice has not already been delivered to the
Purchasers pursuant to the terms hereof or otherwise, and at
the time of delivery to the lenders providing the Credit
Facility pursuant to the Credit Documents, copies of any
notice provided to such lenders pursuant to the Credit
Documents,
(m) Requested Information -- with reasonable
promptness, such other data and information relating to the
business, operations, affairs, financial condition, assets or
properties of the Company or any of its Subsidiaries or
relating to the ability of the Company to perform its
obligations hereunder and under the Notes as from time to
time may be reasonably requested by any such holder of Notes,
including, without limitation, any information regarding the
Company required to satisfy the requirements of 17 C.F.R.
230.144A, as amended from time to time, in connection with
any contemplated transfer of the Notes.
7.2. Officer's/Accountant's Certificate.
(a) Officer's Certificate. Each set of financial
statements delivered to a holder of Notes pursuant to Section
7.1(a) or Section 7.1(b) shall be accompanied by a
certificate of a Senior Financial Officer setting forth:
(i) Covenant Compliance -- the information
(including detailed calculations) required in order to
establish whether the Company was in compliance with the
requirements of Sections 10.1 through 10.6, inclusive,
and Section 10.9, during the quarterly or annual period
covered by the statements then being furnished
(including with respect to each such Section, where
applicable, the calculations of the maximum or minimum
amount, ratio or percentage, as the case may be,
permissible under the terms of such Sections, and the
calculation of the amount, ratio or percentage then in
existence); and
(ii) Event of Default -- a statement that such
officer has reviewed the relevant terms hereof and has
made, or caused to be made, under his or her
supervision, a review of the transactions and conditions
of the Company and its Subsidiaries from the beginning
of the quarterly or annual period covered by the
statements then being furnished to the date of the
certificate and that such review shall not have
disclosed the existence during such period of any
condition or event that constitutes a Default or an
Event of Default or, if any such condition or event
existed or exists (including, without limitation, any
such event or condition resulting from the failure of
the Company or any Subsidiary to comply with any
Environmental Law), specifying the nature and period of
existence thereof and what action the Company shall have
taken or proposes to take with respect thereto; and
(iii) Subsidiaries - a list of all of the
Company's Subsidiaries on the date of such financial
statements, specifying as to each whether it is (A) a
Domestic Subsidiary or Foreign Subsidiary and (B) a
Material Subsidiary.
(b) Accountant's Certificate. Together with each
delivery of financial statements required by Section 7.1(b),
the Company will deliver to each holder of Notes a
certificate of the accountants preparing such statements
stating that, in making the audit necessary for their report
on such financial statements, they have obtained no knowledge
of any Event of Default or Default, or, if they have obtained
knowledge of any Event of Default or Default, specifying the
nature and period of existence thereof. Such accountants,
however, shall not be liable to anyone for any failure to
obtain knowledge of any Event of Default or Default unless
such accountants (i) should have obtained knowledge thereof
in the course of an audit conducted in accordance with
generally accepted auditing standards or (ii) did not conduct
such an audit.
7.3. Inspection.
The Company shall permit the representatives of each holder
of Notes that is an Institutional Investor:
(a) No Default -- if no Default or Event of Default
then exists, at the expense of such holder and upon
reasonable prior notice to the Company, to visit the
principal executive office of the Company, to discuss the
affairs, finances and accounts of the Company and its
Subsidiaries with the Company's officers, and (with the
consent of the Company, which consent will not be
unreasonably withheld) its independent public accountants,
and (with the consent of the Company, which consent will not
be unreasonably withheld) to visit the other offices and
properties of the Company and each Subsidiary, all at such
reasonable times as may be reasonably requested in writing
(but in any event no more frequently than once per fiscal
quarter); and
(b) Default -- if a Default or Event of Default then
exists, at the expense of the Company to visit and inspect
any of the offices or properties of the Company or any
Subsidiary, to examine all their respective books of account,
records, reports and other papers, to make copies and
extracts therefrom, and to discuss their respective affairs,
finances and accounts with their respective officers and
independent public accountants (and by this provision the
Company authorizes said accountants to discuss the affairs,
finances and accounts of the Company and its Subsidiaries),
all at such times and as often as may be requested.
8. PREPAYMENT OF THE NOTES
8.1. Required Principal Payments.
Until the Notes are paid in full, the Company shall apply to
the payment of the Notes, at par and without payment of the Make-
Whole Amount, the sum of $14,285,714.29 (or such lesser principal
amount of the Notes as shall then be outstanding) on July 25 in
each of the years 2007, 2008, 2009, 2010, 2011, 2012 and 2013,
together with interest accrued thereon to the date of payment;
provided that upon any partial payment of the Notes pursuant to
Section 8.2 the principal amount of each required payment of the
Notes becoming due under this Section 8.1 on and after the date of
such payment shall be reduced in the same proportion as the
aggregate unpaid principal amount of the Notes is reduced as a
result of such payment.
8.2. Optional Prepayments with Make-Whole Amount
The Company may, at its option, upon notice as provided
below, prepay at any time all, or from time to time any part of,
the Notes, in multiples of $1,000,000 in the case of a partial
prepayment, at 100% of the principal amount so prepaid, plus the
Make-Whole Amount determined for the prepayment date with respect
to such principal amount. The Company will give each holder of
Notes written notice of each optional prepayment under this
Section 8.2 not less than 30 days and not more than 60 days prior
to the date fixed for such prepayment. Each such notice shall
specify such date, the aggregate principal amount of the Notes to
be prepaid on such date, the principal amount of each Note held by
such holder to be prepaid (determined in accordance with Section
8.4), and the interest to be paid on the prepayment date with
respect to such principal amount being prepaid, and shall be
accompanied by a certificate of a Senior Financial Officer as to
the estimated Make-Whole Amount due in connection with such
prepayment (calculated as if the date of such notice were the date
of the prepayment), setting forth the details of such computation.
Two Business Days prior to such prepayment, the Company shall
deliver to each holder of Notes a certificate of a Senior
Financial Officer specifying the calculation of such Make-Whole
Amount as of the specified prepayment date.
8.3. Change in Control.
(a) Notice of Change in Control or Control Event. The
Company will, prior to the occurrence of any Change in
Control or Control Event, if possible, but in no event later
than the date of such occurrence, give written notice of such
Change in Control or Control Event (including a description
of the terms thereof in sufficient detail to enable a holder
of Notes to evaluate the merits thereof) to each holder of
Notes unless notice in respect of such Change in Control (or
the Change in Control contemplated by such Control Event)
shall have been given pursuant to Section 8.3(b). If a
Change in Control has occurred, such notice shall contain and
constitute an offer to prepay Notes as described in Section
8.3(c) and shall be accompanied by the certificate described
in Section 8.3(f).
(b) Condition to Company Action. The Company will not
take any action that consummates or finalizes a Change in
Control unless at least 30 days prior to such action it shall
have given to each holder of Notes written notice (including
a description of the terms of such Change in Control in
sufficient detail to enable a holder of Notes to evaluate the
merits thereof) containing and constituting an offer to
prepay Notes as described in Section 8.3(c), accompanied by
the certificate described in Section 8.3(f).
(c) Offer to Prepay Notes. The offer to prepay Notes
contemplated by Section 8.3(a) and Section 8.3(b) shall be an
offer to prepay, in accordance with and subject to this
Section 8.3, all, but not less than all, the Notes held by
each holder (in this case only, "holder" in respect of any
Note registered in the name of a nominee for a disclosed
beneficial owner shall mean such beneficial owner) on the
date of the Change in Control referred to in such Sections or
on any other day within 60 days thereafter.
(d) Acceptance. A holder of Notes may accept the offer
to prepay made pursuant to this Section 8.3 by causing a
notice of such acceptance to be delivered to the Company at
any time within 60 days following the later of (x)
consummation of a Change in Control or (y) such holder's
receipt of the Company's notice thereof. A failure by a
holder of Notes to respond to an offer to prepay made
pursuant to this Section 8.3 shall be deemed to constitute an
acceptance of such offer by such holder on such 60th day.
(e) Prepayment. Prepayment of the Notes of any holder
to be prepaid pursuant to this Section 8.3 shall be at 101%
of the principal amount of such Notes, together with interest
on such Notes accrued to the date of prepayment. The
prepayment shall be made on the date the Company receives
notice of acceptance of its prepayment offer from such
holder.
(f) Officer's Certificate. Each offer to prepay the
Notes pursuant to this Section 8.3 shall be accompanied by a
certificate, executed by a Senior Financial Officer of the
Company and dated the date of such offer, specifying:
(i) the expected date of consummation of the
Change in Control;
(ii) that such offer is made pursuant to this
Section 8.3;
(iii) the principal amount of each Note offered
to be prepaid;
(iv) the last date upon which the offer can be
accepted or rejected, and setting forth the consequences
of failing to provide an acceptance or rejection, as
provided in Section 8.3(d);
(v) that such prepayment shall be at 101% of the
principal amount of such Notes being prepaid, setting
forth the details of such computation;
(vi) the interest that would be due on each Note
offered to be prepaid, accrued to the date of
prepayment;
(vii) that the conditions of this Section 8.3
have been fulfilled; and
(viii) in reasonable detail, the nature and date
or proposed date of the Change in Control.
8.4. Allocation of Partial Prepayments.
In the case of each required payment of the Notes pursuant to
Section 8.1 and in the case of each partial prepayment of the
Notes pursuant to Section 8.2, the principal amount of the Notes
to be paid shall be allocated among all of the Notes at the time
outstanding in proportion, as nearly as practicable, to the
respective unpaid principal amounts thereof not theretofore called
for payment.
8.5. Maturity; Surrender, etc.
In the case of each prepayment of Notes pursuant to this
Section 8 (except as provided in Section 8.3(f)), the principal
amount of each Note to be prepaid shall mature and become due and
payable on the date fixed for such prepayment, together with
interest on such principal amount accrued to such date and the
applicable Make-Whole Amount, if any. From and after such date,
unless the Company shall fail to pay such principal amount when so
due and payable, together with the interest and Make-Whole Amount,
if any, as aforesaid, interest on such principal amount shall
cease to accrue. Any Note paid or prepaid in full shall be
surrendered to the Company and cancelled and shall not be
reissued, and no Note shall be issued in lieu of any prepaid
principal amount of any Note.
8.6. No Other Optional Prepayments or Purchase of Notes.
The Company will not and will not permit any Affiliate to,
purchase, redeem, prepay or otherwise acquire, directly or
indirectly, any of the outstanding Notes except upon the payment
or prepayment of the Notes in accordance with the terms of this
Section 8. The Company will promptly cancel all Notes acquired by
it or any Affiliate pursuant to any payment, prepayment or
purchase of Notes pursuant to any provision of this Section 8 and
no Notes may be issued in substitution or exchange for any such
Notes.
8.7. Make-Whole Amount.
The term "Make-Whole Amount" means, with respect to any Note,
an amount equal to the excess, if any, of the Discounted Value of
the Remaining Scheduled Payments with respect to the Called
Principal of such Note over the amount of such Called Principal,
provided that the Make-Whole Amount may in no event be less than
zero. For the purposes of determining the Make-Whole Amount, the
following terms have the following meanings:
"Called Principal" means, with respect to any Note, the
principal of such Note that is to be prepaid pursuant to
Section 8.2 or has become or is declared to be immediately
due and payable pursuant to Section 12.1, as the context
requires.
"Discounted Value" means, with respect to the Called
Principal of any Note, the amount obtained by discounting all
Remaining Scheduled Payments with respect to such Called
Principal from their respective scheduled due dates to the
Settlement Date with respect to such Called Principal, in
accordance with accepted financial practice and at a discount
factor (applied on the same periodic basis as that on which
interest on the Notes is payable) equal to the Reinvestment
Yield with respect to such Called Principal.
"Reinvestment Yield" means, with respect to the Called
Principal of any Note, 0.50% over the yield to maturity
implied by (a) the yields reported for actively traded U.S.
Treasury securities having a maturity equal to the Remaining
Average Life of such Called Principal as of such Settlement
Date, as of 10:00 A.M. (New York City time) on the second
Business Day preceding the Settlement Date with respect to
such Called Principal, on the Treasury Yield Monitor page of
Standard & Poor's MMS ? Treasury Market Insight (or, if
Standard & Poor's shall cease to report such yields in MMS ?
Treasury Market Insight or shall cease to be Prudential
Capital Group's customary source of information for
calculating yield-maintenance amounts on privately placed
notes, then such source as is then Prudential Capital Group's
customary source of information) or (b) if such yields are
not reported as of such time or the yields reported as of
such time are not ascertainable, the Treasury Constant
Maturity Series Yields reported, for the latest day for which
such yields have been so reported as of the second Business
Day preceding the Settlement Date with respect to such Called
Principal, in Federal Reserve Statistical Release H.15 (519)
(or any comparable successor publication) for actively traded
U.S. Treasury securities having a constant maturity equal to
the Remaining Average Life of such Called Principal as of
such Settlement Date. Such implied yield will be determined,
if necessary, by (x) converting U.S. Treasury bill quotations
to bond-equivalent yields in accordance with accepted
financial practice and (y) interpolating linearly between (1)
the actively traded U.S. Treasury security with the duration
closest to and greater than the Remaining Average Life and
(2) the actively traded U.S. Treasury security with the
duration closest to and less than the Remaining Average Life.
The Reinvestment Yield will be rounded to the same number of
decimal places as appears in the interest rate on the Notes.
"Remaining Average Life" means, with respect to any
Called Principal, the number of years (calculated to the
nearest one-twelfth year) obtained by dividing (a) such
Called Principal into (b) the sum of the products obtained by
multiplying (i) the principal component of each Remaining
Scheduled Payment with respect to such Called Principal by
(ii) the number of years (calculated to the nearest one-
twelfth year) that will elapse between the Settlement Date
with respect to such Called Principal and the scheduled due
date of such Remaining Scheduled Payment.
"Remaining Scheduled Payments" means, with respect to
the Called Principal of any Note, all payments of such Called
Principal and interest thereon that would be due after the
Settlement Date with respect to such Called Principal if no
payment of such Called Principal were made prior to its
scheduled due date, provided that if such Settlement Date is
not a date on which interest payments are due to be made
under the terms of the Notes, then the amount of the next
succeeding scheduled interest payment will be reduced by the
amount of interest accrued to such Settlement Date and
required to be paid on such Settlement Date pursuant to
Section 8.2 or Section 12.1.
"Settlement Date" means, with respect to the Called
Principal of any Note, the date on which such Called
Principal is to be prepaid pursuant to Section 8.2 or has
become or is declared to be immediately due and payable
pursuant to Section 12.1, as the context requires.
9. AFFIRMATIVE COVENANTS.
The Company covenants that so long as any of the Notes are
outstanding:
9.1. Compliance with Law.
The Company will and will cause each of its Subsidiaries to
comply with all laws, ordinances or governmental rules or
regulations to which each of them is subject, including, without
limitation, Environmental Laws, and will obtain and maintain in
effect all licenses, certificates, permits, franchises and other
governmental authorizations necessary to the ownership of their
respective properties or to the conduct of their respective
businesses, in each case to the extent necessary to ensure that
non-compliance with such laws, ordinances or governmental rules or
regulations or failures to obtain or maintain in effect such
licenses, certificates, permits, franchises and other governmental
authorizations could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
9.2. Insurance.
The Company will and will cause each of its Subsidiaries to
maintain, with financially sound and reputable insurers, insurance
with respect to their respective properties and businesses against
such casualties and contingencies, of such types, on such terms
and in such amounts (including deductibles, coinsurance and self-
insurance, if adequate reserves are maintained with respect
thereto) as is customary in the case of entities of established
reputations engaged in the same or a similar business and
similarly situated.
9.3. Maintenance of Properties.
The Company will and will cause each of its Subsidiaries to
maintain and keep, or cause to be maintained and kept, their
respective properties in good repair, working order and condition
(other than ordinary wear and tear), so that the business carried
on in connection therewith may be properly conducted at all times,
provided that this Section shall not prevent the Company or any
Subsidiary from discontinuing the operation and the maintenance of
any of its properties if such discontinuance is desirable in the
conduct of its business and the Company has concluded that such
discontinuance could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
9.4. Payment of Taxes and Claims.
The Company will and will cause each of its Subsidiaries to
file all tax returns required to be filed in any jurisdiction and
to pay and discharge all taxes shown to be due and payable on such
returns and all other taxes, assessments, governmental charges, or
levies imposed on them or any of their properties, assets, income
or franchises, to the extent such taxes and assessments have
become due and payable and before they have become delinquent and
all claims for which sums have become due and payable that have or
might become a Lien on properties or assets of the Company or any
Subsidiary, provided that neither the Company nor any Subsidiary
need pay any such tax or assessment or claims if (a) the amount,
applicability or validity thereof is contested by the Company or
such Subsidiary on a timely basis in good faith and in appropriate
proceedings, and the Company or a Subsidiary has established
adequate reserves therefor in accordance with GAAP on the books of
the Company or such Subsidiary or (b) the nonpayment of all such
taxes, assessments and claims in the aggregate could not
reasonably be expected to have a Material Adverse Effect.
9.5. Corporate Existence, etc.
Subject to Sections 10.8 and 10.9, the Company will at all
times preserve and keep in full force and effect its corporate
existence. Subject to Sections 10.8 and 10.9, the Company will
at all times preserve and keep in full force and effect the
corporate existence of each of its Subsidiaries (unless merged
into the Company or a Subsidiary) and all rights and franchises of
the Company and its Subsidiaries unless, in the good faith
judgment of the Company, the termination of or failure to preserve
and keep in full force and effect such corporate existence, right
or franchise could not, individually or in the aggregate, have a
Material Adverse Effect.
9.6. Covenant to Secure Notes Equally.
The Company covenants that, if it or any Subsidiary shall
create or assume any Lien upon any of its property or assets,
whether now owned or hereafter acquired, other than Liens
permitted by the provisions of Section 10.6 (unless prior written
consent to the creation or assumption thereof shall have been
obtained pursuant to Section 17.1), it will make or cause to be
made effective provision whereby the Notes will be secured by such
Lien equally and ratably with any and all other Debt thereby
secured so long as any such other Debt shall be so secured.
However, the compliance by the Company with this Section 9.6 shall
not constitute a waiver of, or cure for, any violation of
Section 10.6.
9.7 Covenant Relating to Additional Subsidiaries.
At the time any Person becomes a Subsidiary of an Obligor,
the Company shall so notify the holders of the Notes and promptly
thereafter (but in any event within 30 days after the date
thereof) shall cause such Person to:
(a) if it is a Domestic Subsidiary, become a party to
(i) the Subsidiary Guarantee, by executing and
delivering a subsidiary guarantee agreement in
substantially the form of Exhibit 4.11(a), and
(ii) the Contribution Agreement, by executing
a contribution agreement in substantially the form of
Exhibit 4.11(b);
(b) cause all of the Capital Stock of such Person (if
it is a Domestic Subsidiary) or 65% of the Capital Stock of
such Person (if it is a First Tier Foreign Subsidiary) to be
delivered to the Collateral Agent (together with undated
stock powers signed in blank) and pledged to the Collateral
Agent pursuant to a joinder to the existing Pledge Agreement
in substantially the form of Exhibit 9.7;
(c) if such Person is a Domestic Subsidiary and has any
Subsidiaries,
(i) deliver all of the Capital Stock of such
Domestic Subsidiaries owned by it and 65% of the Capital
Stock of the First Tier Foreign Subsidiaries owned by it
(together with undated stock powers signed in blank) to
the Collateral Agent, and
(ii) execute a joinder to the existing Pledge
Agreement in substantially the form of Exhibit 9.7;
(d) deliver such other documentation as the Collateral
Agent may reasonably request in connection with the
foregoing, including, without limitation, appropriate, UCC
financing statements, certified resolutions and other
organizational and authorizing documents of such Person and
favorable opinions of counsel to such Person (which shall
cover, among other things, the legality, validity, binding
effect and enforceability of the documentation referred to
above), all in form, content and scope reasonably
satisfactory to the Collateral Agent;
(e) provide to the Collateral Agent, if applicable, a
new Schedule 2(a) to the appropriate Pledge Agreement which
shall reflect the pledge of the Capital Stock of such new
Subsidiary; and
(f) provide to the holders of the Notes a new Schedule
5.4 which shall reflect the information regarding such new
Subsidiary required by Section 5.4.
Notwithstanding the foregoing, so long as no Default or Event of
Default shall then exist, and
(A) all of the obligations of the Company and its
Subsidiaries in respect of the Credit Facility, together with
any and all extensions, renewals or refundings of any such
obligations, shall have been indefeasibly satisfied in full
in cash, or
(B) the holders of all such obligations have released
(i) any and all of the Collateral from the Lien of
any Pledge Agreement and
(ii) any and all Guaranties of such obligations
given by any Subsidiary,
in a manner and pursuant to documentation which, in the reasonable
opinion of the holders of all of the Notes, fully releases such
Collateral as security for all such obligations and fully releases
all such Guaranties, then (subject to the next succeeding
sentence) each of the holders of the Notes shall thereupon release
such Collateral from the Lien of such Pledge Agreement and such
Guaranties so long as no holder of any Debt of the Company or its
Subsidiaries shall have been, or shall at any time be,
(x) given a pledge of or granted a security interest in
any Capital Stock of a Subsidiary, or
(y) given a Guaranty of such Debt by any Subsidiary.
If at any time after such releases, any holder of Debt of the
Company or its Subsidiaries shall be,
(1) given a pledge of or granted a security interest in
any Capital Stock of a Subsidiary, or
(2) given a Guaranty of such Debt by any Subsidiary,
then
(Y) in the case of clause (1) above, the pledgor or
grantor with respect to such Capital Stock shall
contemporaneously execute and deliver, to each of the holders
of the Notes, a pledge agreement, joinder agreement or
amendment to a Pledge Agreement, and take all further action
(including, without limitation, delivery of stock
certificates, if any, and undated stock powers executed in
blank) that is necessary or that otherwise may be reasonably
requested by the Required Holders, in order to grant to or
for the equal and ratable benefit of the holders of the Notes
and such holder or holders of Debt (subject to intercreditor
terms among such parties that shall be no less favorable to
the holders of the Notes than the Intercreditor Agreement), a
perfected security interest in all such Stock pledged by such
Person, together with a certificate of such Person's
Secretary or another responsible officer, and an opinion of
counsel to such Person, regarding the authorization,
execution and delivery of such documents and instruments, and
their enforceability, which certificate and opinion shall be
reasonably satisfactory in all respects to the Required
Holders, and
(Z) in the case of clause (2) above, such Subsidiary
shall contemporaneously execute and deliver, to each of the
holders of the Notes, a duly authorized Subsidiary Guarantee
substantially in the form of Exhibit 4.11(a), a certificate
of such Subsidiary's secretary or another responsible officer
certifying such Subsidiary's constitutive documents and
relevant resolutions, and an opinion of counsel to such
Person regarding the authorization, execution and delivery of
such Subsidiary Guarantee, and its enforceability, which
opinion shall be satisfactory in all respects to the Required
Holders.
9.8 Ownership of Subsidiary Guarantors.
The Company shall maintain, directly or indirectly, its
percentage of ownership existing as of the date hereof of all
Material Subsidiaries that are parties to the Subsidiary Guarantee
on the date of Closing. The Company shall not decrease its
collective direct or indirect ownership percentage in each
Material Subsidiary that becomes a party to the Subsidiary
Guarantee after the date of Closing, as such ownership exists at
the time such Subsidiary becomes such a party; provided, however,
that this Section 9.8 shall not prohibit any of the transactions
described in paragraphs (a) or (b) of Section 10.8.
9.9 Pari Passu Ranking.
To the extent that proceeds from the Collateral would not at
any time be sufficient to satisfy in full all obligations owing in
respect of the Notes and the Subsidiary Guarantee at such time,
the portion of such obligations which would not be so satisfied
shall rank pari passu, without preference or priority, with all
other outstanding, unsecured, unsubordinated obligations of the
Company and the Subsidiary Guarantors (as the case may be),
present and future, that have not been accorded by law
preferential rights. Without limitation of the foregoing, all
obligations of the Company and the Subsidiaries owing in respect
of this Agreement, the Notes and the Subsidiary Guarantee shall
rank pari passu, without preference or priority, with all
obligations of the Company and the Subsidiaries owing in respect
of the Credit Facility and all Guaranties of such obligations
executed by any Subsidiaries in connection therewith.
9.10 Collateral.
(a) If, subsequent to the date of Closing, an Obligor
shall acquire any Capital Stock required to be delivered to
the Collateral Agent as Collateral hereunder or under any of
the Collateral Documents, the Company shall immediately
notify the holders of the Notes and the Collateral Agent of
same.
(b) Each Obligor shall (within 30 days of such request)
take such action, as reasonably requested by the Collateral
Agent and at its own expense, to ensure that the Secured
Parties have a perfected Lien in all Collateral of the Credit
Parties as set forth in the Pledge Agreement (whether now
owned or hereafter acquired), subject only to Liens permitted
under Section 10.6. Such actions to be required by the
Collateral Agent may include, but are not limited to,
delivery of Capital Stock, stock powers or other appropriate
assignments in blank, UCC financing statements and legal
opinions with respect thereto, which shall be satisfactory in
all respects to the Required Holders.
9.11 Modification of Indebtedness.
The Company hereby acknowledges and agrees that if the
Company or any of its Subsidiaries shall enter into any agreement
or amendment with any lender or noteholder that amends or modifies
(or permit the amendment or modification of) any Indebtedness
(other than with respect to (i) Indebtedness arising under this
Note Agreement and the other Financing Documents, (ii) any
Indebtedness owing from one Credit Party to another Credit Party
and (iii) other Indebtedness outstanding or committed in an
aggregate amount less than $2,000,000) to add or change any
Financial Covenants in a manner adverse to the issuer of such
Indebtedness, then, and in each and any such event, the terms of
this Agreement shall be and shall be deemed to be, notwithstanding
Section 17.1 and without any further action on the part of the
Company, any of its Subsidiaries or any other Person being
necessary or required, amended to afford the holders of the Notes
the same benefits and rights as such agreements or amendments
provide to any such other lender (such deemed amendment may be the
addition of one or more new covenants or defaults addressing
matters not addressed by the existing covenants or defaults set
forth herein, as well as modifications to such existing covenants
or defaults that are more favorable to such lender).
Notwithstanding the foregoing, such deemed amendment shall be
rescinded (i) retroactively to the date of effectiveness thereof
if the Required Holders object thereto in a written notice
delivered to the Company at any time within the 30-day period
immediately following receipt by all holders of the Notes of the
agreement or amendment referred to in the next succeeding
sentence; provided, however, that the Company shall be deemed to
be in compliance with this Section 9.11 if the Required Holders do
so object and (ii) upon payment in full of the Indebtedness so
amended or modified in a manner adverse to the Company and its
Subsidiaries, unless such Indebtedness is refinanced, in which
case the terms, conditions and covenants of the new Indebtedness
shall be deemed an amendment or modification to the original
Indebtedness for purposes of this Section 9.11. The Company will
promptly deliver to each holder of Notes a copy of each such
agreement or amendment entered into after the date hereof.
Without limiting the effectiveness of the first sentence of this
Section 9.11, the Company agrees, no later than 30 days following
the date of such agreement or amendment, to enter into such
documentation as the Required Holders may reasonably request to
evidence the amendments provided for in this Section 9.11. For
purposes of this Section 9.11, the term "Financial Covenants"
means any covenant (or substantially equivalent default provision)
which requires the Company or its Subsidiaries to attain or
maintain a prescribed level of financial condition or financial
achievement, or prohibits the Company or its Subsidiaries from
taking specified actions (such as incurring Indebtedness or making
Restricted Payments) unless it will be in compliance with such a
prescribed level immediately thereafter, including, without
limitation, covenants of the type contained in Section 10 of this
Agreement.
10. NEGATIVE COVENANTS.
The Company covenants that so long as any of the Notes are
outstanding:
10.1. Consolidated Net Worth.
The Company will not, at any time, permit Consolidated Net
Worth to be less than the sum of:
(a) $299,554,000; plus
(b) for each fiscal quarter of the Company ended at or
prior to such time, beginning with the fiscal quarter ending
October 1, 2003, the greater of
(i) 50% of Net Income, and
(ii) Zero dollars; plus
(c) an amount equal to 100% of the proceeds from any
Equity Issuance.
10.2. Leverage Ratio.
The Company shall not permit the Leverage Ratio, determined
as of the last day of any fiscal quarter of the Company ending in
either period specified below, to be greater than 2.50:1.00.
10.3. Priority Debt.
The Company shall not, as of the end of each fiscal quarter,
permit the aggregate outstanding amount of Priority Debt to exceed
15% of Consolidated Net Worth at such time.
10.4. Fixed Charge Coverage Ratio.
The Company shall not permit the Fixed Charge Coverage Ratio,
as of the last day of each fiscal quarter of the Company, to be
less than 2.25 to 1.00; provided, however, that if scheduled
principal payments are due and payable with respect to both the
Notes and the 2000 Senior Notes during the four fiscal quarter
period of the Company included in any calculation of the Fixed
Charge Coverage Ratio, the minimum Fixed Charge Coverage Ratio
required by this Section 10.4 as of the last day of such four
fiscal quarter period shall be 2.00:1.00.
10.5. Restricted Payments and Restricted Investments.
The Company will not, and will not permit any of its
Subsidiaries to, declare, make or incur any liability to declare
or make any Restricted Payment or any Restricted Investment
unless, immediately prior, and immediately after giving effect, to
the making of such Restricted Payment or Restricted Investment, no
Default or Event of Default would exist and, with respect to
Restricted Payments, immediately after giving effect to such
action, the aggregate amount of such Restricted Payments of the
Company and its Subsidiaries declared or made during the period
commencing on July 3, 2003, and ending on the date such Restricted
Payment is declared or made, inclusive, would not exceed the sum
of:
(a) $11,049,500, plus
(b) 50% of Net Income for such period (or minus 100% of
Net Income for such period if Net Income for such period is a
loss), plus
(c) the aggregate amount of net proceeds arising from sales
of the Company's Capital Stock during such period, plus
(d) the Carryforward Restricted Payment Basket.
10.6. Liens
The Company shall not, and shall not permit any Subsidiary
to, create, assume or suffer to exist (upon the happening of a
contingency or otherwise) any Lien upon any of its respective
property or assets, whether now owned or hereafter acquired,
except:
(a) Liens existing on the date of the Closing and
described on Schedule 5.15 securing Debt outstanding at
Closing in an aggregate principal or face amount not
exceeding $800,000;
(b) Liens for taxes, assessments or other governmental
charges the payment of which is not at the time required by
Section 9.4;
(c) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and other similar Liens,
in each case, incurred in the ordinary course of business for
sums not yet due or the payment of which is not at the time
required by Section 9.4;
(d) any Lien existing on any fixed asset of any Person
at the time such Person is acquired by the Company or a
Subsidiary or is merged or consolidated with or into the
Company or a Subsidiary and, in each case, not created in
contemplation of such event;
(e) any Lien created to secure all or any part of the
purchase price, or to secure Debt incurred or assumed to pay
all or any part of the purchase price or cost of
construction, of fixed assets (or any improvement thereon)
acquired or constructed by the Company or a Subsidiary after
the date of the Closing, provided that:
(i) any such Lien shall extend solely to the item
or items of such property (or improvement thereon) so
acquired or constructed and, if required by the terms of
the instrument originally creating such Lien, other
property (or improvement thereon) which is an
improvement to or is acquired for specific use in
connection with such acquired or constructed property
(or improvement thereon) or which is real property being
improved by such acquired or constructed property (or
improvement thereon, or the proceeds thereof),
(ii) the principal amount of the Debt secured by
any such Lien shall at no time exceed an amount equal to
the cost to the Company or such Subsidiary of the
property (or improvement thereon) so acquired or
constructed, and
(iii) any such Lien shall attach or be created
contemporaneously with, or within 180 days after, the
acquisition or construction of such property; provided,
however, that, in the case of the construction of
improvements on real property, the real property upon
which such construction is located may be owned for more
than 180 days prior to the attachment of such Lien;
(f) leases or subleases granted to others, easements,
rights-of-way, restrictions and other similar charges or
encumbrances, in each case incidental to, and not interfering
with, the ordinary conduct of the business of the Company or
any of its Subsidiaries, provided that such Liens do not, in
the aggregate, materially detract from the value of the
property of the Company and its Subsidiaries taken as a
whole;
(g) Liens on property or assets of the Company or any
of its Subsidiaries securing Debt owing to the Company or to
another Subsidiary;
(h) any interest or title of a lessor under, and Liens
arising from Uniform Commercial Code financing statements (or
equivalent filings, registrations or agreements in foreign
jurisdictions) relating to, Operating Leases not prohibited
by this Agreement;
(i) Liens consisting solely of the pledge by the
Company and its Subsidiaries of the Capital Stock of the
Subsidiaries of the Company (and proceeds thereof) to secure
the Obligations (as defined in the Intercreditor Agreement);
(j) Liens not otherwise permitted by clauses (a)
through (i) of this Section, provided that, immediately
after, and immediately after giving effect to, the incurrence
of any Debt secured by any such Lien, Priority Debt will not
exceed 15% of Consolidated Net Worth; and
(k) any Lien arising out of the refinancing, extension,
renewal or refunding of any Debt that is permitted to be
incurred hereunder secured by any Lien permitted by clauses
(a), (d), (e) and (j) of this Section, provided that (i) the
principal amount of Debt secured by such Lien immediately
prior to such refinancing, extension, renewal or refunding is
not increased or the maturity thereof reduced, (ii) such Lien
is not extended to any additional property, and (iii)
immediately after giving effect to such refinancing,
extension, renewal or refunding, no Default or Event of
Default would exist.
A violation of this Section 10.6 will constitute an Event of
Default, whether or not any provision is made for an equal and
ratable Lien pursuant to Section 9.6.
10.7. Transactions with Affiliates.
The Company will not, and will not permit any Subsidiary to,
enter into directly or indirectly any transaction or group of
related transactions (including without limitation the purchase,
lease, sale or exchange of properties of any kind or the rendering
of any service) with any Affiliate (other than such transactions
between or among the Company or any Wholly-Owned Subsidiary or
between or among Wholly-Owned Subsidiaries), except in the
ordinary course and pursuant to the reasonable requirements of the
Company's or such Subsidiary's business and upon fair and
reasonable terms no less favorable to the Company or such
Subsidiary than would be obtainable in a comparable arm's-length
transaction with a Person not an Affiliate.
10.8. Merger, Consolidation, Sales of Substantially All
Assets.
The Company shall not, and shall not permit any Subsidiary
to, merge, consolidate or exchange shares with any other Person or
sell, assign, convey, transfer or lease all or substantially all
of its assets in a single transaction or series of transactions to
any Person, except that:
(a) any Subsidiary may merge or consolidate with and
into the Company or with a Wholly-Owned Subsidiary;
(b) a Subsidiary may sell or transfer all or
substantially all of its assets to the Company or to a Wholly-
Owned Subsidiary;
(c) the Company may sell or transfer substantially all
of its assets to one or more Wholly-Owned Subsidiaries that
are Subsidiary Guarantors which, substantially concurrently
with such sale or transfer, comply with, or are then in
compliance with, the provisions of Section 9.7 hereof,
provided that no such Wholly-Owned Subsidiaries need be
Subsidiary Guarantors if, as contemplated by Section 9.7
hereof, no Subsidiary is a Subsidiary Guarantor;
(d) the Company and any Subsidiary may sell inventory
in the ordinary course of business; and
(e) the Company may merge or consolidate with any other
corporation, or sell, assign, convey, transfer or lease all
or substantially all of the assets of the Company, so long
as:
(i) the surviving corporation (or the corporation
to which such sale, assignment, transfer, conveyance or
lease is made (the "transferee")) shall be the Company
or another corporation organized under the laws of the
United States or a State thereof or the District of
Columbia;
(ii) the surviving (or transferee) corporation (if
not the Company) shall assume the due and punctual
performance and observance of the obligations of the
Company under this Agreement, the Notes and the other
Financing Documents pursuant to such agreements and
instruments as shall be reasonably satisfactory to the
Required Holders, and the Company shall have caused to
be delivered to each holder of Notes an opinion of
nationally recognized counsel, or other independent
counsel reasonably satisfactory to the Required Holders,
to the effect that all agreements or instruments
effecting such assumption are enforceable in accordance
with their terms and comply with the terms hereof; and
(iii) immediately after giving effect to such
merger, consolidation or sale or transfer of assets, no
Default or Event of Default shall have occurred or
exist.
10.9. Sales of Assets.
The Company shall not, and shall not permit any of its
Subsidiaries to, engage in Asset Sales unless:
(a) in the case of any Asset Sale having a Disposition
Value of $10,000,000 or more, the Board of Directors of the
Company or such Subsidiary (or the executive committee
thereof), as the case may be, shall have, in good faith (i)
determined that the Asset Sale is in the best interest of the
Company or such Subsidiary, (ii) determined that the
consideration to be received in connection with such Asset
Sale is satisfactory and adequate and (iii) otherwise
approved such Asset Sale;
(b) the Company or such Subsidiary, as the case may be,
receives consideration at the time of any such Asset Sale at
least equal to the Fair Market Value of the assets sold or
otherwise disposed of;
(c) in the case of an Asset Sale constituting the sale
of Equity Interests of a Subsidiary (or Subsidiary thereof):
(i) all Equity Interests of such Subsidiary (or Subsidiary
thereof) then owned by the Company and its Subsidiaries shall
be sold or otherwise disposed of simultaneously and (ii) the
Subsidiary (or Subsidiary thereof) that is sold or disposed
of shall not own or hold any Equity Interests or Debt of the
Company or any other Subsidiary that is not also then being
simultaneously sold or disposed of;
(d) the Asset Sale does not constitute the sale of a
Substantial Amount of the assets of the Company and its
Subsidiaries; and
(e) immediately before and immediately after giving
effect to such Asset Sale, no Default or Event of Default
shall exist.
Notwithstanding the foregoing, the Company and any Subsidiary may
engage in Asset Sales constituting the sale of a Substantial
Amount of the Assets of the Company and its Subsidiaries so long
as (i) the requirements set forth in clauses (a) through (c) and
clause (e) above are satisfied, (ii) at least 80% of the
consideration therefor received by the Company or such Subsidiary
is in cash, and (iii) within 365 days after the receipt by the
Company or such Subsidiary of any Net Proceeds from such Asset
Sale, the Company shall apply, or shall cause such Subsidiary to
apply, the amount of such Net Proceeds in excess of the amount
constituting a Substantial Amount, to the acquisition of a
controlling interest in another business, the making of a capital
expenditure or the acquisition of other long-term assets, in each
case, in the same or a similar line of business as the Company was
engaged in on the date of such Asset Sale.
10.10. Nature of Business.
The Company will not, and will not permit any of its
Subsidiaries to, engage in any business if, as a result, when
taken as a whole, the general nature of the business then engaged
in by the Company and its Subsidiaries would be substantially
changed from the operation of restaurants.
10.11. Dividend and Other Payment Restrictions Affecting
Subsidiaries.
The Company shall not permit any of its Subsidiaries to
create or otherwise cause or suffer to exist or become effective
any encumbrance or restriction on the ability of any Subsidiary to
(x)(i) pay dividends or make any other distributions to the
Company or any of its Subsidiaries with respect to, or on account
of, its Equity Interests or (ii) pay any Debt owed to the Company
or any of its Subsidiaries, (y) make loans or advances to the
Company or any of its Subsidiaries or (z) transfer or encumber any
of its properties or assets to the Company or any of its
Subsidiaries, except for such encumbrances or restrictions
existing under or by reason of:
(a) agreements evidencing Debt as in effect on the date
of the Closing and described on Schedule 5.15 hereof
(including, without limitation, the documents evidencing the
Credit Facility) and any agreement which evidences any
renewal, extension, substitution or refinancing of such Debt
so long as the provisions relating to such encumbrance or
restriction contained in any such agreement are no more
restrictive or onerous to the Company or such Subsidiary than
such provisions as in existence prior to such renewal,
extension, substitution or refinancing,
(b) agreements evidencing Priority Debt of Subsidiaries
permitted to be incurred under this Agreement that impose
restrictions of the nature described in clause (z) above (but
not of the type or nature described in clauses (x) or (y)
above),
(c) applicable law,
(d) customary non-assignment provisions in leases
entered into in the ordinary course of business and
consistent with past practices,
(e) purchase money obligations for property acquired in
the ordinary course of business that impose restrictions of
the nature described in clause (z) above on the property so
acquired, and
(f) an agreement that has been entered into for the
sale or disposition of the Equity Interests or property or
assets of a Subsidiary that is permitted by Section 10.8 or
10.9.
10.12. No Restriction on Amendments or Prepayments.
(a) Amendments. The Company shall not enter into, or
otherwise be or become a party to or obligated under, any
agreement, document or instrument that includes any covenant
or other provision that requires or would require, as a
condition to the amendment or waiver of any term or provision
of this Agreement, the approval or consent of any creditor of
the Company (or of any agent or trustee acting on such
creditor's behalf).
(b) Prepayments. The Company shall not enter into, or
otherwise be or become a party to or obligated under, any
agreement, document or instrument that includes any covenant
or other provision that requires or would require, as a
condition to the making of any required or optional payment
or prepayment of the Notes pursuant to any of the terms and
provisions of Section 8, the approval or consent of any
creditor of the Company (or of any agent or trustee acting on
such creditor's behalf).
10.13. Capital Expenditures.
(a) The Company will not permit Capital Expenditures in any
fiscal year, commencing with the fiscal year ending December 31,
2003, to exceed the sum of (i) the amount set forth below for the
relevant fiscal year set forth below (the "Initial Capital
Expenditure Basket") plus (ii) the Carryforward Capital
Expenditure Basket:
<table>
<s> <c>
Fiscal year Amount
2003 $87,000,000
2004 $90,000,000
2005 $94,000,000
2006 $98,000,000
2007 $102,000,000
2008 $106,000,000
2009 $110,000,000
2010 $114,000,000
2011 $119,000,000
2012 $124,000,000
2013 $129,000,000
</table>
(b) The term "Unused Capital Expenditure Allowance" means,
for any fiscal year, the amount by which the Initial Capital
Expenditure Basket for such fiscal year exceeds the aggregate
amount of Capital Expenditures actually made by the Company and
its Subsidiaries during such fiscal year. The term "Carryforward
Capital Expenditure Basket" shall mean the portion, if any, of all
Unused Capital Expenditure Allowance allocated by the Company
pursuant to subsection (c) below for Capital Expenditures in
future fiscal years. The term "Carryforward Restricted Payment
Basket" shall mean the portion, if any, of all Unused Capital
Expenditure Allowance allocated by the Company pursuant to
subsection (c) below for permitted Restricted Payments in future
fiscal years.
(c) Within 90 days after the end of each fiscal year of the
Company, commencing with 90 days after the end of fiscal year
2003, after or with delivery of the audited annual financial
statements in respect of the immediately preceding fiscal year of
the Company, the Company shall notify the Noteholders of (i) the
Unused Capital Expenditure Allowance for such immediately
preceding fiscal year and (ii) the Company's allocation of such
Unused Capital Expenditure Allowance in whole or in part to the
Carryforward Capital Expenditure Basket and/or the Carryforward
Restricted Payment Basket, whereupon the Carryforward Capital
Expenditure Basket and Carryforward Restricted Payment Basket
shall be immediately increased by the amounts allocated thereto.
If the Company fails to deliver such notice to the Noteholders in
the time required, the Unused Capital Expenditure Allowance shall
be allocated first to the Carryforward Restricted Payment Basket
and then to the Carryforward Capital Expenditure Basket.
Notwithstanding the foregoing, (x) the Carryforward Capital
Expenditure Basket may not be increased in any fiscal year by more
than $10,000,000, (y) the Carryforward Restricted Payment Basket
may not be increased in any fiscal year by more than $25,000,000,
and (z) no increase in the Carryforward Restricted Payment Basket
shall be permitted if the aggregate amount of Capital Expenditures
made in the immediately preceding fiscal year was less than
$40,000,000.
11. EVENTS OF DEFAULT.
An "Event of Default" shall exist if any of the following
conditions or events shall occur and be continuing:
(a) Principal or Make-Whole Amount -- the Company
defaults in the payment of any principal or Make-Whole
Amount, if any, on any Note when the same becomes due and
payable, whether at maturity or at a date fixed for
prepayment or by declaration or otherwise; or
(b) Interest Payment -- the Company defaults in the
payment of any interest on any Note for more than five
Business Days after the same becomes due and payable; or
(c) Specified Covenants -- the Company defaults in the
performance of or compliance with any term contained in
Section 10 or Section 7.1(d); or
(d) Other Covenants -- the Company defaults in the
performance of or compliance with any term contained herein
(other than those referred to in paragraphs (a), (b) and (c)
of this Section 11) and such default is not remedied within
30 days after the earlier of (i) a Responsible Officer
obtaining actual knowledge of such default and (ii) the
Company receiving written notice of such default from any
holder of a Note (any such written notice to be identified as
a "notice of default" and to refer specifically to this
paragraph (d) of Section 11); or
(e) Warranties and Representations -- any
representation or warranty made in writing by or on behalf of
the Company or by any officer of the Company in this
Agreement or in any writing furnished in connection with the
transactions contemplated hereby proves to have been false or
incorrect in any material respect on the date as of which
made; or
(f) Cross-Default -
(i) the Company or any Subsidiary is in default
(as principal or as guarantor or other surety) in the
payment of any principal of or premium or make-whole
amount or interest on any Indebtedness that is
outstanding in an aggregate principal amount of at least
$5,000,000 beyond any period of grace provided with
respect thereto, or
(ii) the Company or any Subsidiary is in default in
the performance of or compliance with any term of any
evidence of any Indebtedness in an aggregate outstanding
principal amount of at least $5,000,000 or of any
mortgage, indenture or other agreement relating thereto
or any other condition exists, and as a consequence of
such default or condition such Indebtedness has become,
or has been declared (or one or more Persons are
entitled to declare such Indebtedness to be), due and
payable before its stated maturity or before its
regularly scheduled dates of payment, or
(iii) as a consequence of the occurrence or
continuation of any event or condition (other than the
passage of time or the right of the holder of
Indebtedness to convert such Indebtedness into equity
interests),
(A) the Company or any Subsidiary has become
obligated to purchase or repay Indebtedness before
its regular maturity or before its regularly
scheduled dates of payment in an aggregate
outstanding principal amount of at least
$5,000,000, or
(B) one or more Persons have the right to
require the Company or any Subsidiary so to
purchase or repay such Indebtedness,
except for the purchase or repayment of Indebtedness
outstanding under the Credit Facility from time to time
to the extent required by Section 3.4(b) thereof as in
effect on the date of the Closing; or
(g) Insolvency -- the Company or any Subsidiary (i) is
generally not paying, or admits in writing its inability to
pay, its debts as they become due, (ii) files, or consents by
answer or otherwise to the filing against it of, a petition
for relief or reorganization or arrangement or any other
petition in bankruptcy, for liquidation or to take advantage
of any bankruptcy, insolvency, reorganization, moratorium or
other similar law of any jurisdiction, (iii) makes an
assignment for the benefit of its creditors, (iv) consents to
the appointment of a custodian, receiver, trustee or other
officer with similar powers with respect to it or with
respect to any substantial part of its property, (v) is
adjudicated as insolvent or to be liquidated, or (vi) takes
corporate action for the purpose of any of the foregoing; or
(h) Appointment of a Receiver -- a court or
governmental authority of competent jurisdiction enters an
order appointing, without consent by the Company or any of
its Subsidiaries, a custodian, receiver, trustee or other
officer with similar powers with respect to it or with
respect to any substantial part of its property, or
constituting an order for relief or approving a petition for
relief or reorganization or any other petition in bankruptcy
or for liquidation or to take advantage of any bankruptcy or
insolvency law of any jurisdiction, or ordering the
dissolution, winding-up or liquidation of the Company or any
of its Subsidiaries, or any such petition shall be filed
against the Company or any of its Subsidiaries and such
petition shall not be dismissed within 60 days; or
(i) Final Judgment -- a final judgment or judgments for
the payment of money aggregating in excess of $5,000,000 are
rendered against one or more of the Company and its
Subsidiaries and which judgments are not, within 60 days
after entry thereof, bonded, discharged or stayed pending
appeal or review, or are not discharged within 60 days after
the expiration of such stay; or
(j) ERISA -- if (i) any Plan shall fail to satisfy the
minimum funding standards of ERISA or the Code for any plan
year or part thereof or a waiver of such standards or
extension of any amortization period is sought or granted
under section 412 of the Code, (ii) a notice of intent to
terminate any Plan shall have been or is reasonably expected
to be filed with the PBGC or the PBGC shall have instituted
proceedings under ERISA section 4042 to terminate or appoint
a trustee to administer any Plan or the PBGC shall have
notified the Company or any ERISA Affiliate that a Plan may
become a subject of any such proceedings, (iii) the aggregate
"amount of unfunded benefit liabilities" (within the meaning
of section 4001(a)(18) of ERISA) under all Plans, determined
in accordance with Title IV of ERISA, shall exceed
$3,000,000, (iv) the Company or any ERISA Affiliate shall
have incurred or is reasonably expected to incur any
liability pursuant to Title I or IV of ERISA or the penalty
or excise tax provisions of the Code relating to employee
benefit plans, (v) the Company or any ERISA Affiliate
withdraws from any Multiemployer Plan, or (vi) the Company or
any Subsidiary establishes or amends any employee welfare
benefit plan that provides post-employment welfare benefits
in a manner that would increase the liability of the Company
or any Subsidiary thereunder; and any such event or events
described in clauses (i) through (vi) above, either
individually or together with any other such event or events,
could reasonably be expected to have a Material Adverse
Effect (as used in this Section 11(j), the terms "employee
benefit plan" and "employee welfare benefit plan" shall have
the respective meanings assigned to such terms in Section 3
of ERISA); or
(k) Subsidiary Guarantee -- (i) the Subsidiary
Guarantee shall cease to be in full force and effect or shall
be declared by a court or Governmental Authority of competent
jurisdiction to be void, voidable or unenforceable against
any Subsidiary party thereto, or (ii) the validity or
enforceability of the Subsidiary Guarantee shall be contested
by the Company or any Subsidiary or Affiliate thereof, or
(iii) the Company, or any Subsidiary or Affiliate thereof,
shall deny that any Subsidiary has any further liability or
obligation under the Subsidiary Guarantee; or
(l) Other Financing Documents -- (i) the Company, any
Subsidiary Guarantor, or any pledgor under the Pledge
Agreement, shall default in the due performance or observance
of any term, covenant or agreement in any one or more of the
Subsidiary Guarantee, the Contribution Agreement, the
Intercreditor Agreement and the Pledge Agreement, as the case
may be (subject to applicable grace or cure periods, if any),
or (ii) any such documents shall fail to be in full force or
effect or to give the Collateral Agent or the holders of the
Notes any material part of the Liens, rights, powers and
privileges purported to be created thereby; or
(m) Credit Facility -- there shall occur an Event of
Default under and as defined in the Credit Facility; or
(n) 2000 Note Agreements -- there shall occur an Event
of Default under and as defined in the 2000 Note Agreements.
12. REMEDIES ON DEFAULT, ETC.
12.1. Acceleration.
(a) If an Event of Default with respect to the Company
or any Subsidiary described in paragraph (g) or (h) of
Section 11 (other than an Event of Default described in
clause (i) of Section 11(g) or described in clause (vi) of
Section 11(g) by virtue of the fact that such clause
encompasses clause (i) of Section 11(g)) has occurred, all
the Notes then outstanding shall automatically become
immediately due and payable.
(b) If any other Event of Default has occurred and is
continuing, the Required Holders may at any time at their
option, by notice or notices to the Company, declare all the
Notes then outstanding to be immediately due and payable.
(c) If any Event of Default described in Section 11(a)
or Section 11(b) has occurred and is continuing, any holder
or holders of Notes at the time outstanding affected by such
Event of Default may at any time, at its or their option, by
notice or notices to the Company, declare all the Notes held
by it or them to be immediately due and payable.
Upon any Notes becoming due and payable under this
Section 12.1, whether automatically or by declaration, such Notes
will forthwith mature and the entire unpaid principal amount of
such Notes, plus (x) all accrued and unpaid interest thereon and
(y) the Make-Whole Amount determined in respect of such principal
amount (to the full extent permitted by applicable law), shall all
be immediately due and payable, in each and every case without
presentment, demand, protest or further notice, all of which are
hereby waived. The Company acknowledges, and the parties hereto
agree, that each holder of a Note has the right to maintain its
investment in the Notes free from repayment by the Company (except
as herein specifically provided for) and that the provision for
payment of a Make-Whole Amount by the Company in the event that
the Notes are prepaid or are accelerated as a result of an Event
of Default, is intended to provide compensation for the
deprivation of such right under such circumstances.
12.2. Other Remedies.
If any Default or Event of Default has occurred and is
continuing, and irrespective of whether any Notes have become or
have been declared immediately due and payable under Section 12.1,
the holder of any Note at the time outstanding may proceed to
protect and enforce the rights of such holder by an action at law,
suit in equity or other appropriate proceeding, whether for the
specific performance of any agreement contained herein or in any
Note, or for an injunction against a violation of any of the terms
hereof or thereof, or in aid of the exercise of any power granted
hereby or thereby or by law or otherwise.
12.3. Rescission.
At any time after any Notes have been declared due and
payable pursuant to clause (b) or (c) of Section 12.1, the
Required Holders, by written notice to the Company, may rescind
and annul any such declaration and its consequences if (a) the
Company has paid all overdue interest on the Notes, all principal
of and Make-Whole Amount, if any, on any Notes that are due and
payable and are unpaid other than by reason of such declaration,
and all interest on such overdue principal and Make-Whole Amount,
if any, and (to the extent permitted by applicable law) any
overdue interest in respect of the Notes, at the Default Rate,
(b) all Events of Default and Defaults, other than non-payment of
amounts that have become due solely by reason of such declaration,
have been cured or have been waived pursuant to Section 17, and
(c) no judgment or decree has been entered for the payment of any
monies due pursuant hereto or to the Notes. No rescission and
annulment under this Section 12.3 will extend to or affect any
subsequent Event of Default or Default or impair any right
consequent thereon.
12.4. No Waivers or Election of Remedies, Expenses, etc.
No course of dealing and no delay on the part of any holder
of any Note in exercising any right, power or remedy shall operate
as a waiver thereof or otherwise prejudice such holder's rights,
powers or remedies. No right, power or remedy conferred by this
Agreement or by any Note upon any holder thereof shall be
exclusive of any other right, power or remedy referred to herein
or therein or now or hereafter available at law, in equity, by
statute or otherwise. Without limiting the obligations of the
Company under Section 15, the Company will pay to the holder of
each Note on demand such further amount as shall be sufficient to
cover all costs and expenses of such holder incurred in any
enforcement or collection under this Section 12, including,
without limitation, reasonable attorneys' fees, expenses and
disbursements.
13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.
13.1. Registration of Notes.
The Company shall keep at its principal executive office a
register for the registration and registration of transfers of
Notes. The name and address of each holder of one or more Notes,
each transfer thereof and the name and address of each transferee
of one or more Notes shall be registered in such register. Prior
to due presentment for registration of transfer, the Person in
whose name any Note shall be registered shall be deemed and
treated as the owner and holder thereof for all purposes hereof,
and the Company shall not be affected by any notice or knowledge
to the contrary. The Company shall give to any holder of a Note
that is an Institutional Investor, promptly upon request therefor,
a complete and correct copy of the names and addresses of all
registered holders of Notes.
13.2. Transfer and Exchange of Notes.
Upon surrender of any Note at the principal executive office
of the Company for registration of transfer or exchange (and in
the case of a surrender for registration of transfer, duly
endorsed or accompanied by a written instrument of transfer duly
executed by the registered holder of such Note or his attorney
duly authorized in writing and accompanied by the address for
notices of, and a contact name and telephone number for, each
transferee of such Note or part thereof), the Company shall
execute and deliver (not later than five (5) Business Days after
the Company's receipt of the foregoing items, regardless of
whether the Company shall have yet received payment of any sum
referred to below), one or more new Notes (as requested by the
holder thereof) in exchange therefor, in an aggregate principal
amount equal to the unpaid principal amount of the surrendered
Note. Each such new Note shall be payable to such Person as such
holder may request and shall be substantially in the form of
Exhibit 1. Each such new Note shall be dated and bear interest
from the date to which interest shall have been paid on the
surrendered Note or dated the date of the surrendered Note if no
interest shall have been paid thereon. The Company may require
payment of a sum sufficient to cover (i) any stamp tax or
governmental charge imposed in respect of any such transfer of
Notes and (ii) any costs of delivery (not exceeding $50 in the
aggregate) of such new Notes. Notes shall not be transferred in
denominations of less than $100,000, provided that if necessary to
enable the registration of transfer by a holder of its entire
holding of Notes, one Note may be in a denomination of less than
$100,000. Any transferee, by its acceptance of a Note registered
in its name (or the name of its nominee), shall be deemed to have
made the representations set forth in Section 6.1 (other than the
first sentence thereof) and in Section 6.2.
13.3. Replacement of Notes.
Upon receipt by the Company of evidence reasonably
satisfactory to it of the ownership of and the loss, theft,
destruction or mutilation of any Note (which evidence shall be, in
the case of an Institutional Investor, notice from such
Institutional Investor of such ownership and such loss, theft,
destruction or mutilation), and
(a) in the case of loss, theft or destruction, of
indemnity reasonably satisfactory to it (provided, that if
the holder of such Note is, or is a nominee for, an original
Purchaser or another holder of a Note with a minimum net
worth of at least $100,000,000, such Person's own unsecured
agreement of indemnity shall be deemed to be satisfactory),
or
(b) in the case of mutilation, upon surrender and
cancellation thereof,
the Company at its own expense shall execute and deliver, in lieu
thereof, a new Note, dated and bearing interest from the date to
which interest shall have been paid on such lost, stolen,
destroyed or mutilated Note or dated the date of such lost,
stolen, destroyed or mutilated Note if no interest shall have been
paid thereon.
14. PAYMENTS ON NOTES.
14.1. Place of Payment.
Subject to Section 14.2, payments of principal, Make-Whole
Amount, if any, and interest becoming due and payable on the Notes
shall be made in New York, New York at the principal office of The
Chase Manhattan Bank, N.A. in such jurisdiction. The Company may
at any time, by notice to each holder of a Note, change the place
of payment of the Notes so long as such place of payment shall be
either the principal office of the Company in such jurisdiction or
the principal office of a bank or trust company in such
jurisdiction.
14.2. Home Office Payment.
So long as you or your nominee shall be the holder of any
Note, and notwithstanding anything contained in Section 14.1 or in
such Note to the contrary, the Company will pay all sums becoming
due on such Note for principal, Make-Whole Amount, if any, and
interest by the method and at the address specified for such
purpose below your name in Schedule A, or by such other method or
at such other address as you shall have from time to time
specified to the Company in writing for such purpose, without the
presentation or surrender of such Note or the making of any
notation thereon, except that upon written request of the Company
made concurrently with or reasonably promptly after payment or
prepayment in full of any Note, you shall surrender such Note for
cancellation, reasonably promptly after any such request, to the
Company at its principal executive office or at the place of
payment most recently designated by the Company pursuant to
Section 14.1. Prior to any sale or other disposition of any Note
held by you or your nominee you will, at your election, either
endorse thereon the amount of principal paid thereon and the last
date to which interest has been paid thereon or surrender such
Note to the Company in exchange for a new Note or Notes pursuant
to Section 13.2. The Company will afford the benefits of this
Section 14.2 to any Institutional Investor that is the direct or
indirect transferee of any Note purchased by you under this
Agreement and that has made the same agreement relating to such
Note as you have made in this Section 14.2.
15. EXPENSES, ETC.
15.1. Transaction Expenses.
Whether or not the transactions contemplated hereby are
consummated, the Company will pay all costs and expenses
(including reasonable attorneys' fees of your special counsel and,
if reasonably required, local or other counsel) incurred by you or
holder of a Note in connection with such transactions and in
connection with any amendments, waivers or consents under or in
respect of this Agreement or the Notes (whether or not such
amendment, waiver or consent becomes effective), including,
without limitation: (a) the costs and expenses incurred in
enforcing or defending (or determining whether or how to enforce
or defend) any rights under this Agreement or the Notes or in
responding to any subpoena or other legal process or informal
investigative demand issued in connection with this Agreement or
the Notes, or by reason of being a holder of any Note, and (b) the
costs and expenses, including financial advisors' fees, incurred
in connection with the insolvency or bankruptcy of the Company or
any Subsidiary or in connection with any work-out or restructuring
of the transactions contemplated hereby and by the Notes. The
Company will pay, and will save you and each other holder of a
Note harmless from, all claims in respect of any fees, costs or
expenses if any, of brokers and finders (other than those retained
by you).
15.2. Survival.
The obligations of the Company under this Section 15 will
survive the payment or transfer of any Note, the enforcement,
amendment or waiver of any provision of this Agreement or the
Notes, and the termination of this Agreement.
16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.
All representations and warranties contained herein shall
survive the execution and delivery of this Agreement and the
Notes, the purchase or transfer by you of any Note or portion
thereof or interest therein and the payment of any Note, and may
be relied upon by any subsequent holder of a Note, regardless of
any investigation made at any time by or on behalf of you or any
other holder of a Note. All statements contained in any
certificate or other instrument delivered by or on behalf of the
Company pursuant to this Agreement shall be deemed representations
and warranties of the Company under this Agreement. Subject to
the preceding sentence, this Agreement and the Notes embody the
entire agreement and understanding between you and the Company and
supersede all prior agreements and understandings relating to the
subject matter hereof.
17. AMENDMENT AND WAIVER.
17.1. Requirements.
This Agreement and the Notes may be amended, and the
observance of any term hereof or of the Notes may be waived
(either retroactively or prospectively), with (and only with) the
written consent of the Company and the Required Holders, except
that (a) no amendment or waiver of any of the provisions of
Section 1, 2, 3, 4, 5, 6 or 21 hereof, or any defined term (as it
is used therein), will be effective as to you unless consented to
by you in writing, and (b) no such amendment or waiver may,
without the written consent of the holder of each Note at the time
outstanding affected thereby, (i) subject to the provisions of
Section 12 relating to acceleration or rescission, change the
amount or time of any prepayment or payment of principal of, or
reduce the rate or change the time of payment or method of
computation of interest or of the Make-Whole Amount on, the Notes,
(ii) change the percentage of the principal amount of the Notes
the holders of which are required to consent to any such amendment
or waiver, or (iii) amend any of Sections 8, 11(a), 11(b), 12, 17
or 20.
17.2. Solicitation of Holders of Notes
(a) Solicitation. The Company will provide each holder
of the Notes (irrespective of the amount of Notes then owned
by it) with sufficient information, sufficiently far in
advance of the date a decision is required, to enable such
holder to make an informed and considered decision with
respect to any proposed amendment, waiver or consent in
respect of any of the provisions hereof or of the Notes. The
Company will deliver executed or true and correct copies of
each amendment, waiver or consent effected pursuant to the
provisions of this Section 17 to each holder of outstanding
Notes promptly following the date on which it is executed and
delivered by, or receives the consent or approval of, the
requisite holders of Notes.
(b) Payment. The Company will not directly or
indirectly pay or cause to be paid any remuneration, whether
by way of supplemental or additional interest, fee or
otherwise, or grant any security, to any holder of Notes as
consideration for or as an inducement to the entering into by
any holder of Notes of any waiver or amendment of any of the
terms and provisions hereof unless such remuneration is
concurrently paid, or security is concurrently granted, on
the same terms, ratably to each holder of Notes then
outstanding even if such holder did not consent to such
waiver or amendment.
(c) Consent in Contemplation of Transfer. Without
limiting the generality of Section 8.6, any consent made
pursuant to this Section 17 by a holder of Notes that has
transferred or has agreed to transfer its Notes to the
Company, any Subsidiary or any Affiliate of the Company and
has provided or has agreed to provide such written consent as
a condition to such transfer shall be void and of no force or
effect except solely as to such holder, and any amendments
effected or waivers granted or to be effected or granted that
would not have been or would not be so effected or granted
but for such consent (and the consents of all other holders
of Notes that were acquired under the same or similar
conditions) shall be void and of no force or effect except
solely as to such holder.
17.3. Binding Effect, etc.
Any amendment or waiver consented to as provided in this
Section 17 applies equally to all holders of Notes and is binding
upon them and upon each future holder of any Note and upon the
Company without regard to whether such Note has been marked to
indicate such amendment or waiver. No such amendment or waiver
will extend to or affect any obligation, covenant, agreement,
Default or Event of Default not expressly amended or waived or
impair any right consequent thereon. No course of dealing between
the Company and the holder of any Note nor any delay in exercising
any rights hereunder or under any Note shall operate as a waiver
of any rights of any holder of such Note. As used herein, the
term "this Agreement" and references thereto shall mean this
Agreement as it may from time to time be amended or supplemented.
17.4. Notes held by Company, etc.
Solely for the purpose of determining whether the holders of
the requisite percentage of the aggregate principal amount of
Notes then outstanding approved or consented to any amendment,
waiver or consent to be given under this Agreement or the Notes,
or have directed the taking of any action provided herein or in
the Notes to be taken upon the direction of the holders of a
specified percentage of the aggregate principal amount of Notes
then outstanding, Notes directly or indirectly owned by the
Company or any of its Affiliates shall be deemed not to be
outstanding.
18. NOTICES.
All notices and communications provided for hereunder shall
be in writing and sent (a) by facsimile if the sender on the same
day sends a confirming copy of such notice by a recognized
overnight delivery service (charges prepaid), or (b) by registered
or certified mail with return receipt requested (postage prepaid),
or (c) by a recognized overnight delivery service (with charges
prepaid). Any such notice must be sent:
(i) if to you or your nominee, to you or it at the
address specified for such communications in Schedule A, or
at such other address as you or it shall have specified to
the Company in writing,
(ii) if to any other holder of any Note, to such holder
at such address as such other holder shall have specified to
the Company in writing, or
(iii) if to the Company, to the Company at its
address set forth at the beginning hereof to the attention of
the Vice President of Finance and/or Chief Financial Officer,
or at such other address as the Company shall have specified
to the holder of each Note in writing.
Notices under this Section 18 will be deemed given only when
actually received. Notwithstanding the foregoing provisions of
this Section 18, service of process in any suit, action or
proceeding arising out of or relating to any of the Financing
Documents or any transaction contemplated thereby shall be
delivered in the manner provided in Section 22.8(c).
19. REPRODUCTION OF DOCUMENTS.
This Agreement and all documents relating thereto, including,
without limitation, (a) consents, waivers and modifications that
may hereafter be executed, (b) documents received by you at the
Closing (except the Notes themselves), and (c) financial
statements, certificates and other information previously or
hereafter furnished to you, may be reproduced by you by any
photographic, photostatic, microfilm, microcard, miniature
photographic or other similar process and you may destroy any
original document so reproduced. The Company agrees and
stipulates that, to the extent permitted by applicable law, any
such reproduction shall be admissible in evidence as the original
itself in any judicial or administrative proceeding (whether or
not the original is in existence and whether or not such
reproduction was made by you in the regular course of business)
and any enlargement, facsimile or further reproduction of such
reproduction shall likewise be admissible in evidence. This
Section 19 shall not prohibit the Company or any other holder of
Notes from contesting any such reproduction to the same extent
that it could contest the original, or from introducing evidence
to demonstrate the inaccuracy of any such reproduction.
20. CONFIDENTIAL INFORMATION.
For the purposes of this Section 20, "Confidential
Information" means information delivered to you by or on behalf of
the Company or any Subsidiary in connection with the transactions
contemplated by or otherwise pursuant to this Agreement that is
proprietary in nature and that was clearly marked or labeled or
otherwise adequately identified when received by you as being
confidential information of the Company or such Subsidiary,
provided that such term does not include information that (a) was
publicly known or otherwise known to you prior to the time of such
disclosure, (b) subsequently becomes publicly known through no act
or omission by you or any Person acting on your behalf,
(c) otherwise becomes known to you other than through disclosure
by the Company or any Subsidiary or (d) constitutes financial
statements delivered to you under Section 7.1 that are otherwise
publicly available. You will maintain the confidentiality of such
Confidential Information in accordance with procedures adopted by
you in good faith to protect confidential information of third
parties delivered to you provided that you may deliver or disclose
Confidential Information to (i) your directors, officers,
employees, agents, attorneys and affiliates (to the extent such
disclosure reasonably relates to the administration of the
investment represented by your Notes), (ii) your financial
advisors and other professional advisors who agree to hold
confidential the Confidential Information substantially in
accordance with the terms of this Section 20, (iii) any other
holder of any Note, (iv) any Institutional Investor to which you
sell or offer to sell such Note or any part thereof or any
participation therein (if such Person has agreed in writing prior
to its receipt of such Confidential Information to be bound by the
provisions of this Section 20), (v) any Person from which you
offer to purchase any Security of the Company (if such Person has
agreed in writing prior to its receipt of such Confidential
Information to be bound by the provisions of this Section 20),
(vi) any federal or state regulatory authority having jurisdiction
over you, (vii) the National Association of Insurance
Commissioners or any similar organization, or any nationally
recognized rating agency that requires access to information about
your investment portfolio or (viii) any other Person to which such
delivery or disclosure may be necessary or appropriate (w) to
effect compliance with any law, rule, regulation or order
applicable to you, (x) in response to any subpoena or other legal
process, (y) in connection with any litigation to which you are a
party or (z) if an Event of Default has occurred and is
continuing, to the extent you may reasonably determine such
delivery and disclosure to be necessary or appropriate in the
enforcement or for the protection of the rights and remedies under
your Notes and this Agreement. Each holder of a Note, by its
acceptance of a Note, will be deemed to have agreed to be bound by
and to be entitled to the benefits of this Section 20 as though it
were a party to this Agreement. On reasonable request by the
Company in connection with the delivery to any holder of a Note of
information required to be delivered to such holder under this
Agreement or requested by such holder (other than a holder that is
a party to this Agreement or its nominee), such holder will enter
into an agreement with the Company embodying the provisions of
this Section 20.
21. SUBSTITUTION OF PURCHASER.
You shall have the right to substitute any one of your
Affiliates as the purchaser of the Notes that you have agreed to
purchase hereunder, by written notice to the Company, which notice
shall be signed by both you and such Affiliate, shall contain such
Affiliate's agreement to be bound by this Agreement and shall
contain a confirmation by such Affiliate of the accuracy with
respect to it of the representations set forth in Section 6. Upon
receipt of such notice, wherever the word "you" is used in this
Agreement (other than in this Section 21), such word shall be
deemed to refer to such Affiliate in lieu of you. In the event
that such Affiliate is so substituted as a purchaser hereunder and
such Affiliate thereafter transfers to you all of the Notes then
held by such Affiliate, upon receipt by the Company of notice of
such transfer, wherever the word "you" is used in this Agreement
(other than in this Section 21), such word shall no longer be
deemed to refer to such Affiliate, but shall refer to you, and you
shall have all the rights of an original holder of the Notes under
this Agreement.
22. MISCELLANEOUS.
22.1. Successors and Assigns.
All covenants and other agreements contained in this
Agreement by or on behalf of any of the parties hereto bind and
inure to the benefit of their respective successors and assigns
(including, without limitation, any subsequent holder of a Note)
whether so expressed or not.
22.2. Payments Due on Non-Business Days.
Anything in this Agreement or the Notes to the contrary
notwithstanding, any payment of principal of or Make-Whole Amount
or interest on any Note that is due on a date other than a
Business Day shall be made on the next succeeding Business Day
without including the additional days elapsed in the computation
of the interest payable on such next succeeding Business Day.
22.3. Severability.
Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions
hereof, and any such prohibition or unenforceability in any
jurisdiction shall (to the full extent permitted by law) not
invalidate or render unenforceable such provision in any other
jurisdiction.
22.4. Construction.
Each covenant contained herein shall be construed (absent
express provision to the contrary) as being independent of each
other covenant contained herein, so that compliance with any one
covenant shall not (absent such an express contrary provision) be
deemed to excuse compliance with any other covenant. Where any
provision herein refers to action to be taken by any Person, or
which such Person is prohibited from taking, such provision shall
be applicable whether such action is taken directly or indirectly
by such Person.
22.5. Counterparts.
This Agreement may be executed in any number of counterparts,
each of which shall be an original but all of which together shall
constitute one instrument. Each counterpart may consist of a
number of copies hereof, each signed by less than all, but
together signed by all, of the parties hereto.
22.6. Governing Law.
THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE
WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW
OF THE STATE OF NEW YORK EXCLUDING CHOICE-OF-LAW PRINCIPLES OF THE
LAW OF SUCH STATE THAT WOULD REQUIRE THE APPLICATION OF THE LAWS
OF A JURISDICTION OTHER THAN SUCH STATE.
22.7. General Interest Provisions.
It is the intention of the Company and the holders of the
Notes to conform strictly to the Applicable Interest Law.
Accordingly, it is agreed that, notwithstanding any provisions to
the contrary in this Agreement or in the Notes, the aggregate of
all interest, and any other charges or consideration constituting
interest under the Applicable Interest Law that is taken,
reserved, contracted for, charged or received pursuant to this
Agreement or the Notes shall under no circumstances exceed the
maximum amount of interest allowed by the Applicable Interest Law.
If any such excess interest is ever charged, received or collected
on account of or relating to this Agreement and the Notes
(including any charge or amount which is not denominated as
"interest" but is legally deemed to be interest under Applicable
Interest Law), then in such event:
(a) the provisions of this Section 22.7 shall govern
and control;
(b) the Company shall not be obligated to pay the
amount of such interest to the extent that it is in excess of
the maximum amount of interest allowed by the Applicable
Interest Law;
(c) any excess shall be deemed a mistake and cancelled
automatically and, if theretofore paid, shall be credited to
the principal amount of the Notes by the holders thereof, and
if the principal balance of the Notes is paid in full, any
remaining excess shall be forthwith paid to the Issuer; and
(d) the effective rate of interest shall be
automatically subject to reduction to the Maximum Legal Rate
of Interest.
If at any time thereafter, the Maximum Legal Rate of Interest is
increased then, to the extent that it shall be permissible under
the Applicable Interest Law, the Company shall forthwith pay to
the holders of the Notes, on a pro rata basis, all amounts of such
excess interest that the holders of the Notes would have been
entitled to receive pursuant to the terms of this Agreement and
the Notes had such increased Maximum Legal Rate of Interest been
in effect at all times when such excess interest accrued. To the
extent permitted by the Applicable Interest Law, all sums paid or
agreed to be paid to the holders of the Notes for the use,
forbearance or detention of the indebtedness evidenced thereby
shall be amortized, prorated, allocated and spread throughout the
full term of the Notes.
22.8. Waiver of Jury Trial; Consent to Jurisdiction; Etc.
(a) Waiver of Jury Trial; Waiver of Consequential
Damages. THE PARTIES HERETO VOLUNTARILY AND INTENTIONALLY
WAIVE ANY RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS AGREEMENT OR ANY OTHER FINANCING
DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
THE COMPANY, ON BEHALF OF ITSELF AND THE OTHER OBLIGORS,
AGREES NOT TO ASSERT ANY CLAIM AGAINST ANY HOLDER OF NOTES,
ITS AFFILIATES, OR ANY OF THEIR RESPECTIVE DIRECTORS,
OFFICERS, EMPLOYEES, ATTORNEYS OR AGENTS, ON ANY THEORY OF
LIABILITY, FOR SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE
DAMAGES ARISING OUT OF OR OTHERWISE RELATING TO ANY OF THE
TRANSACTIONS CONTEMPLATED HEREIN.
(b) Consent to Jurisdiction. ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR
ANY OTHER FINANCING DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY OR ANY ACTION OR PROCEEDING TO EXECUTE OR
OTHERWISE ENFORCE ANY JUDGMENT IN RESPECT OF ANY BREACH UNDER
THIS AGREEMENT OR ANY OTHER FINANCING DOCUMENT MAY BE BROUGHT
BY SUCH PARTY IN ANY FEDERAL DISTRICT COURT LOCATED IN NEW
YORK, NEW YORK, OR ANY NEW YORK STATE COURT LOCATED IN NEW
YORK, NEW YORK AS SUCH PARTY MAY IN ITS SOLE DISCRETION
ELECT, AND BY THE EXECUTION AND DELIVERY OF THIS AGREEMENT,
THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMIT TO
THE NONEXCLUSIVE IN PERSONAM JURISDICTION OF EACH SUCH COURT,
AND EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES AND AGREES
NOT TO ASSERT IN ANY PROCEEDING BEFORE ANY TRIBUNAL, BY WAY
OF MOTION, AS A DEFENSE OR OTHER-WISE, ANY CLAIM THAT IT IS
NOT SUBJECT TO THE IN PERSONAM JURISDICTION OF ANY SUCH
COURT. IN ADDITION, EACH OF THE PARTIES HERETO IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION
THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE IN
ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR ANY OTHER FINANCING DOCUMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY BROUGHT IN ANY
SUCH COURT, AND HEREBY IRREVOCABLY WAIVES ANY CLAIM THAT ANY
SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM.
(c) Service of Process. EACH PARTY HERETO IRREVOCABLY
AGREES THAT PROCESS PERSONALLY SERVED OR SERVED BY U.S.
REGISTERED MAIL AT THE ADDRESSES PROVIDED HEREIN FOR NOTICES
SHALL CONSTITUTE, TO THE EXTENT PERMITTED BY LAW, ADEQUATE
SERVICE OF PROCESS IN ANY SUIT, ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER FINANCING
DOCUMENT OR TRANSACTION CONTEMPLATED HEREBY OR THEREBY, OR
ANY ACTION OR PROCEEDING TO EXECUTE OR OTHERWISE ENFORCE ANY
JUDGMENT IN RESPECT OF ANY BREACH HEREUNDER OR UNDER ANY
OTHER FINANCING DOCUMENT. RECEIPT OF PROCESS SO SERVED SHALL
BE CONCLUSIVELY PRESUMED AS EVIDENCED BY A DELIVERY RECEIPT
FURNISHED BY THE UNITED STATES POSTAL SERVICE OR ANY
COMMERCIAL DELIVERY SERVICE.
(d) Other Forums. NOTHING HEREIN SHALL IN ANY WAY BE
DEEMED TO LIMIT THE ABILITY OF ANY PARTY HERETO TO SERVE ANY
WRITS, PROCESS OR SUMMONSES IN ANY MANNER PERMITTED BY
APPLICABLE LAW OR TO OBTAIN JURISDICTION OVER ANY OTHER PARTY
HERETO IN SUCH OTHER JURISDICTION, AND IN SUCH OTHER MANNER,
AS MAY BE PERMITTED BY APPLICABLE LAW.
22.9. Right of Set-Off.
In addition to any rights now or hereafter granted under
applicable law or otherwise, and not by way of limitation of any
such rights, upon the occurrence of an Event of Default and the
commencement of remedies described in Section 12.1 or 12.2, each
holder of Notes is authorized at any time and from time to time,
without presentment, demand, protest or other notice of any kind
(all of which rights being hereby expressly waived), to set-off
and to appropriate and apply any and all deposits (general or
special) and any other indebtedness at any time held or owing by
such holder (including, without limitation, branches, agencies or
Affiliates of such holder wherever located) to or for the credit
or the account of any Obligor against obligations and liabilities
of such Obligor to the holders of the Notes under this Agreement
and the Notes, the other Financing Documents or otherwise,
irrespective of whether the holders of Notes shall have made any
demand hereunder and although such obligations, liabilities or
claims, or any of them, may be contingent or unmatured, and any
such set-off shall be deemed to have been made immediately upon
the occurrence of an Event of Default even though such charge is
made or entered on the books of such holder subsequent thereto.
Each holder of Notes hereby agrees that any set-off effected
pursuant to this Section 22.9 shall be subject to the terms of the
Intercreditor Agreement and, if the Intercreditor Agreement shall
no longer be in effect, shall be shared among all holders of Notes
at the time outstanding in proportion, as nearly as practicable,
to the respective unpaid principal amounts thereof not theretofore
prepaid.
22.10. Acceptance of Intercreditor Agreement.
By its acceptance of any Note the holder thereof shall be
deemed to have agreed to the terms of the Intercreditor Agreement.
22.11. Further Assurances.
The Company agrees, upon the request of the Required Holders
or the Collateral Agent, promptly to take such actions, as
reasonably requested, as are necessary to carry out the intent of
this Agreement and the other Financing Documents, including, but
not limited to, such actions as are necessary to ensure that the
Secured Parties have a perfected security interest in the
Collateral subject to no Liens other than Liens permitted by
Section 10.6.
* * * * * *
[Signatures on following pages]
If you are in agreement with the foregoing, please sign the
form of agreement on the accompanying counterpart of this
Agreement and return it to the Company, whereupon the foregoing
shall become a binding agreement between you and the Company.
Very truly yours,
RYAN'S FAMILY STEAK HOUSES, INC.,
a South Carolina corporation
By:
Name: Fred T. Grant, Jr.
Title: Senior Vice President -
Finance
The foregoing is hereby
agreed to as of the
date thereof.
The Prudential Insurance Company of America
By:______________________________
Name:
Title:
Pruco Life Insurance Company
By:_______________________________
Name:
Title:
Pruco Life Insurance Company
Of New Jersey
By:_______________________________
Name:
Title:
Baystate Investments, LLC
By: Prudential Private Placement Investors,
L.P., as Investment Advisor
By: Prudential Private Placement Investors,
Inc., General Partner
By:_______________________________
Name:
Title:
General Electric Capital Assurance Company
By: Prudential Private Placement Investors,
L.P., as Investment Advisor
By: Prudential Private Placement Investors,
Inc., General Partner
By:_______________________________
Name:
Title:
USG Annuity & Life Company
By: Prudential Private Placement Investors,
L.P., as Investment Advisor
By: Prudential Private Placement Investors,
Inc., General Partner
By:_______________________________
Name:
Title:
RGA Reinsurance Company
By: Prudential Private Placement Investors,
L.P., as Investment Advisor
By: Prudential Private Placement Investors,
Inc., General Partner
By:_______________________________
Name:
Title:
SCHEDULE A TO NOTE PURCHASE AGREEMENT
INFORMATION RELATING TO PURCHASER
Purchaser Name THE PRUDENTIAL INSURANCE COMPANY OF
AMERICA
Name in Which Note is THE PRUDENTIAL INSURANCE COMPANY OF
Registered AMERICA
Note Registration R-1; $42,258,000
Number; Principal R-2: $12,550,000
Amount
Payment on Account of
Note
Federal Wire Funds Transfer
Method:
R-1; $42,258,000:
Account The Bank of New York
Information: New York, NY
ABA No.: 021-000-018
Account No.: 890-0304-391
Re: (See "Accompanying Information (R-1)"
below)
R-2; $12,550,000:
The Bank of New York
New York, NY
ABA No.: 021-000-018
Account No.: 890-0304-944
Re: (See "Accompanying Information (R-2)"
below)
Accompanying Name of Issuer: Ryan's Family Steak
Information (R-1) Houses, Inc.
Description of
Security: 4.65% Senior Notes due
July 25, 2013
CUSIP Number: 783519 AA 9
Due date and application (as among
principal, interest and Yield-Maintenance
Amount) of the payment being made:
Accompanying Name of Issuer: Ryan's Family Steak
Information (R-2) Houses, Inc.
Description of
Security: 4.65% Senior Notes due
July 25, 2013
CUSIP Number: 783519 AA 9
Due date and application (as among
principal, interest and Yield-Maintenance
Amount) of the payment being made:
Address for Notices The Prudential Insurance Company of
Related to Payments America
c/o Prudential Investment Management,
Operations & Systems
Gateway Center Two
100 Mulberry Street, 10th floor
Newark, NJ 07102-4077
Attention: Manager, Billings and
Collections
Fax: (973) 802-8055
Address for all other The Prudential Insurance Company of
Notices (including America
copies of Notices c/o Prudential Capital Group
Related to Payments) 1170 Peachtree Street, Suite 500
Atlanta, GA 30309
Attention: Managing Director
Fax: (404) 870-3741
Telephonic Prepayment Manager, Trade Management Group
Notices Tel: (973) 802-4222
Fax: (973) 802-9425
Tax Identification 22-1211670
Number
Purchaser Name PRUCO LIFE INSURANCE COMPANY OF NEW
JERSEY
Name in Which Note is PRUCO LIFE INSURANCE COMPANY OF NEW
Registered JERSEY
Note Registration R-3; $1,598,000
Number; Principal
Amount
Payment on Account of
Note
Federal Wire Funds Transfer
Method:
The Bank of New York
Account New York, NY
Information: ABA No.: 021-000-018
Account No.: 890-0304-754
Re: (See "Accompanying Information"
below)
Accompanying Name of Issuer: Ryan's Family Steak
Information Houses, Inc.
Description of
Security: 4.65% Senior Notes due
July 25, 2013
CUSIP Number: 783519 AA 9
Due date and application (as among
principal, interest and Yield-Maintenance
Amount) of the payment being made:
Address for Notices Pruco Life Insurance Company of New
Related to Payments Jersey
c/o The Prudential Insurance Company of
America
c/o Prudential Investment Management,
Operations & Systems
Gateway Center Two
100 Mulberry Street, 10th Floor
Newark, NJ 07102-4077
Attention: Manager, Billings and
Collections
Fax: (973) 802-8055
Address for all other The Prudential Insurance Company of
Notices (including America
copies of Notices c/o Prudential Capital Group
Related to Payments) 1170 Peachtree Street, Suite 500
Atlanta, GA 30309
Attention: Managing Director
Fax: (404) 870-3741
Telephonic Prepayment Manager, Trade Management Group
Notices Tel: (973) 802-4222
Fax: (973) 802-9425
Tax Identification 22-2426091
Number
Purchaser Name PRUCO LIFE INSURANCE COMPANY
Name in Which Note is PRUCO LIFE INSURANCE COMPANY
Registered
Note Registration R-4; $6,144,000
Number; Principal
Amount
Payment on Account of
Note
Federal Wire Funds Transfer
Method:
The Bank of New York
Account New York, NY
Information: ABA No.: 021-000-018
Account No.: 890-0304-421
Re: (See "Accompanying Information"
below)
Accompanying Name of Issuer: Ryan's Family Steak
Information Houses, Inc.
Description of
Security: 4.65% Senior Notes due
July 25, 2013
CUSIP Number: 783519 AA 9
Due date and application (as among
principal, interest and Yield-Maintenance
Amount) of the payment being made:
Address for Notices Pruco Life Insurance Company
Related to Payments c/o The Prudential Insurance Company of
America
c/o Prudential Investment Management,
Operations & Systems
Gateway Center Two
100 Mulberry Street, 10th Floor
Newark, NJ 07102-4077
Attention: Manager, Billings and
Collections
Fax: (973) 802-8055
Address for all other The Prudential Insurance Company of
Notices (including America
copies of Notices c/o Prudential Capital Group
Related to Payments) 1170 Peachtree Street, Suite 500
Atlanta, GA 30309
Attention: Managing Director
Fax: (404) 870-3741
Telephonic Prepayment Manager, Trade Management Group
Notices Tel: (973) 802-4222
Fax: (973) 802-9425
Tax Identification 22-1944557
Number
Purchaser Name BAYSTATE INVESTMENTS, LLC
Name in Which Note is BAYSTATE INVESTMENTS, LLC
Registered
Note Registration R-5; $9,900,000
Number; Principal
Amount
Payment on Account of
Note
Federal Wire Funds Transfer
Method:
Fleet Bank
Account ABA No.: 011-000-138
Information: Account No.: 9429114060
Re: (See "Accompanying Information"
below")
Accompanying Name of Issuer: Ryan's Family Steak
Information Houses, Inc.
Description of
Security: 4.65% Senior Notes due
July 25, 2013
CUSIP Number: 783519 AA 9
Due date and application (as among
principal, interest and Yield-Maintenance
Amount) of the payment being made:
Address for Notices Baystate Investments, LLC
Related to Payments 200 Berkeley St., Floor B-3
Mail Stop B-03-01
Boston, MA 02116
Attention: Bank Relations
Address for all other Prudential Private Placement Investors,
Notices (including L.P.
copies of Notices 4 Gateway Center
Related to Payments) 100 Mulberry Street
Newark, NJ 07102
Attention: Albert Trank, Managing
Director
Tel: (973) 802-8608
Fax: (973) 624-6432
Telephonic Prepayment Manager, Trade Management Group
Notices Tel: (973) 802-8107
Fax: (800) 224-2278
Tax Identification 04-141-4660
Number
Purchaser Name GENERAL ELECTRIC CAPITAL ASSURANCE
COMPANY
Name in Which Note is Salkeld & Co.
Registered
Note Registration R-6; $13,300,000
Number; Principal
Amount
Payment on Account of
Note
Federal Wire Funds Transfer
Method:
Bankers Trust Company
Account 14 Wall Street
Information: New York, NY 10005
SWIFT Code: BKTR US 33
ABA No.: 021-001-033
Account No.: 99-911-145
FCC # 087737/GECA - PRU
Re: (See "Accompanying Information"
below)
Accompanying Name of Issuer: Ryan's Family Steak
Information Houses, Inc.
Description of
Security: 4.65% Senior Notes due
July 25, 2013
CUSIP Number: 783519 AA 9
Due date and application (as among
principal, interest and Yield-Maintenance
Amount) of the payment being made:
Address for Notices GE Financial Assurance
Related to Payments Account: GECA
3003 Summer Street
Stamford, CT 06904
Attention: Investment Operations
Fax: (203) 356-4688
Address for all other Prudential Private Placement Investors,
Notices (including L.P.
copies of Notices 4 Gateway Center
Related to Payments) 100 Mulberry Street
Newark, NJ 07102
Attention: Albert Trank, Managing
Director
Tel: (973) 802-8608
Fax: (973) 624-6432
Tax Identification 91-6027719
Number
Purchaser Name RGA REINSURANCE COMPANY
Name in Which Note is Hare & Co.
Registered
Note Registration R-7; $7,650,000
Number; Principal
Amount
Payment on Account of
Note
Federal Wire Funds Transfer
Method:
Bank of New York
Account ABA No.: 021-000-018
Information: Account No.: 128863
RGA Private Placement Account
Re: (See "Accompanying Information"
below)
Accompanying Name of Issuer: Ryan's Family Steak
Information Houses, Inc.
Description of
Security: 4.65% Senior Notes due
July 25, 2013
CUSIP Number: 783519 AA 9
Due date and application (as among
principal, interest and Yield-Maintenance
Amount) of the payment being made:
Address for Notices RGA Reinsurance Company
Related to Payments 1370 Timberlake Manor Parkway
Chesterfield, MO 63017-6039
Attn: Banking Dept.
Address for all other Prudential Private Placement Investors,
Notices (including L.P.
copies of Notices 4 Gateway Center
Related to Payments) 100 Mulberry Street
Newark, NJ 07102
Attention: Albert Trank, Managing
Director
Tel: (973) 802-8608
Fax: (973) 624-6432
Tax Identification 43-1235868
Number
Purchaser Name USG ANNUITY & LIFE COMPANY
Name in Which Note is USG ANNUITY & LIFE COMPANY
Registered
Note Registration R-8; $6,600,000
Number; Principal
Amount
Payment on Account of
Note
Federal Wire Funds Transfer
Method:
The Bank of New York
Account ABA No.: 021-000-018
Information: BNF: IOC566
Reference: USG Annuity & Life Company,
Account No. 368520
Re: (See "Accompanying Information"
below)
Accompanying Name of Issuer: Ryan's Family Steak
Information Houses, Inc.
Description of
Security: 4.65% Senior Notes due
July 25, 2013
CUSIP Number: 783519 AA 9
Due date and application (as among
principal, interest and Yield-Maintenance
Amount) of the payment being made:
Address for Notices ING Investment Management LLC
Related to Payments 5780 Powers Ferry Road, NW, Suite 300
Atlanta, GA 30327-4943
Attention: Securities Accounting
Fax: (770) 690-5057
Address for all other Prudential Private Placement Investors,
Notices (including L.P.
copies of Notices 4 Gateway Center
Related to Payments) 100 Mulberry Street
Newark, NJ 07102
Attention: Albert Trank, Managing
Director
Tel: (973) 802-8608
Fax: (973) 624-6432
Telephonic Prepayment Manager, Trade Management Group
Notices Tel: (973) 802-8107
Fax: (800) 224-2278
Tax Identification 73-0663836
Number
SCHEDULE B TO NOTE PURCHASE AGREEMENT
DEFINED TERMS
As used herein, the following terms have the respective
meanings set forth below or set forth in the Section hereof
following such term:
"Affiliate" shall mean, with respect to any Person, any
other Person (i) directly or indirectly controlling or controlled
by or under direct or common control with such Person or
(ii) directly or indirectly owning or holding ten percent (10%)
or more of any class of voting or other equity interests in such
Person. For purposes of this definition, "control" when used
with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract
or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing. Unless the context
otherwise clearly requires, any reference to an "Affiliate" is a
reference to an Affiliate of the Company.
"Agreement, this" is defined in Section 17.3.
"Applicable Interest Law" means any present or future law
(including, without limitation, the laws of the State of New York
and the United States of America) which has application to the
interest and other charges pursuant to this Agreement and the
Notes.
"Asset Sale" means (i) the sale, lease, conveyance or other
disposition of any assets or Debt (including, without limitation,
by way of a sale and leaseback) in one transaction (or series of
related transactions), other than sales of obsolete equipment and
(ii) the issue or sale by the Company or any of its Subsidiaries
of Equity Interests of any of the Company's Subsidiaries or
Subsidiaries of Subsidiaries. Notwithstanding the foregoing,
(a) a transfer of assets or Debt by the Company to a Wholly-Owned
Subsidiary or by a Subsidiary to the Company or a Wholly-Owned
Subsidiary, (b) an issuance or sale of Equity Interests by a
Subsidiary to the Company or a Wholly-Owned Subsidiary, (c) a
disposition of the types of investments described in
subparagraphs (a), (b) and (c) of the definition of "Restricted
Investments" in the ordinary course of business; (d) the issuance
of Equity Interests of a Subsidiary to an individual for the sole
purpose of qualifying such individual as a director of such
Subsidiary; (e) the issuance of Equity Interests of Subsidiaries
to minority shareholders of Subsidiaries to satisfy the rights of
such shareholders to receive issuances of stock which, in each
case, do not dilute the ownership interest of the Company (or
Subsidiary) in such Subsidiary, (f) sales of inventory in the
ordinary course of business, (g) the sale or transfer of up to 5%
of the Equity Interests of a Subsidiary in connection with the
formation of a real estate investment trust relating to such
Subsidiary, and (h) the sale of the real and personal property
associated with the locations listed on the attached Schedule C
will not be deemed to be an Asset Sale.
"Business Day" means (a) for the purposes of Section 8.7
only, any day other than a Saturday, a Sunday or a day on which
commercial banks in New York, New York are required or authorized
to be closed, and (b) for the purposes of any other provision of
this Agreement, any day other than a Saturday, a Sunday or a day
on which commercial banks in New York, New York or Greenville,
South Carolina are required or authorized to be closed.
"Capital Expenditures" means, as applied to any Person, all
expenditures by such Person which, in accordance with GAAP, would
be classified as capital expenditures, including without
limitation Capital Leases.
"Capital Lease" means, as applied to any Person, any lease
of any property (whether real, personal or mixed) by that Person
as lessee which, in accordance with GAAP, is or should be
accounted for as a capital lease on the balance sheet of that
Person and the amount of such obligation shall be the capitalized
amount thereof determined in accordance with GAAP.
"Capital Stock" means (a) in the case of a corporation,
corporate stock, (b) in the case of an association or business
entity, any and all shares, interests, participations, rights or
other equivalents (however designated) of corporate stock, (c) in
the case of a partnership, partnership interests (whether general
or limited) and (d) any other interest or participation that is
not Indebtedness and confers on a Person the right to receive a
share of the profits and losses of, or distributions of assets
of, the issuing Person.
"Carryforward Capital Expenditure Basket" is defined in
Section 10.13.
"Carryforward Restricted Payment Basket" is defined in
Section 10.13.
"Change in Control" means, with respect to the Company, any
of the following:
(i) any "person" or "group" (within the meaning of
Section 13(d) or 14(d) of the Exchange Act) has become,
directly or indirectly, the "beneficial owner" (as defined
in Rules 13d-3 and 13d-5 under the Exchange Act, except that
a Person shall be deemed to have "beneficial ownership" of
all shares that any such Person has the right to acquire,
whether such right is exercisable immediately or only after
the passage of time), by way of merger, consolidation or
otherwise, of 20% or more of the Voting Stock of the Company
on a fully-diluted basis, after giving effect to the
conversion and exercise of all outstanding warrants, options
and other securities of the Company (whether or not such
securities are then currently convertible or exercisable)
other than Trimark which may become the beneficial owner of
up to 30% of the Voting Stock of the Company as a result of
the Share Repurchase Program, or
(ii) during any period of two consecutive calendar
years, individuals who at the beginning of such period
constituted the board of directors of the Company cease for
any reason to constitute a majority of the directors of the
Company then in office unless such new directors were
elected or designated by the directors of the Company who
constituted the board of directors of the Company at the
beginning of such period or such directors were elected by
shareholders to fill vacant seats for resigning or retiring
directors that were not replaced at the time of such
resignation or retirement.
"Closing" is defined in Section 3.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time, and the rules and regulations promulgated
thereunder from time to time.
"Collateral" means any and all property that at any time is
granted to the Collateral Agent or any other Person, pursuant to
the Pledge Agreement or any other document, agreement or
instrument, as security for the payment of any or all of the
obligations of the Company under this Agreement and the Notes.
"Collateral Agent" means Bank of America, N.A., solely in
its capacity as collateral agent under the Pledge Agreement and
the Intercreditor Agreement, and together with any successor or
co-agent that becomes such in accordance with the provisions of
the Pledge Agreement and the Intercreditor Agreement.
"Collateral Documents" means a collective reference to the
Pledge Agreement and such other documents as are executed and
delivered in connection with the attachment and perfection of the
Secured Parties' security interests in the Capital Stock of each
Domestic Subsidiary and First-Tier Foreign Subsidiary of an
Obligor, including without limitation, UCC financing statements.
"Company" means Ryan's Family Steak Houses, Inc., a South
Carolina corporation, together with any successor or assign
thereof.
"Confidential Information" is defined in Section 20.
"Consolidated Net Assets" means, for the Company and its
Subsidiaries on a consolidated basis, total assets less all
Restricted Investments less current liabilities.
"Consolidated Net Worth" means, as of any date with respect
to the Obligors and their Subsidiaries on a consolidated basis,
shareholders' equity or net worth, as determined in accordance
with GAAP; provided that, solely for purposes of calculating
Consolidated Net Worth as such term is used in Section 10.1, such
computation shall not take into account any non-cash losses that
may result from (i) the adoption after the date of the Closing of
FAS 133 (Accounting for Derivative Instruments and Hedging
Activities) or (ii) any other change after the Closing Date in
GAAP that requires either the writing down of assets or the
writing up of liabilities.
"Contribution Agreement" is defined in Section 4.11(b).
"Control Event" means:
(a) the execution by the Company or any of its
Subsidiaries or Affiliates of any agreement or letter of
intent with respect to any proposed transaction or event or
series of transactions or events which, individually or in
the aggregate, may reasonably be expected to result in a
Change in Control;
(b) the execution of any written agreement which, when
fully performed by the parties thereto, would result in a
Change in Control, or
(c) the making of any written offer by any person (as
such term is used in section 13(d) and section 14(d)(2) of
the Exchange Act as in effect on the date of the Closing) or
related persons constituting a group (as such term is used
in Rule 13d-5 under the Exchange Act as in effect on the
date of the Closing) to the holders of the Voting Stock of
the Company, which offer, if accepted by the requisite
number of holders, would result in a Change in Control.
"Credit Documents" means, collectively, that certain Credit
Agreement dated as of January 28, 2000 by and among the Company,
certain Subsidiaries, as guarantors, the Lenders (as defined
therein) from time to time party thereto, Bank of America, N.A.,
as Administrative Agent, First Union National Bank, as
syndication agent, Wachovia Bank, N.A., as documentation agent,
and SunTrust Bank, Atlanta, as senior managing agent, (ii) all
documents and agreements executed and delivered in connection
therewith, and (iii) (except as otherwise provided herein) all
amendments, restatements, extensions, renewals, refinancings and
substitutions thereof, in whole or in part.
"Credit Facility" means the revolving credit, letter of
credit and swingline facility extended to the Company pursuant to
the Credit Documents.
"Debt" means, with respect to any Person, without
duplication,
(a) its liabilities for borrowed money and its redemption
obligations in respect of mandatorily redeemable Preferred Stock;
(b) its liabilities for the deferred purchase price of
property acquired by such Person (excluding accounts payable
arising in the ordinary course of business but including, without
limitation, all liabilities created or arising under any
conditional sale or other title retention agreement with respect
to any such property);
(c) all liabilities appearing on its balance sheet in
accordance with GAAP in respect of Capital Leases;
(d) all liabilities for borrowed money secured by any Lien
with respect to any property owned by such Person (whether or not
it has assumed or otherwise become liable for such liabilities);
and
(e) any Guaranty of such Person with respect to liabilities
of a type described in any of clauses (a) through (d) hereof.
Debt of any Person shall include all obligations of such Person
of the character described in clauses (a) through (d) to the
extent such Person remains legally liable in respect thereof
notwithstanding that any such obligation is deemed to be
extinguished under GAAP.
"Default" means an event or condition the occurrence or
existence of which would, with the lapse of time or the giving of
notice or both, become an Event of Default.
"Default Rate" means that rate of interest that is 2% per
annum above the rate of interest stated in clause (a) of the
first paragraph of the Notes.
"Disposition Value" means, at any time, with respect to any
property
(a) in the case of property that does not constitute
the Equity Interests of a Subsidiary, the book value
thereof, valued at the time of such disposition in good
faith by the Company, and
(b) in the case of property that constitutes the
Equity Interests of a Subsidiary, an amount equal to that
percentage of the book value of the assets of the Subsidiary
that issued such stock as is equal to the percentage that
the book value of such Subsidiary Stock represents of the
book value represented by all of the outstanding Capital
Stock of such Subsidiary (assuming, in making such
calculations, that all Securities convertible into such
Capital Stock are so converted and giving full effect to all
transactions that would occur or be required in connection
with such conversion) determined at the time of the
disposition thereof, in good faith by the Company.
"Distribution" means, in respect of any corporation,
association or other business entity:
(a) dividends or other distributions or payments on
Capital Stock or other Equity Interest of such corporation,
association or other business entity (except distributions
in such stock or other equity interest); and
(b) the redemption or acquisition of such stock or
other Equity Interests (except when solely in exchange for
such stock or other Equity Interests) unless made,
contemporaneously, from the net proceeds of a sale of such
stock or other Equity Interests.
"Dollars" and "$" means dollars in lawful currency of the
United States of America.
"Domestic Subsidiaries" means all direct and indirect
Subsidiaries of the Company that are domiciled, incorporated or
organized under the laws of any state of the United States of
America or the District of Columbia (or have any material assets
located in the United States of America or the District of
Columbia) whether existing as of the date hereof or hereafter
created or acquired.
"EBITDA" means, for any period with respect to the Obligors
and their Subsidiaries on a consolidated basis, an amount equal
to the sum of (a) Net Income for such period (excluding the
effect of non-cash losses or any extraordinary or other non-
recurring gains) plus (b) an amount which, in the determination
of Net Income for such period has been deducted for (i) Interest
Expense for such period, (ii) total Federal, state, foreign or
other income taxes for such period and (iii) all depreciation and
amortization for such period, all as determined in accordance
with GAAP.
"EBITR" means, for any period with respect to the Obligors
and their Subsidiaries on a consolidated basis, an amount equal
to the sum of (a) Net Income for such period (excluding the
effect of any non-cash losses or extraordinary or other non-
recurring gains) plus (b) an amount which, in the determination
of Net Income for such period, has been deducted for (i) Interest
Expense for such period, (ii) total Federal, state, foreign or
other income taxes for such period and (iii) Rent Expense for
such period.
"Environmental Laws" means any and all Federal, state,
local, and foreign statutes, laws, regulations, ordinances,
rules, judgments, orders, decrees, permits, concessions, grants,
franchises, licenses, agreements or governmental restrictions
relating to pollution and the protection of the environment or
the release of any materials into the environment, including but
not limited to those related to hazardous substances or wastes,
air emissions and discharges to waste or public systems.
"Equity Interests" means Capital Stock and all warrants,
options or other rights to acquire Capital Stock.
"Equity Issuance" means any issuance by any Obligor to any
Person of (a) shares of its Capital Stock or other equity
interests, (b) any shares of its Capital Stock or other equity
interests pursuant to the exercise of options (other than Capital
Stock issued to employees and directors pursuant to employees or
directors stock option plans and Capital Stock issued to
consultants) or warrants or (c) any shares of its Capital Stock
or other equity interests pursuant to the conversion of any debt
securities to equity. The amount of any Equity Issuance shall be
the net cash proceeds derived therefrom, including, in the case
of any conversion of any debt securities into equity, the
principal amount of such debt.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the rules and regulations
promulgated thereunder from time to time in effect.
"ERISA Affiliate" means any trade or business (whether or
not incorporated) that is treated as a single employer together
with the Company under section 414 of the Code.
"Event of Default" is defined in Section 11.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Fair Market Value" means, at any time, the sale value of
property that would be realized in an arm's length sale at such
time between an informed and willing buyer and an informed and
willing seller, under no compulsion to buy or sell, respectively.
"Financing Documents" means, collectively, each of this
Agreement, the Notes, the Subsidiary Guarantee, the Contribution
Agreement, the Intercreditor Agreement, the Collateral Documents,
and all other related agreements, documents and instruments
issued or delivered hereunder or thereunder or pursuant hereto or
thereto.
"First Tier Foreign Subsidiary" means each Foreign
Subsidiary in which any one or more of the Obligors owns directly
more than 50%, in the aggregate, of the Voting Stock of such
Foreign Subsidiary.
"Fixed Charge Coverage Ratio" means, at any time, the ratio
of:
(a) EBITR for the prior twelve month period to
(b) the sum of (i) cash Interest Expense for the prior
twelve month period plus (ii) Scheduled Funded Debt Payments
for the prior twelve month period plus (iii) Rent Expense
for the prior twelve month period.
"Foreign Subsidiary" means any Subsidiary of the Company or
any other Obligor that is not a Domestic Subsidiary.
"Funded Debt" means, without duplication, the sum of:
(a) all outstanding Indebtedness (other than (i)
Hedging Agreements and (ii) Indebtedness owing from one
Obligor to another Obligor) of the Obligors and their
Subsidiaries for borrowed money;
(b) all purchase money Indebtedness of the Obligors
and their Subsidiaries;
(c) the principal portion of all obligations of the
Obligors and their Subsidiaries under Capital Leases;
(d) all obligations, contingent or otherwise, relative
to the face amount of all letters of credit, whether or not
drawn, and banker's acceptances created for the account of
an Obligor or its Subsidiaries (it being understood that, to
the extent an undrawn letter of credit supports another
obligation consisting of Indebtedness, in calculating
aggregate Indebtedness only such other obligation shall be
included);
(e) all Guaranties of the Obligors and their
Subsidiaries with respect to Funded Debt of another Person;
(f) all Funded Debt of another entity secured by a
Lien on any property of the Obligors and their Subsidiaries
whether or not such Funded Debt has been assumed by an
Obligor or any of its Subsidiaries;
(g) all Funded Debt of any partnership or
unincorporated joint venture to the extent an Obligor or one
of its Subsidiaries is legally obligated or has a reasonable
expectation of being liable with respect thereto, net of any
assets of such partnership or joint venture; and
(h) the principal balance outstanding under 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.
"GAAP" means generally accepted accounting principles as in
effect from time to time in the United States of America.
"Governmental Authority" means:
(a) the government of (i) the United States of America
or any State or other political subdivision thereof, or (ii)
any jurisdiction in which the Company or any Subsidiary
conducts all or any part of its business, or which asserts
jurisdiction over any properties of the Company or any
Subsidiary, or
(b) any entity exercising executive, legislative,
judicial, regulatory or administrative functions of, or
pertaining to, any such government.
"Guaranty" means, with respect to any Person, any
obligation (except the endorsement in the ordinary course of
business of negotiable instruments for deposit or collection) of
such Person guaranteeing or in effect guaranteeing any
indebtedness, dividend or other obligation of any other Person in
any manner, whether directly or indirectly, including (without
limitation) obligations incurred through an agreement, contingent
or otherwise, by such Person:
(a) to purchase such indebtedness or obligation or any
property constituting security therefor;
(b) to advance or supply funds (i) for the purchase or
payment of such indebtedness or obligation, or (ii) to
maintain any working capital or other balance sheet
condition or any income statement condition of any other
Person or otherwise to advance or make available funds for
the purchase or payment of such indebtedness or obligation;
(c) to lease properties or to purchase properties or
services primarily for the purpose of assuring the owner of
such indebtedness or obligation of the ability of any other
Person to make payment of the indebtedness or obligation; or
(d) otherwise to assure the owner of such indebtedness
or obligation against loss in respect thereof.
In any computation of the indebtedness or other liabilities of
the obligor under any Guaranty, the indebtedness or other
obligations that are the subject of such Guaranty shall be
assumed to be direct obligations of such obligor.
"Hazardous Material" means any and all pollutants, toxic or
hazardous wastes or any other substances that might pose a hazard
to health or safety, the removal of which may be required or the
generation, manufacture, refining, production, processing,
treatment, storage, handling, transportation, transfer, use,
disposal, release, discharge, spillage, seepage, or filtration of
which is or shall be restricted, prohibited or penalized by any
applicable law (including, without limitation, asbestos, urea
formaldehyde foam insulation and polycholorinated biphenyls).
"Hedging Agreements" means any interest rate protection
agreements, foreign currency exchange agreements, currency swap
agreements, commodity purchase or option agreements or other
interest or exchange rate hedging agreements, in each case,
entered into or purchased by an Obligor.
"holder" means, with respect to any Note, the Person in
whose name such Note is registered in the register maintained by
the Company pursuant to Section 13.1.
"Indebtedness" with respect to any Person means, at any
time, without duplication,
(a) its Debt;
(b) all its liabilities in respect of letters of
credit or instruments serving a similar function issued or
accepted for its account by banks and other financial
institutions (whether or not representing obligations for
borrowed money);
(c) Swaps of such Person; and
(d) any Guaranty of such Person with respect to
liabilities of a type described in any of clauses (a)
through (c) hereof.
Indebtedness of any Person shall include all obligations of such
Person of the character described in clauses (a) through (c) to
the extent such Person remains legally liable in respect thereof
notwithstanding that any such obligation is deemed to be
extinguished under GAAP.
"Initial Capital Expenditure Basket" is defined in Section
10.13.
"Institutional Investor" means (a) any original purchaser of
a Note, (b) any holder of a Note holding more than 5% of the
aggregate principal amount of the Notes then outstanding, and (c)
any bank, trust company, savings and loan association or other
financial institution, any pension plan, any investment company,
any insurance company, any broker or dealer, or any other similar
financial institution or entity, regardless of legal form.
"Intercreditor Agreement" means the Amended and Restated
Intercreditor and Collateral Agency Agreement, dated as of the
date hereof, by and among the initial purchasers of the 2000
Senior Notes, the Collateral Agent and Bank of America, N.A., as
administrative agent for the Lenders, and acknowledged and agreed
to by the Company and the Subsidiary Guarantors, as amended,
supplemented, restated or otherwise modified from time to time,
including without limitation pursuant to the amendment
contemplated in Section 4.12 hereof.
"Interest Expense" means, for any period, with respect to
the Obligors and their Subsidiaries on a consolidated basis, all
interest expense, including the interest component under Capital
Leases, as determined in accordance with GAAP.
"Lender" has the meaning assigned to such term in the
Intercreditor Agreement.
"Leverage Ratio" means, as of the end of each fiscal
quarter, the ratio of (a) total Funded Debt on such date to (b)
EBITDA for the twelve month period ending on such date.
"Lien" means, with respect to any Person, any mortgage,
lien, pledge, charge, security interest or other encumbrance, or
any interest or title of any vendor, lessor, lender or other
secured party to or of such Person under any conditional sale or
other title retention agreement (other than an operating lease)
or Capital Lease, upon or with respect to any property or asset
of such Person (including in the case of stock, stockholder
agreements, voting trust agreements and all similar
arrangements).
"Make-Whole Amount" is defined in Section 8.7.
"Material" means material in relation to the business,
operations, affairs, financial condition, assets, properties, or
prospects of the Company and its Subsidiaries taken as a whole.
"Material Adverse Effect" means a material adverse effect on
(a) the business, operations, affairs, financial condition,
assets or properties of the Company and its Subsidiaries taken as
a whole, or (b) the ability of the Company or any Subsidiary to
perform its obligations under any one or more of this Agreement,
the Notes, the Subsidiary Guarantee, the Contribution Agreement,
the Pledge Agreement or the Intercreditor Agreement, as the case
may be, or (c) the validity or enforceability of any one or more
of such documents.
"Material Subsidiary" shall mean (i) each Subsidiary set
forth on Schedule 4.11, (ii) each other Subsidiary of the
Company, now existing or hereinafter established or acquired,
that has or acquires Consolidated Net Assets in excess of
$1,000,000 or that accounted for or produced more than 5% of
EBITDA on a consolidated basis during any of the three most
recently completed fiscal years of the Company, and (iii) any
Subsidiary that owns, licenses or sublicenses any intellectual
property (such as trademarks, trade names and patents) in
connection with the operation of the business of the Company
and/or any of its Subsidiaries.
"Maximum Legal Rate of Interest" means the maximum rate of
interest that a holder of Notes may from time to time legally
charge the Company by agreement and in regard to which the
Company would be prevented successfully from raising the claim or
defense of usury under the Applicable Interest Law as now or
hereafter construed by courts having appropriate jurisdiction.
"Multiemployer Plan" means any Plan that is a "multiemployer
plan" (as such term is defined in section 4001(a)(3) of ERISA).
"Net Income" means, for any period, the net income after
taxes for such period of the Obligors and their Subsidiaries on a
consolidated basis, as determined in accordance with GAAP.
"Net Proceeds" means the aggregate cash proceeds received by
the Company or any of its Subsidiaries in respect of any Asset
Sale (including, without limitation, any cash received upon the
sale or other disposition of any non-cash consideration received
in any Asset Sale), net of the direct costs relating to such
Asset Sale (including, without limitation, legal, accounting and
investment banking fees, sales commissions), taxes paid or
payable as a result thereof (after taking into account any
available tax credits or deductions in respect of such Asset Sale
or the property subject to the Asset Sale and any tax sharing
arrangements), amounts required to be applied to the repayment of
Debt (other than intercompany Indebtedness) secured by a Lien on
the asset or assets that were the subject of such Asset Sale and
any reserve for adjustment in respect of the sale price of such
asset or assets established in accordance with GAAP.
"Note" and "Notes" are defined in Section 1.
"Obligor" means and includes each of the Company and the
Subsidiary Guarantors.
"Officer's Certificate" means a certificate of a Senior
Financial Officer or of any other officer of the Company whose
responsibilities extend to the subject matter of such
certificate.
"Operating Leases" means, as applied to any Person, any
lease (including, without limitation, leases which may be
terminated by the lessee at any time) of any property which is
not a Capital Lease other than any such lease in which such
Person is the lessor.
"PBGC" means the Pension Benefit Guaranty Corporation
referred to and defined in ERISA or any successor thereto.
"Person" means an individual, partnership, corporation,
limited liability company, association, trust, unincorporated
organization, or a government or agency or political subdivision
thereof.
"Plan" means an "employee benefit plan" (as defined in
section 3(3) of ERISA) that is or, within the preceding five
years, has been established or maintained, or to which
contributions are or, within the preceding five years, have been
made or required to be made, by the Company or any ERISA
Affiliate or with respect to which the Company or any ERISA
Affiliate may have any liability.
"Pledge Agreement" means that certain Amended and Restated
Pledge Agreement, dated as of the date hereof, by and among the
Company, certain of its Subsidiaries and the Collateral Agent, as
amended, supplemented, restated or otherwise modified from time
to time.
"Preferred Stock" means any class of capital stock of a
corporation that is preferred over any other class of capital
stock of such corporation as to the payment of dividends or the
payment of any amount upon liquidation or dissolution of such
corporation.
"Priority Debt" shall mean, with respect to the Company, at
any time, without duplication, the sum of:
(a) all Debt of Subsidiaries (other than such Debt
held by the Company or a Wholly-Owned Subsidiary thereof and
other than the Credit Facility);
(b) Debt of the Company and any Subsidiary (other than
such Debt held by the Company or a Wholly-Owned Subsidiary
thereof and other than the Credit Facility) secured by any
Lien other than Liens described in paragraphs (a), (b), (c),
(e), (f), (g) ,(h) and (i) of Section 10.6 hereof, except
that Liens described in paragraph 10.6(i) shall be excluded
from this calculation to the extent that such Liens consist
of pledges by the Company and its Subsidiaries of Capital
Stock pursuant to the Credit Facility; and
(c) all Preferred Stock of Subsidiaries owned by a
Person other than the Company or a Wholly-Owned Subsidiary
thereof.
"property" or "properties" means, unless otherwise
specifically limited, real or personal property of any kind,
tangible or intangible, choate or inchoate.
"Proposed Prepayment Date" is defined in Section 8.3(c).
"PTE" is defined in Section 6.2(a).
"Purchasers" means and includes you.
"QPAM Exemption" means Prohibited Transaction Class
Exemption 84-14 issued by the United States Department of Labor.
"Rent Expense" means, for any period, the total rent expense
for Operating Leases of the Obligors and their Subsidiaries on a
consolidated basis, as determined in accordance with GAAP.
"Required Holders" means, at any time, the holders of at
least a majority in principal amount of the Notes at the time
outstanding (exclusive of Notes then owned by the Company or any
of its Affiliates).
"Responsible Officer" means the chief financial officer, the
controller, the general counsel or any other officer of the
Company who is directly responsible for the administration by the
Company of this Agreement.
"Restricted Investments" shall mean any investments in
securities or extensions of credit by the Company and its
Subsidiaries other than:
(a) direct obligations of the United States of America
or any agency or instrumentality of the United States of
America, the payment or guarantee of which constitutes a
full faith and credit obligation of the United States of
America, in each case maturing no later than one year from
the date of acquisition;
(b) certificates of deposit maturing no later than one
year from the date of acquisition issued by U.S. commercial
banks having a combined capital and surplus of over
$200,000,000 and having a long-term debt rating of at least
A- by Standard & Poor's Ratings Group, a Division of McGraw
Hill, Inc. or at least A3 by Moody's Investors Service,
Inc.;
(c) commercial paper of a domestic issuer rated at
least A-1 by Standard & Poor's Ratings Group, a Division of
McGraw Hill, Inc. or at least P-1 by Moody's Investors
Service, Inc. and maturing not more than 270 days after the
date of acquisition;
(d) investments in or loans to Subsidiary Guarantors
or to any Person that concurrently with such investment
becomes a Subsidiary Guarantor, provided, however, that
investments may be made in any Wholly-Owned Subsidiary if,
as contemplated by Section 9.7 hereof, no Subsidiary is
required to be a Subsidiary Guarantor;
(e) investments or extensions of credit made in the
ordinary course of business and consistent with past
practice; and
(f) other investments or extensions of credit not
exceeding, at any time, 15% of Consolidated Net Worth at
such time.
"Restricted Payments" means:
(a) any Distribution in respect of the Company or any
Subsidiary (other than on account of Capital Stock or other
equity interests of a Subsidiary owned legally and
beneficially by the Company or another Subsidiary),
including, without limitation, any Distribution resulting in
the acquisition by the Company of Securities which would
constitute treasury stock; and
(b) any payment, repayment, redemption, retirement,
repurchase or other acquisition, direct or indirect, by the
Company or any Subsidiary of, on account of, or in respect
of, the principal of any Subordinated Debt (or any
installment thereof) prior to the regularly scheduled
maturity date thereof (as in effect on the date such
Subordinated Debt was originally incurred).
"Secured Parties" means and includes the Lenders and the
holders from time to time of the Notes and the 2000 Senior Notes.
"Securities Act" means the Securities Act of 1933, as
amended from time to time.
"Security" has the meaning set forth in section 2(l) of the
Securities Act of 1933, as amended.
"Senior Financial Officer" means the chief financial
officer, chief accounting officer, treasurer or comptroller of
the Company.
"Scheduled Funded Debt Payments" means, as of the end of
each fiscal quarter of the Company, for the Obligors and their
Subsidiaries on a consolidated basis, the sum of all scheduled
payments of principal on Funded Debt for the applicable period
ending on such date (including the principal component of
payments due on Capital Leases during the applicable period
ending on such date, but excluding scheduled payments on
termination of the Credit Facility); it being understood that
Scheduled Funded Debt Payments shall not include the voluntary
prepayments or the mandatory prepayments required pursuant to
Section 3.3 of the Credit Facility and Section 8.2 and Section
8.3 hereof.
"Share Repurchase Program" means the share repurchase
program authorized by the board of directors of the Company.
"Source" is defined in Section 6.2.
"Subordinated Debt" means any Debt that is in any manner
subordinated in right of payment or security in any respect to
Debt evidenced by the Notes.
"Subsidiary" means, as to any Person, any corporation,
association or other business entity in which such Person or one
or more of its Subsidiaries or such Person and one or more of its
Subsidiaries owns sufficient equity or voting interests to enable
it or them (as a group) ordinarily, in the absence of
contingencies, to elect a majority of the directors (or Persons
performing similar functions) of such entity, and any partnership
or joint venture if more than a 50% interest in the profits or
capital thereof is owned by such Person or one or more of its
Subsidiaries or such Person and one or more of its Subsidiaries
(unless such partnership can and does ordinarily take major
business actions without the prior approval of such Person or one
or more of its Subsidiaries). Unless the context otherwise
clearly requires, any reference to a "Subsidiary" is a reference
to a Subsidiary of the Company.
"Subsidiary Guarantee" is defined in Section 4.11(a).
"Subsidiary Guarantor" is defined in Section 4.11(a).
"Substantial Amount" means, with respect to any Asset Sale
during a fiscal year, any portion of property of the Company and
its Subsidiaries, if (a) the Disposition Value of such property,
when added to the Disposition Value of all other property of the
Company and its Subsidiaries that was subject to an Asset Sale
during such fiscal year, exceeds an amount equal to 15% of
Consolidated Net Assets determined as of the last day of the
immediately preceding fiscal year of the Company or (b) such
property and all other property of the Company and its
Subsidiaries that was subject to an Asset Sale during such fiscal
year accounts, in the aggregate, for more than 15% of Net Income
determined as of the last day of the immediately preceding fiscal
year of the Company. Notwithstanding the foregoing, the Company
may from time to time elect to exclude from each determination of
Substantial Amount one or more Asset Sales specified in
reasonable detail in one or more certificates delivered pursuant
to Section 7.2(a), provided that the aggregate of the Disposition
Values of all Asset Sales in each fiscal year of the Company so
excluded pursuant to this sentence after the date of the Closing
shall not exceed $10,000,000.
"Swaps" means, with respect to any Person, payment
obligations with respect to interest rate swaps, currency swaps
and similar obligations obligating such Person to make payments,
whether periodically or upon the happening of a contingency. For
the purposes of this Agreement, the amount of the obligation
under any Swap shall be the amount determined in respect thereof
as of the end of the then most recently ended fiscal quarter of
such Person, based on the assumption that such Swap had
terminated at the end of such fiscal quarter, and in making such
determination, if any agreement relating to such Swap provides
for the netting of amounts payable by and to such Person
thereunder or if any such agreement provides for the simultaneous
payment of amounts by and to such Person, then in each such case,
the amount of such obligation shall be the net amount so
determined.
"2000 Note Agreements" means, collectively, those certain
Note Purchase Agreements, each dated as of January 28, 2000,
between the Company and each initial purchaser of the 2000 Senior
Notes, together with (except as otherwise provided herein) all
amendments, restatements, extensions, renewals, refinancings and
substitutions thereof, in whole or in part.
"2000 Note Documents" means, collectively, (i) the 2000 Note
Agreements, (ii) all 2000 Senior Notes, (iii) all documents and
instruments executed in connection therewith, and (iv) (except as
otherwise provided herein) all amendments, restatements,
extensions, renewals, refinancings and substitutions thereof, in
whole or in part.
"2000 Senior Notes" means, collectively, those certain 9.02%
Senior Notes due January 28, 2008 issued by the Company.
"Trimark" means Trimark Financial Corporation, a corporation
organized under the laws of Ontario, Canada.
"Unused Capital Expenditure Allowance" is defined in
Section 10.13.
"Voting Stock" means Capital Stock of any class or classes
of a Person the holders of which are ordinarily, in the absence
of contingencies, entitled to elect corporate directors (or
Persons performing similar functions).
"Wholly-Owned Subsidiary" means, at any time, any Subsidiary
one hundred percent (100%) of all of the equity interests (except
directors' qualifying shares) and voting interests of which are
owned by any one or more of the Company and the Company's other
Wholly-Owned Subsidiaries at such time.
SCHEDULE C
RYAN'S FAMILY STEAK HOUSES, INC.
ACTUAL AND PLANNED STORE CLOSINGS
AS OF: 7/2/2003
<table>
ITEM RYAN'S NAME NET BOOK VALUE
# # ADDRESS STATUS AT 7/2/2003
<s> <c> <c> <c> <c>
1 121 Montgomery-1 Closed 819,321
4135 Atlanta Highway
Montgomery, AL 36109
2 174 Kentwood Closed 1,029,263
3005 Broadmoor
Kentwood, MI 49508
3 712 Columbus-1 Closed 803,863
6075 E. Livingston Avenue
Columbus, OH 43232
4 713 Rock Hill Closed 775,742
824 Hwy 21 Bypass
Rock Hill, SC 29730
5 715 Dayton Closed 862,752
4111 Little York Road
Dayton, OH 45414
6 716 Beaumont Closed 1,341,422
4151 Phelan Blvd.
Beaumont, TX 77707
7 718 Rocky Mount Closed 1,066,545
1968 Stone Rose Drive
Rocky Mount, NC 27804
8 186 Springfield Plan to 781,582
3150 Chatham Road close on
Springfield, IL 62704 7/27/2003
9 180 Pensacola Plan to 1,245,567
301 Brent Lane close on
Pensacola, FL 32503 8/3/2003
</table>
RYAN'S FAMILY STEAK HOUSES, INC.
PROPERTY (LAND ONLY) FOR SALE
AS OF: 7/2/2003
<table>
ITEM NET BOOK VALUE
# LOCATION AT 7/2/2003
<s> <c> <c>
1 Campbellsville, KY 429,957
2 Crowley, LA 376,302
3 Fayetteville, TN 484,904
4 Florence, SC 430,842
5 Freeport, IL 437,668
6 I-85@Greer, SC 725,265
7 Kirksville, MO 468,186
8 Lawrenceburg, TN 467,592
9 Plano, IL 442,749
10 Plymouth, IN 426,172
11 Rockingham, NC 469,617
12 S. Boston, VA 340,421
13 Siloam Springs, AR 330,590
14 Starkville, MS 407,326
15 Winchester, TN 433,187
</table>
SCHEDULE D
PAYMENT INSTRUCTIONS AT CLOSING
Wachovia Bank, N.A.
400 S. Tryon Street
Charlotte, NC 28202
ABA # 053000219
Account # 2079900122541
SCHEDULE 4.9
CHANGES IN CORPORATE STRUCTURE
The Company has dissolved its former subsidiaries, Ryan's
Hoosier Group, LP, Ryan's Mega Manufacturing Group, LP and
Ryan's Family Steak Houses TLC, Inc., and has succeeded to
all of the liabilities of those entities. These liabilities
are immaterial to the Company and its subsidiaries taken as
a whole.
SCHEDULE 4.11
INITIAL GUARANTEEING SUBSIDIARIES
Big R Procurement Company, LLC, a Delaware limited liability
company
Ryan's Family Steak Houses East, Inc., a Delaware
corporation
Ryan's Properties, Inc. , a Delaware corporation
Rymark Holdings, Inc. , a Delaware corporation
Fire Mountain Properties, LLC, a Delaware limited liability
company
SCHEDULE 5.3
DISCLOSURE MATERIALS
Nothing to disclose.
SCHEDULE 5.4
SUBSIDIARIES OF THE COMPANY AND OWNERSHIP OF SUBSIDIARY
STOCK
<table>
(a)(i) The Company's Subsidiaries
Jurisdiction % Owned by
Name of Company(or
Organization Subsidiaries)
<s> <c> <c>
Big R Procurement Company, DE 100%
LLC*
Ryan's Family Steak Houses DE 100%
East, Inc.*
Ryan's Properties, Inc.* DE 100%
Rymark Holdings, Inc.* DE 100%
Fire Mountain Properties, DE 100%
LLC*
</table>
* Domestic Subsidiary
Pursuant to clause (i) of the definition of "Material
Subsidiary" in Schedule B to the Agreement, all Subsidiaries
listed on Schedule 4.11 (which list is identical to the list
above on this Schedule) are Material Subsidiaries.
(a)(ii) The Company's Affiliates (Other than Subsidiaries)
Based on Schedules 13G filed in February 2003, the following
organizations owned 5% or more of the Company's common stock
at the time of their filing:
<table>
Percent
Name of Beneficial Owner Ownership
<s> <c>
Private Capital Management, Inc. 15.4%
FMR Corp. 6.2%
Barclays Global Investors, NA 5.9%
Dimensional Fund Advisors Inc. 5.5%
</table>
(a)(iii) The Company's Directors and Executive Officers
Directors
Charles D. Way
G. Edwin McCranie
Barry L. Edwards
James M. Shoemaker,
Jr.
Harold K. Roberts, Jr.
James D. Cockman
Brian S. MacKenzie
Executive Officers
Charles D. Way
G. Edwin McCranie
Janet J. Gleitz
Morgan A. Graham
Fred T. Grant, Jr.
James R. Hart
Alan E. Shaw
Ilene T. Turbow
SCHEDULE 5.5
FINANCIAL STATEMENTS
Audited financial statements for fiscal year ended January
1, 2003
Unaudited financial statements for fiscal quarter ended
April 2, 2003
SCHEDULE 5.8
CERTAIN LITIGATION
From time to time, the Company is involved in various legal
claims and litigation arising in the normal course of its
business. Based on currently-known legal actions,
management believes that, as a result of its legal defenses
and insurance arrangements, none of these actions, if
decided adversely, would have a material effect on the
Company's business or financial condition, taken as a whole.
As disclosed most recently in the Company's first quarter
2003 Form 10-Q, a lawsuit was filed on November 12, 2002, in
the United States District Court, Middle District of
Tennessee, Nashville Division, on behalf of three plaintiffs
alleging various violations by the Company of the Fair Labor
Standards Act of 1938. The plaintiffs' attorneys have
indicated that they intend to seek class-action status on
this complaint. Management intends to vigorously defend
this lawsuit and has retained two firms to serve as co-lead
counsel for the Company. The presiding judge has recently
indicated that decisions as to further class notification
and any arbitration procedures could be expected in August
or September 2003. Any potential financial impact to the
Company cannot be determined at this time.
SCHEDULE 5.11
PATENTS, ETC.
Nothing to disclose.
SCHEDULE 5.14
USE OF PROCEEDS
The Company will apply the proceeds of the sale of the Notes
to repay a portion of existing Debt outstanding under the
Credit Facility.
SCHEDULE 5.15
EXISTING DEBT AND LIENS
(a) At closing, the Company and its Subsidiaries will have
the following Debt and Liens:
Debt under the Credit Facility and the 2000 Senior
Notes, and Liens on the Capital Stock of Subsidiaries
securing such Debt on a pari passu basis with the
Notes.
Capital leases with respect to 13 copiers or fax
machines in an aggregate unpaid amount (as of July 2,
2003) of $214,496. These leases are secured by liens
on the copiers.
7 letters of credit in an aggregate face amount of
$8,973,767. As of July 2, 2003, no amounts were drawn with
respect to these letters of credit.
Guaranties by the Company of loans from First Union
National Bank for purchases by operating partners of
the Company's stock pursuant to its operating partner
and related programs. As of July 1, 2003, there were
146 such loans, in an aggregate outstanding amount of
$941,556.
(b) Nothing to disclose.
EXHIBIT 1 TO NOTE PURCHASE AGREEMENT
[Form of Note]
THIS NOTE HAS NOT BEEN REGISTERED PURSUANT TO THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), OR QUALIFIED PURSUANT TO ANY APPLICABLE STATE SECURITIES
LAW. THIS NOTE MAY BE RESOLD ONLY IF REGISTERED PURSUANT TO THE
PROVISIONS OF THE ACT AND QUALIFIED PURSUANT TO APPLICABLE STATE
SECURITIES LAWS OR IF AN EXEMPTION FROM SUCH REGISTRATION AND
QUALIFICATION IS AVAILABLE, EXCEPT UNDER CIRCUMSTANCES WHERE
NEITHER SUCH REGISTRATION, QUALIFICATION NOR EXEMPTION IS
REQUIRED BY LAW.
RYAN'S FAMILY STEAK HOUSES, INC.
4.65% Senior Note Due July 25, 2013
No. [_____]
[Date]
$[_______] CUSIP NUMBER: 783519
AA 9
FOR VALUE RECEIVED, the undersigned, RYAN'S FAMILY STEAK
HOUSES, INC. (herein called the "Company"), a corporation
organized and existing under the laws of the State of South
Carolina, hereby promises to pay to [___ ], or
registered assigns, the principal sum of [
] DOLLARS on [ , ], with interest (computed
on the basis of a 360-day year of twelve 30-day months) (a) on
the unpaid balance thereof at the rate of 4.65% per annum from
the date hereof, payable quarterly, on the [__]th day of each
January, April, July and October in each year, commencing on
October [__], 2003, until the principal hereof shall have become
due and payable, and (b) to the extent permitted by law on any
overdue payment (including any overdue prepayment) of principal,
any overdue payment of interest and any overdue payment of any
Make-Whole Amount (as defined in the Note Purchase Agreement
referred to below), payable quarterly as aforesaid (or, at the
option of the registered holder hereof, on demand), at a rate per
annum from time to time equal to 4.65%.
Payments of principal of, interest on and any Make-Whole
Amount with respect to this Note are to be made in lawful money
of the United States of America at address for such payments set
forth in the Note Purchase Agreement referred to below or at such
other place as the Company shall have designated by written
notice to the holder of this Note as provided in such Note
Purchase Agreement.
This Note is one of a series of Senior Notes (herein called
the "Notes") issued pursuant to the Note Purchase Agreement,
dated as of July 25, 2003 (as from time to time amended, the
"Note Purchase Agreement"), between the Company and the
Purchasers named therein and is entitled to the benefits thereof.
Each holder of this Note will be deemed, by its acceptance
hereof, (i) to have agreed to the confidentiality provisions set
forth in Section 20 of the Note Purchase Agreement and (ii) to
have made the representation set forth in Section 6.2 of the Note
Purchase Agreement.
Each holder of this Note will be deemed, by its acceptance
hereof, to have agreed to the terms of the Intercreditor
Agreement (as such term is defined in the Note Purchase
Agreement).
This Note is a registered Note and, as provided in the Note
Purchase Agreement, upon surrender of this Note for registration
of transfer, duly endorsed, or accompanied by a written
instrument of transfer duly executed, by the registered holder
hereof or such holder's attorney duly authorized in writing, a
new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat
the person in whose name this Note is registered as the owner
hereof for the purpose of receiving payment and for all other
purposes, and the Company will not be affected by any notice to
the contrary.
The Company will make required prepayments of principal on
the dates and in the amounts specified in the Note Purchase
Agreement. This Note is subject to optional prepayment, in whole
or from time to time in part, at the times and on the terms
specified in the Note Purchase Agreement, but not otherwise.
If an Event of Default, as defined in the Note Purchase
Agreement, occurs and is continuing, the principal of this Note
may be declared or otherwise become due and payable in the
manner, at the price (including any applicable Make-Whole Amount)
and with the effect provided in the Note Purchase Agreement.
THIS NOTE AND THE NOTE PURCHASE AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK, EXCLUDING CHOICE-OF-LAW PRINCIPLES OF THE LAW
OF SUCH STATE THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF A
JURISDICTION OTHER THAN SUCH STATE.
RYAN'S FAMILY STEAK HOUSES, INC.
By:
Name:
Title:
EXHIBIT 4.4(a) TO NOTE PURCHASE AGREEMENT
[FORM OF OPINION OF COUNSEL TO THE COMPANY]
EXHIBIT 4.4(b) TO NOTE PURCHASE AGREEMENT
[FORM OF OPINION OF COUNSEL TO THE PURCHASERS]
EXHIBIT 4.11(a) TO NOTE PURCHASE AGREEMENT
[Form of Subsidiary Guarantee]
SUBSIDIARY GUARANTEE AGREEMENT
This SUBSIDIARY GUARANTEE AGREEMENT, dated as of July 25,
2003 (as amended, supplemented, restated or otherwise modified
from time to time, this "Guarantee"), made by the undersigned
signatories hereto as Guarantors (each of the undersigned,
together with their respective successors and assigns,
individually a "Guarantor" and collectively the "Guarantors"),
in favor of each of the holders of the Notes (as defined below)
(collectively, together with their respective successors and
assigns, individually a "Guaranteed Party" and collectively the
"Guaranteed Parties");
W I T N E S S E T H:
WHEREAS, Ryan's Family Steak Houses, Inc., a corporation
organized and existing under the laws of the State of South
Carolina ("Parent") and the initial Guaranteed Parties have
entered into that certain Note Purchase Agreement dated as of
July 25, 2003 (as amended, supplemented, restated or otherwise
modified from time to time, the "Agreement"), pursuant to which
Parent has issued to the Guaranteed Parties its 4.65% Senior
Notes due July 25, 2013 (collectively, as amended,
supplemented, restated or otherwise modified from time to time,
the "Notes," such term to include any such notes issued in
substitution therefor pursuant to Section 13 of the Agreement),
in the aggregate principal amount of $100,000,000;
WHEREAS, Parent owns, directly or indirectly, all or a
majority of the outstanding capital stock or other equity
interests of each of the Guarantors;
WHEREAS, Parent and Guarantors share an identity of
interest as members of a consolidated group of companies
engaged in substantially similar businesses with Parent
providing certain centralized financial, accounting and
management services to each of the Guarantors by virtue of
intercompany advances and loans such that financial
accommodations extended to Parent shall inure to the direct and
material benefit of Guarantors; and
WHEREAS, consummation of the transactions pursuant to the
Agreement will facilitate expansion and enhance the overall
financial strength and stability of Parent's entire corporate
group, including the Guarantors; and
WHEREAS, the Guarantors' ability to carry on their
respective business operations is dependent on the ability of
the Parent to obtain financing; and
WHEREAS, it is a condition precedent to the initial
Guaranteed Parties' obligations to enter into the Agreement and
to purchase the Notes thereunder that Guarantors execute and
deliver this Guarantee, and Guarantors desire to execute and
deliver this Guarantee to satisfy such condition precedent; and
WHEREAS, capitalized terms used and not defined herein
have the respective meanings ascribed thereto in the Agreement;
NOW, THEREFORE, in consideration of the premises and in
order to induce the Guaranteed Parties to enter into and
perform their obligations under the Agreement, the Guarantors
hereby jointly and severally agree as follows:
SECTION 1. Guarantee. The Guarantors hereby, jointly and
severally, irrevocably, absolutely and unconditionally
guarantee the due and punctual payment of all principal of, and
Make-Whole Amount, if any, and interest on, the Notes and all
other obligations owing by Parent to the Guaranteed Parties, or
any of them, jointly or severally under the Agreement, the
Notes and the other documents, instruments and agreements
relating to the transactions contemplated by the Agreement, and
all renewals, extensions, modifications and refinancings
thereof, now or hereafter owing, whether for principal,
interest, Make-Whole Amount, fees, expenses or otherwise,
including, without limitation, any and all reasonable out-of-
pocket expenses (including reasonable attorneys' fees and
expenses actually incurred) incurred by the Guaranteed Parties
in enforcing any rights under this Guarantee (collectively, the
"Guaranteed Obligations") including, without limitation, all
interest which, but for the filing of a petition in bankruptcy
with respect to Parent (or any receivership, liquidation,
reorganization or similar case or proceeding in connection
therewith, relative to the Company or its property), would
accrue on any principal portion of the Guaranteed Obligations.
Any and all payments by the Guarantors hereunder shall be made
free and clear of and without deduction for any set-off,
counterclaim or withholding, so that, in each case, each
Guaranteed Party will receive, after giving effect to any
taxes, (but excluding taxes imposed on overall net income of
any Guaranteed Party), the full amount that it would otherwise
be entitled to receive with respect to the Guaranteed
Obligations (but without duplication of amounts for taxes
already included in the Guaranteed Obligations). Each
Guarantor acknowledges and agrees that this is a guarantee of
payment when due, and not of collection, and that, subject to
Section 13 hereof, this Guarantee may be enforced up to the
full amount of the Guaranteed Obligations without proceeding
against Parent, against any security for the Guaranteed
Obligations, against any other Guarantor or under any other
guaranty covering any portion of the Guaranteed Obligations.
SECTION 2. Guarantee Absolute. The Guarantors guarantee
that the Guaranteed Obligations will be paid strictly in
accordance with the terms of the documents, instruments and
agreements evidencing any Guaranteed Obligations, regardless of
any law, regulation or order now or hereafter in effect in any
jurisdiction affecting any of such terms or the rights of any
Guaranteed Party with respect thereto. The liability of each
Guarantor under this Guarantee shall be absolute and
unconditional in accordance with its terms and shall remain in
full force and effect without regard to, and shall not be
released, suspended, discharged, terminated or otherwise
affected by, any circumstance or occurrence whatsoever,
including, without limitation, the following (whether or not
such Guarantor consents thereto or has notice thereof):
(a) any change in the time, place or manner of
payment of, or in any other term of, all or any of the
Guaranteed Obligations, any waiver, indulgence, renewal,
extension, amendment or modification of or addition,
consent or supplement to or deletion from or any other
action or inaction under or in respect of the Agreement,
or any other documents, instruments or agreements relating
to the Guaranteed Obligations or any other instrument or
agreement referred to therein or any assignment or
transfer of any thereof;
(b) any lack of validity or enforceability of the
Agreement or any other document, instrument or agreement
referred to therein or any assignment or transfer of any
thereof;
(c) any furnishing to the Guaranteed Parties of any
additional security for the Guaranteed Obligations, or any
sale, exchange, release or surrender of, or realization
on, any security for the Guaranteed Obligations;
(d) any settlement or compromise of any of the
Guaranteed Obligations, any security therefor, or any
liability of any other party with respect to the
Guaranteed Obligations, or any subordination of the
payment of the Guaranteed Obligations to the payment of
any other liability of Parent;
(e) any bankruptcy, insolvency, reorganization,
composition, adjustment, dissolution, liquidation or other
like proceeding relating to any Guarantor or Parent, or
any action taken with respect to this Guarantee by any
trustee or receiver, or by any court, in any such
proceeding;
(f) failure to preserve the validity or perfection
of any security interest or lien on any collateral, or any
amendment or waiver of or consent to departure from any
guaranty or security, for all or any of the Guaranteed
Obligations;
(g) any application of sums paid by Parent or any
other Person with respect to the liabilities of Parent to
the Guaranteed Parties, regardless of what liabilities of
Parent remain unpaid;
(h) any act or failure to act by any Guaranteed
Party which may adversely affect a Guarantor's subrogation
rights, if any, against Parent to recover payments made
under this Guarantee; and
(i) any other circumstance which might otherwise
constitute a defense available to, or a discharge of, any
Guarantor.
If claim is ever made upon any Guaranteed Party for repayment
or recovery of any amount or amounts received in payment or on
account of any of the Guaranteed Obligations, and any
Guaranteed Party repays all or part of said amount by reason of
(a) any judgment, decree or order of any court or
administrative body having jurisdiction over the Guaranteed
Party or any of its property, or (b) any settlement or
compromise of any such claim effected by the Guaranteed Party
with any such claimant (including Parent or a trustee in
bankruptcy for Parent), then and in such event each Guarantor
agrees that any such judgment, decree, order, settlement or
compromise shall be binding on it, notwithstanding any
revocation hereof or the cancellation of the Agreement or the
other documents, instruments and agreements evidencing any
Guaranteed Obligations, and each of the Guarantors shall be and
remain liable to the Guaranteed Party for the amounts so repaid
or recovered to the same extent as if such amount had never
originally been paid to the Guaranteed Party.
This Guarantee shall remain in effect and shall be
enforceable against each Guarantor notwithstanding any sale,
transfer or other disposition by Parent of all or any portion
of the Equity Interests of any Guarantor. Further, the
obligations of each Guarantor shall be joint and several and
the release or discharge of the obligations of one Guarantor
shall not modify, affect, release or discharge the obligations
of the other Guarantors hereunder. Further, this Guarantee
shall be enforceable against the Guarantors notwithstanding the
existence of any counterclaim that may be alleged by the Parent
against the Guaranteed Parties.
SECTION 3. Waiver. Each Guarantor hereby waives notice
of acceptance of this Guarantee, notice of any liability to
which it may apply, and further waives presentment, demand of
payment, protest, notice of dishonor or nonpayment of any such
liabilities, suit or taking of other action by the Guaranteed
Parties against, and any other notice to, Parent or any other
party liable with respect to the Guaranteed Obligations
(including the Guarantors or any other Person executing a
guaranty of the obligations of Parent).
SECTION 4. Waiver of Subrogation. Each Guarantor hereby
waives irrevocably and forever any rights against Parent which
it may acquire by way of subrogation or contribution, by any
payment made hereunder or otherwise. Each Guarantor hereby
expressly waives any claim, right or remedy which such
Guarantor may now have or hereafter acquire against Parent that
arises hereunder and/or from the performance by any Guarantor
hereunder, including, without limitation, any claim, right or
remedy of the Guaranteed Parties against Parent or any security
which the Guaranteed Parties now have or hereafter acquire,
whether or not such claim, right or remedy arises in equity,
under contract, by statute, under color of law or otherwise.
SECTION 5. Severability. Any provision of this Guarantee
which is prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
SECTION 6. Amendments, Etc. No amendment or waiver of
any provision of this Guarantee nor consent to any departure by
a Guarantor therefrom shall in any event be effective unless
the same shall be in writing executed by the Guarantor and the
Guaranteed Parties.
SECTION 7. Notices. All notices and other communications
provided for hereunder shall be given in the manner specified
in the Agreement (i) in the case of the Guaranteed Parties, at
the address specified for the Guaranteed Parties in the
Agreement, and (ii) in the case of the Guarantors, at the
respective addresses specified for such Guarantors in this
Guarantee.
SECTION 8. No Waiver; Remedies. No failure on the part
of the Guaranteed Parties to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any right
hereunder preclude any other or further exercise thereof or the
exercise of any other right. No notice to or demand on any
Guarantor in any case shall entitle such Guarantor to any other
further notice or demand in any similar or other circumstances
or constitute a waiver of the rights of the Guaranteed Parties
to any other or further action in any circumstances without
notice or demand. The remedies herein provided are cumulative
and not exclusive of any remedies provided by law.
SECTION 9. Right of Set-Off. In addition to and not in
limitation of all rights of offset that the Guaranteed Parties
may have under applicable law, the Guaranteed Parties shall,
upon the occurrence of any Event of Default and whether or not
the Guaranteed Parties have made any demand or the Guaranteed
Obligations are matured, have the right to appropriate and
apply to the payment of the Guaranteed Obligations, all
indebtedness or property then or thereafter owing by the
Guaranteed Parties to any Guarantor, whether or not related to
this Guarantee or any transaction hereunder. The Guaranteed
Parties shall promptly notify the relevant Guarantor of any
offset hereunder.
SECTION 10. Continuing Guarantee; Transfer of
Obligations. This Guarantee is a continuing guaranty and shall
(i) remain in full force and effect until payment in full of
the Guaranteed Obligations and all other amounts payable under
this Guarantee and the termination of the Agreement, (ii) be
binding upon each Guarantor, its successors and assigns, and
(iii) inure to the benefit of and be enforceable by the
Guaranteed Parties.
SECTION 11. Governing Law. THIS GUARANTEE AND THE RIGHTS
AND OBLIGATIONS OF THE PARTIES HEREUNDER, SHALL BE CONSTRUED IN
ACCORDANCE WITH AND BE GOVERNED BY THE LAWS OF THE STATE OF
NEW YORK (WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW
PRINCIPLES THEREOF).
SECTION 12. Subordination of Parent's Obligations to the
Guarantors. As an independent covenant, each Guarantor hereby
expressly covenants and agrees for the benefit of the
Guaranteed Parties that all obligations and liabilities of
Parent to such Guarantor of whatever description, including,
without limitation, all intercompany receivables of such
Guarantor from Parent ("Junior Claims") shall be subordinate
and junior in right of payment to all obligations of Parent to
the Guaranteed Parties under the terms of the Agreement and the
other documents, instruments and agreements evidencing any
Guaranteed Obligations ("Senior Claims").
If an Event of Default shall occur, then, unless and until
such Event of Default shall have been cured, waived, or shall
have ceased to exist, no direct or indirect payment (in cash,
property, securities by setoff or otherwise) shall be made by
Parent to any Guarantor on account of or in any manner in
respect of any Junior Claim except such payments and
distributions the proceeds of which shall be applied to the
payment of Senior Claims.
In the event of a Proceeding (as hereinafter defined), all
Senior Claims shall first be paid in full before any direct or
indirect payment or distribution (in cash, property, securities
by setoff or otherwise) shall be made to any Guarantor on
account of or in any manner in respect of any Junior Claim
except such payments and distributions the proceeds of which
shall be applied to the payment of Senior Claims. For the
purposes of the previous sentence, "Proceeding" means Parent or
any Guarantor shall commence a voluntary case concerning itself
under the Bankruptcy Code of 1978, as amended (the "Bankruptcy
Code"), or any other applicable bankruptcy laws; or any
involuntary case is commenced against Parent or any Guarantor;
or a custodian (as defined in the Bankruptcy Code or any other
applicable bankruptcy laws) is appointed for, or takes charge
of, all or any substantial part of the property of Parent or
any Guarantor, or Parent or any Guarantor commences any other
proceedings under any reorganization, arrangement, adjustment
of debt, relief of debtor, dissolution, insolvency or
liquidation or similar law of any jurisdiction whether now or
hereafter in effect relating to Parent or any Guarantor, or any
such proceeding is commenced against Parent or any Guarantor,
or Parent or any Guarantor is adjudicated insolvent or
bankrupt; or any order of relief or other order approving any
such case or proceeding is entered; or Parent or any Guarantor
suffers any appointment of any custodian or the like for it or
any substantial part of its property; or Parent or any
Guarantor makes a general assignment for the benefit of
creditors; or Parent or any Guarantor shall fail to pay, or
shall state that it is unable to pay, or shall be unable to
pay, its debts generally as they become due; or Parent or any
Guarantor shall call a meeting of its creditors with a view to
arranging a composition or adjustment of its debts; or Parent
or any Guarantor shall by any act or failure to act indicate
its consent to, approval of or acquiescence in any of the
foregoing; or any corporate action shall be taken by Parent or
any Guarantor for the purpose of effecting any of the
foregoing.
In the event any direct or indirect payment or
distribution is made to a Guarantor in contravention of this
Section 12, such payment or distribution shall be deemed
received in trust for the benefit of the Guaranteed Parties and
shall be immediately paid over to the Guaranteed Parties for
application against the Guaranteed Obligations in accordance
with the terms of the Agreement.
Each Guarantor agrees to execute such additional documents
as the Guaranteed Parties may reasonably request to evidence
the subordination provided for in this Section 12.
SECTION 13. Savings Clause. (a) It is the intent of each
Guarantor and the Guaranteed Parties that each Guarantor's
maximum obligations hereunder shall be, but not in excess of:
(i) in a case or proceeding commenced by or against
such Guarantor under the Bankruptcy Code on or within one
year from the date on which any of the Guaranteed
Obligations are incurred, the maximum amount which would
not otherwise cause the Guaranteed Obligations (or any
other obligations of such Guarantor to the Guaranteed
Parties) to be avoidable or unenforceable against such
Guarantor under (A) Section 548 of the Bankruptcy Code or
(B) any state fraudulent transfer or fraudulent conveyance
act or statute applied in such case or proceeding by
virtue of Section 544 of the Bankruptcy Code; or
(ii) in a case or proceeding commenced by or against
such Guarantor under the Bankruptcy Code subsequent to one
year from the date on which any of the Guaranteed
Obligations are incurred, the maximum amount which would
not otherwise cause the Guaranteed Obligations (or any
other obligations of the Guarantor to the Guaranteed
Parties) to be avoidable or unenforceable against such
Guarantor under any state fraudulent transfer or
fraudulent conveyance act or statute applied in any such
case or proceeding by virtue of Section 544 of the
Bankruptcy Code; or
(iii) in a case or proceeding commenced by or
against such Guarantor under any law, statute or
regulation other than the Bankruptcy Code (including,
without limitation, any other bankruptcy, reorganization,
arrangement, moratorium, readjustment of debt,
dissolution, liquidation or similar debtor relief laws),
the maximum amount which would not otherwise cause the
Guaranteed Obligations (or any other obligations of such
Guarantor to the Guaranteed Parties) to be avoidable or
unenforceable against such Guarantor under such law,
statute or regulation including, without limitation, any
state fraudulent transfer or fraudulent conveyance act or
statute applied in any such case or proceeding.
(The substantive laws under which the possible avoidance or
unenforceability of the Guaranteed Obligations (or any other
obligations of such Guarantor to the Guaranteed Parties) shall
be determined in any such case or proceeding shall hereinafter
be referred to as the "Avoidance Provisions").
(b) To the end set forth in Section 13(a), but only
to the extent that the Guaranteed Obligations would
otherwise be subject to avoidance under the Avoidance
Provisions if (i) such Guarantor is not deemed to have
received valuable consideration, fair value or reasonably
equivalent value for the Guaranteed Obligations, and
(ii) if the Guaranteed Obligations would render the
Guarantor insolvent, or leave the Guarantor with an
unreasonably small capital to conduct its business, or
cause the Guarantor to have incurred debts (or to have
intended to have incurred debts) beyond its ability to pay
such debts as they mature, in each case as of the time any
of the Guaranteed Obligations are deemed to have been
incurred under the Avoidance Provisions and after giving
effect to contribution as among Guarantors, the maximum
Guaranteed Obligations for which such Guarantor shall be
liable hereunder shall be reduced to that amount which,
after giving effect thereto, would not cause the
Guaranteed Obligations (or any other obligations of such
Guarantor to the Guaranteed Parties), as so reduced, to be
subject to avoidance under the Avoidance Provisions. This
Section 13(b) is intended solely to preserve the rights of
the Guaranteed Parties hereunder to the maximum extent
that would not cause the Guaranteed Obligations of any
Guarantor to be subject to avoidance under the Avoidance
Provisions, and neither such Guarantor nor any other
Person shall have any right or claim under this Section 13
as against the Guaranteed Parties that would not otherwise
be available to such Person under the Avoidance
Provisions.
SECTION 14. Information. Each of the Guarantors assumes
all responsibility for being and keeping itself informed of
Parent's financial condition and assets, and of all other
circumstances bearing upon the risk of nonpayment of the
Guaranteed Obligations and the nature, scope and extent of the
risks that such Guarantor assumes and incurs hereunder, and
agrees that none of the Guaranteed Parties will have any duty
to advise any of the Guarantors of information known to it or
any of them regarding such circumstances or risks.
SECTION 15. Survival of Agreement. All agreements,
representations and warranties made herein shall survive the
execution and delivery of this Guarantee.
SECTION 16. Counterparts. This Guarantee and any
amendments, waivers, consents or supplements may be executed in
any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and
delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same
instrument.
SECTION 17. Additional Guarantors. Upon execution and
delivery by any Subsidiary of Parent of an instrument in the
form of this Guarantee, such Subsidiary of Parent shall become
a Guarantor hereunder with the same force and effect as if
originally named a Guarantor herein (each an "Additional
Guarantor"). The execution and delivery of any such instrument
shall not require the consent of any Guarantor hereunder. The
rights and obligations of each Guarantor hereunder shall remain
in full force and effect notwithstanding the addition of any
Additional Guarantor as a party to this Guarantee.
SECTION 18. Successors and Assigns. This Guarantee shall
be binding upon the respective successors and assigns of the
Guarantors. This Guarantee shall inure to the benefit of the
respective successors and assigns of the Guaranteed Parties,
including any subsequent holder of any Notes. No Guarantor may
assign its obligations hereunder to any other Person.
[Signatures on Next Page]
IN WITNESS WHEREOF, each Guarantor and Parent caused this
Guarantee to be duly executed and delivered by their respective
duly authorized officers as of the date first above written.
[GUARANTOR]
By:
Name:
Title:
Address for Notices:
c/o Ryan's Family Steak Houses, Inc.
405 Lancaster Avenue
Greer, South Carolina 29650
Attention: Vice President, Finance/
Chief Financial Officer
SECTION 12 OF THE
FOREGOING GUARANTEE
ACKNOWLEDGED AND
AGREED TO:
RYAN'S FAMILY STEAK HOUSES, INC.
By:
Name:
Title:
EXHIBIT 4.11(b) TO NOTE PURCHASE AGREEMENT
[Form of Contribution Agreement]
CONTRIBUTION AGREEMENT
THIS CONTRIBUTION AGREEMENT, dated as of July 25, 2003
(as amended, supplemented, restated or otherwise modified from
time to time, this "Contribution Agreement"), by and among RYAN'S
FAMILY STEAK HOUSES, INC. (together with its successors and
permitted assigns, "Parent"), a corporation organized and
existing under the laws of the State of South Carolina, and each
of the undersigned signatories hereto as Guarantors (each of the
undersigned (other than Parent), together with their respective
successors and assigns, individually a "Guarantor" and
collectively the "Guarantors") for the purpose of establishing
rights and obligations of contribution among the Guarantors in
connection with the Guarantee Agreement (as such term is defined
below).
R E C I T A L S
WHEREAS, Parent has entered into that certain Note Purchase
Agreement dated as of July 25, 2003 (as amended, supplemented,
restated or otherwise modified from time to time, the
"Agreement") with the investors party thereto (collectively,
together with their respective successors and assigns,
individually a "Guaranteed Party" and collectively the
"Guaranteed Parties"), pursuant to which Parent has issued to the
Guaranteed Parties its 4.65% Senior Notes due July 25, 2013
(collectively, as amended, supplemented, restated or otherwise
modified from time to time, the "Notes," such term to include any
such notes issued in substitution therefor pursuant to Section 13
of the Agreement), in the aggregate principal amount of
$100,000,000;
WHEREAS, the obligation of Guaranteed Parties to purchase
the Notes under the Agreement is conditioned on, among other
things, the provision of a Contribution Agreement in the form
hereof;
WHEREAS, the Guarantors have entered into the Subsidiary
Guarantee Agreement dated as of even date herewith (the
"Guarantee Agreement"), pursuant to which such Guarantors have
agreed to guarantee all the obligations of Parent pursuant to the
Agreement and all other Guaranteed Obligations; and
WHEREAS, as a result of transactions contemplated by the
Agreement, Guarantors will benefit from the Guaranteed
Obligations and in consideration thereof desire to enter into
this Contribution Agreement to provide a fair and equitable
arrangement to make contributions in the event payments are made
under the Guarantee Agreement.
NOW, THEREFORE, in consideration of the foregoing premises
and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Parent and each
Guarantor hereby agree as follows:
SECTION 1. Contribution and Subrogation. Each Guarantor
agrees (subject to Section 2) that in the event a payment shall
be made by any Guarantor under the Guarantee Agreement or assets
of any Guarantor shall be sold to satisfy a claim of any
Guaranteed Party, and such Guarantor (the "Claiming Guarantor")
shall not have been indemnified by Parent, each other Guarantor
(a "Contributing Guarantor") shall indemnify the Claiming
Guarantor in an amount equal to the amount of such payment or the
greater of the book value or the fair market value of such
assets, as the case may be, multiplied by a fraction, the
numerator of which shall be the net worths of the Contributing
Guarantor on the date hereof, and the denominator of which shall
be the sum of the net worth of all the Guarantors on the date
hereof. Any Contributing Guarantor making any payment to a
Claiming Guarantor pursuant to this Section 1 shall be subrogated
to the rights of such Claiming Guarantor under this Section 1 to
the extent of such payment.
SECTION 2. Subordination. Notwithstanding any provision
of this Agreement to the contrary, (i) all rights of the
Guarantors under Section 1 and all other rights of indemnity or
contribution under applicable law or otherwise shall be fully
subordinated to the indefeasible payment in full in cash of the
Guaranteed Obligations, and (ii) no such rights shall be
exercised until all of the Guaranteed Obligations shall have been
irrevocably paid in full in cash and the Agreement shall have
been irrevocably terminated. If any amount shall be paid to any
Guarantor on account of such indemnity or contribution rights at
any time when all of the Guaranteed Obligations shall not have
been paid in full in cash, such amount shall be held in trust for
the benefit of the Guaranteed Parties and shall forthwith be paid
to the Guaranteed Parties to be credited and applied upon the
Guaranteed Obligations in accordance with the terms of the
Agreement. No failure on the part of any Guarantor to make the
payments required by Section 1 (or any other payments required
under applicable law or otherwise) shall in any respect limit the
obligations and liabilities of any Guarantor with respect to the
Guarantee Agreement, and each Guarantor shall remain liable for
the full amount of the obligations of such Guarantor under the
Guarantee Agreement.
SECTION 3. Allocation. If at any time there exists more
than one Claiming Guarantor with respect to the Guarantee
Agreement, then payment from other Guarantors pursuant to this
Contribution Agreement shall be allocated among such Claiming
Guarantors in proportion to the total amount of money paid for or
on account of the Guaranteed Obligations by each such Claiming
Guarantor pursuant to the Guarantee Agreement.
SECTION 4. Preservation of Rights. This Contribution
Agreement shall not limit or affect any right which any Guarantor
may have against any other Person that is not a party hereto.
SECTION 5. Subsidiary Payment. The amount of
contribution payable under this Contribution Agreement by any
Guarantor with respect to the Guarantee Agreement shall be
reduced by the amount of any contribution paid hereunder by a
Subsidiary of such Guarantor with respect to the Guarantee
Agreement.
SECTION 6. Asset Sale. If all of the stock of any
Guarantor shall be sold or otherwise disposed of (including by
merger or consolidation) in an asset sale not prohibited by the
Agreement or otherwise consented to by the Guaranteed Parties
under the Agreement, the agreements of such Guarantor hereunder
shall automatically be discharged and released without any
further action by such Guarantor and shall be assumed in full by
the corporation which prior to such asset sale or consent owned
the stock of such Guarantor, effective as of the time of such
asset sale or consent. Parent shall cause any such corporation
which is not a Guarantor to become a party to this Contribution
Agreement and the Guarantee Agreement unless otherwise agreed in
writing by the Guaranteed Parties.
SECTION 7. Equitable Allocation. If as a result of any
reorganization, recapitalization or other corporate change in
Parent or any of its Subsidiaries, or as a result of any
amendment, waiver or modification of the terms and conditions
governing the Guarantee Agreement or any of the Guaranteed
Obligations, or for any other reason, the contributions under
this Contribution Agreement become inequitable, the parties
hereto shall promptly modify and amend this Contribution
Agreement to provide for an equitable allocation of
contributions. All such modifications and amendments shall be in
writing and signed by all parties hereto.
SECTION 8. Asset of Party to Which Contribution and
Indemnification Are Owing. The parties hereto acknowledge that
the right to contribution and indemnification hereunder shall
each constitute an asset in favor of the party to which such
contribution or indemnification is owing.
SECTION 9. Successors and Assigns; Amendments. This
Contribution Agreement shall be binding upon each party hereto
and its respective successors and assigns and shall inure to the
benefit of the parties hereto and their respective successors and
assigns. None of any Guarantor's rights or any interest therein
under this Contribution Agreement may be assigned or transferred
without the written consent of the Guaranteed Parties. In the
event of any such transfer or assignment of rights by any
Guarantor, the rights and privileges herein conferred upon that
Guarantor shall automatically extend to and be vested in such
transferee or assignee, all subject to the terms and conditions
hereof. This Contribution Agreement shall not be amended without
the prior written consent of the Guarantors and the Guaranteed
Parties.
SECTION 10. Termination. This Contribution Agreement, as
it may be modified or amended from time to time, shall remain in
effect, and shall not be terminated as to the Guarantee
Agreement, until the Guarantee Agreement has been discharged or
otherwise satisfied in accordance with its terms.
SECTION 11. CHOICE OF LAW. THIS CONTRIBUTION AGREEMENT
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO THE CONFLICT OF LAWS PRINCIPLES THEREOF.
SECTION 12. Counterparts. This Contribution Agreement
and any amendments, waivers, consents or supplements may be
executed in any number of counterparts and by the different
parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such
counterparts shall constitute but one and the same instrument.
SECTION 13. Additional Guarantors. Upon execution and
delivery, after the date hereof, by a Subsidiary of Parent of an
instrument in the form of this Contribution Agreement, such
Subsidiary of Parent shall become a Guarantor hereunder with the
same force and effect as if originally named as a Guarantor
hereunder. The rights and obligations of each Guarantor
hereunder shall remain in full force and effect notwithstanding
the addition of any new Guarantor as a party to this Contribution
Agreement.
SECTION 14. Severability. In case any provision in or
obligation under this Contribution Agreement shall be invalid,
illegal or unenforceable in any jurisdiction, the validity,
legality or enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired
thereby.
SECTION 15. Addresses for Notices. All notices and other
communications provided for hereunder shall be in writing
(including telegraphic or telecopy communication) and mailed,
telegraphed, telecopied or delivered, if to any Guarantor,
addressed to it at the address set forth for such party in the
Guarantee Agreement, and if to any other party, at the address
set forth for such party in the Agreement. All such notices and
other communications shall be given and deemed to have been
received as provided by the terms of the Agreement.
SECTION 16. Defined Terms. All capitalized terms used
herein and not defined herein shall have their respective defined
meanings as set forth or used in the Guarantee Agreement.
[Signatures on Next Page]
IN WITNESS WHEREOF, Parent and the Guarantors have duly
executed this Contribution Agreement as of the day and year first
above written.
RYAN'S FAMILY STEAK HOUSES, INC.
By:
Title:
THE GUARANTORS:
[GUARANTOR]
By:
Title:
Address for Notices:
c/o Ryan's Family Steak Houses, Inc.
405 Lancaster Avenue
Greer, South Carolina 29650
Attn: Vice President, Finance/Chief
Financial Officer
EXHIBIT 4.12
[FORM OF AMENDED AND RESTATED INTERCREDITOR AGREEMENT]
EXHIBIT 4.13
[FORM OF AMENDED AND RESTATED PLEDGE AGREEMENT]
EXHIBIT 9.7
[FORM OF JOINDER AGREEMENT]
THIS JOINDER AGREEMENT (this "Agreement"), dated as of
___________, is entered into between _________________, a
________________ (the "New Subsidiary") and BANK OF AMERICA,
N.A., in its capacity as Collateral Agent (the "Collateral
Agent") under that certain Pledge Agreement dated as of January
28, 2000 (as amended, modified, extended, renewed or restated
from time to time, the "Pledge Agreement") among RYAN'S FAMILY
STEAK HOUSES, INC., a South Carolina Corporation (the "Company"),
the Domestic Subsidiaries of the Company (individually, a
"Pledgor" and together with the Company, the "Pledgors") and the
Collateral Agent. All capitalized terms used herein, unless
otherwise defined, shall have the meanings set forth in the
Pledge Agreement.
The New Subsidiary and the Collateral Agent, for the benefit
of the Purchasers, hereby agree as follows:
1. The New Subsidiary hereby (a) acknowledges, agrees and
confirms that, by its execution of this Agreement, the New
Subsidiary will be deemed a party to the Pledge Agreement as a
Pledgor, (b) acknowledges and agrees that its obligations under
the Note Purchase Agreement are secured in accordance with the
terms of the Pledge Agreement and the other Collateral Documents
and that the Purchasers may exercise their remedies thereunder in
accordance with the terms thereof and (c) pledges and grants to
the Collateral Agent, for the benefit of the Purchasers, a
security interest in the Pledged Capital Stock (as defined in the
Pledge Agreement) identified on Schedule A attached hereto and
all of the Pledged Collateral (as defined in the Pledge
Agreement). The New Subsidiary hereby represents and warrants to
the Administrative Agent and the Purchasers that (a) set forth on
Schedule B attached hereto are the chief executive offices and
principal place of business of the New Subsidiary, (b) set forth
on Schedule C attached hereto is a complete and accurate list of
all Subsidiaries of the New Subsidiary and (d) set forth on
Schedule D attached hereto are any tradenames of the New
Subsidiary. Each of Schedule 4.9 and Schedule 5.4 of the Note
Purchase Agreement and Schedule 2(a) of the Pledge Agreement are
hereby deemed amended to include the information on Schedule A
through Schedule D attached hereto, as applicable.
2. If required, the New Subsidiary is, simultaneously with the
execution of this Agreement, executing and delivering such
Collateral Documents (and such other documents and instruments)
as reasonably requested by the Collateral Agent in accordance
with Section 9.7 of the Note Purchase Agreement.
3. The address of the New Subsidiary for purposes of Section 18
of the Note Purchase Agreement is as follows:
____________________________
____________________________
____________________________
____________________________
4. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall
be an original, but all of which shall constitute one and the
same instrument.
5. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF SOUTH CAROLINA.
IN WITNESS WHEREOF, the New Subsidiary has caused this
Agreement to be duly executed by its authorized officer, as of
the day and year first above written.
[NEW SUBSIDIARY]
By:___________________________
_____
Name:_________________________
____
Title:________________________
______
Acknowledged and Accepted:
BANK OF AMERICA, N.A., as Collateral Agent
By:________________________________
Name:_____________________________
Title:______________________________
SCHEDULE A
PLEDGED CAPITAL STOCK
SCHEDULE B
LOCATION OF OFFICES
SCHEDULE C
SUBSIDIARIES
SCHEDULE D
TRADENAMES