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Exhibit 10.2
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AMENDED AND RESTATED CONVERTIBLE NOTE
$______________ May __, 1997
FOR VALUE RECEIVED, THE GROUND ROUND, INC., a Delaware
corporation, GR OF MINN., INC., a Delaware corporation and GROUND ROUND
RESTAURANTS INC., ("GRR"), a New York corporation (collectively, the
"Obligors"), DO HEREBY JOINTLY AND SEVERALLY PROMISE to pay to the order of
_________________, (the "Bank"), at the office of The Bank of New York (the
"Agent"), at One Wall Street, New York, New York 10286, the sum of
________________ ($__________) or the aggregate unpaid principal amount of the
Obligors' obligations hereunder, whichever is less, in lawful money of the
United States of America on the date set forth below, together with interest as
provided herein. The obligations of the Borrowers hereunder shall be joint and
several. Unless otherwise defined herein, all terms that are defined in the
Agreement (as hereinafter defined) shall have the same meaning herewith.
This Amended and Restated Convertible Note is one of the
Convertible Notes referred to in that certain Amended and Restated Credit
Agreement, dated as of September 12, 1996, as heretofore amended and as the same
may be amended, modified or supplemented from time to time (the "Agreement"),
among the Borrowers, the Agent and each of the financial institutions from time
to time party thereto (the "Lenders"), and is subject to the provisions
contained therein which, among other things, contains provisions for the
acceleration of the maturity hereof upon the happening of certain events, for
prepayment of the principal hereof prior to the maturity thereof and for the
amendment or waiver of certain provisions of the Agreement, all upon the terms
and conditions specified therein.
Subject to the right of the holder of this Amended and
Restated Convertible Note to convert amounts owing hereunder to common stock of
GRR, this Amended and Restated Convertible Note shall be due and payable as
follows: (i) if the holder has issued a demand for payment on or prior to May
25, 1997, on May 31, 1997 or (ii) if the holder has not issued a demand for
payment on or prior to May 25, 1997, on thirty days prior written demand for
payment provided the holder has not otherwise theretofore exercised its rights
of conversion; provided, that if any of the Lenders under the Agreement issues a
written demand for payment under any of the other Convertible Notes (x) the
Obligors shall promptly, and in no event later than three Business Days
following receipt of such demand, provide written notice of such demand to the
Bank and (y) this Amended and
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Restated Convertible Note shall (without the necessity of the giving of any
notice or the issuance of any demand) be due and payable on the date that
amounts owing under such other Convertible Notes which were the subject of a
demand are due and payable (the "Demand Date") unless the Bank advises the
Obligors in writing that amounts due under this Amended and Restated Convertible
Note are not due and payable on the Demand Date, in which case the demand and
notice provisions set forth in clauses (i) and (ii) of this sentence shall
remain in effect, provided, further, that if demand for payment has not been
issued by the holder on or prior to November 30, 1997 and the holder has not
otherwise theretofore exercised its rights of conversion, this Amended and
Restated Convertible Note shall be due and payable on December 31, 1997 without
the necessity of a demand for payment or the taking of any action by the holder,
the Agent or any of the Lenders. Any demand for payment or exercise of a
conversion right shall be irrevocable.
This Note is secured by certain Collateral referred to in the
Agreement, reference to which is hereby made for a description of the Collateral
provided thereby and the rights of the Borrowers, the Agent and the holder of
this Note in respect of such Collateral.
This Amended and Restated Convertible Note is not subject to
prepayment by, or on behalf of, the Obligors. This Amended and Restated
Convertible Note shall not, prior to May 31, 1997, accrue interest. From and
after May 31, 1997, interest shall accrue on such unpaid principal amount at the
rate set forth in Section 2.06(c) of the Agreement and shall be payable as
provided therein.
The holder of this Amended and Restated Convertible Note shall
have the right, at its option, at any time during the period from and after May
1, 1997 through and including 5:00 p.m. N.Y.C. time on the Termination Date (as
the same may be extended pursuant to the terms of the Agreement), to convert,
subject to the terms and provisions hereof, not in excess of $________ [face
amount of note] of principal of this Amended and Restated Convertible Note into
non-registered and so legended shares of common stock of GRR at a conversion
price equal to $2.70833 (the "Conversion Price") of principal hereunder for each
share of common stock upon surrender of this Amended and Restated Convertible
Note to GRR at the address set forth in Section 8.02 of the Agreement, together
with a written notice of election executed by the holder hereof to convert this
Amended and Restated Convertible Note, specifying the name or names in which the
shares of common stock shall be registered, with the addresses of the persons so
named. As promptly as practicable after the surrender of this Amended and
Restated Convertible Note for conversion as set forth herein, GRR shall deliver,
or cause
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to be delivered, certificates representing the number of shares of fully paid
and non-assessable common stock into which this Amended and Restated Convertible
Note may be converted in accordance with the provisions hereof, registered in
the names as may be specified in such conversion notice. Such conversion shall
be deemed to have been made at the close of business on the date that such
Amended and Restated Convertible Note shall have been surrendered to GRR. Each
holder entitled to receive the shares of common stock upon conversion of such
Amended and Restated Convertible Note shall be treated for all purposes as
having become the record holder or holders of such shares of common stock at
such time. If the last day for the exercise of the conversion right shall be a
Sunday or shall be, in the city in which is then located GRR's principal place
of business, a legal holiday or a day on which banking institutions in such city
are authorized by law to close, then such conversion rights may be exercised on
the next succeeding business day.
The Conversion Price shall be subject to adjustment as
follows:
(a) In case GRR shall (i) pay a dividend in shares of
its capital stock, (ii) subdivide its outstanding shares of common
stock, (iii) combine its outstanding shares of common stock into a
smaller number of shares, or (iv) issue by reclassification of its
shares of common stock any shares of GRR, the conversion price in
effect immediately prior thereto shall be adjusted so that the holder
of this Amended and Restated Convertible Note if thereafter surrendered
for conversion shall be entitled to receive the number of shares of
common stock of GRR which it would have owned or have been entitled to
receive after the happening of any of the events described above, had
such Amended and Restated Convertible Note been converted immediately
prior to the happening of such event. Such adjustment shall be made
whenever any of the events listed above shall occur. An adjustment made
pursuant to this paragraph shall become effective retroactively
immediately after the record date in the case of a dividend and shall
become effective immediately after the effective date in the case of a
subdivision, combination or reclassification.
(b) In case GRR shall issue rights or warrants to
holders of its common stock entitling them (for a period expiring
within 15 days after the record date mentioned below) to subscribe for
or purchase shares of common stock at a price per share less than the
closing price (as defined below) per share of common stock at the
record date mentioned below, the price per share at which this Amended
and Restated Convertible Note may thereafter be converted into common
stock shall be determined by dividing the price
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per share for which this Amended and Restated Convertible Note were theretofore
convertible into common stock by a fraction of which the numerator shall be the
number of shares of common stock outstanding on the date of issuance of such
rights or warrants plus the number of additional shares of common stock offered
for subscription or purchase, and of which the denominator shall be the number
of shares of common stock outstanding on the date of issuance of such rights or
warrants plus the number of shares which the aggregate offering price of the
total number of shares so offered would purchase at such current market price.
Such adjustment shall be made whenever such rights or warrants are issued, and
shall become effective retroactively immediately after the record date for the
determination of stockholders entitled to receive such rights or warrants.
(c) For the purpose of any computation under
subparagraph (b) above, the "closing price" for any business day shall
mean: (i) if the shares shall not be listed or admitted to trading on
any national securities exchange, the closing price, if reported, or,
if the closing price is not reported, the average of the closing bid
and asked prices, as reported by the National Association of Securities
Dealers Automated Quotation System (NASDAQ or a similar source selected
from time to time by GRR for such purpose, or (ii) if the shares are
listed or admitted to trading on the New York Stock Exchange, the
closing price on the NYSE - Consolidated Tape (or any successor
composite tape reporting transactions on the New York Exchange) or, if
such a composite tape shall not be in use or shall not report
transactions in the shares, or if the shares shall be listed on a stock
exchange other than the New York Stock Exchange, the last reported
sales price on the principal national securities exchange on which the
greatest number of the shares has been traded during the thirty (30)
consecutive business days preceding such business day, or, in either
case, if there is no transaction on any business day, the average of
the bid and asked prices on such day.
(d) No adjustment in the conversion price shall be
required unless such adjustment would require an increase or decrease
of at least $.10 in such price. All calculations under this paragraph
shall be made to the nearest cent or to the nearest one-hundredth of a
share, as the case may be.
After giving effect to any conversion hereunder, the remaining
principal balance of this Amended and Restated Convertible Note, together with
all accrued interest, shall be payable upon 30 days prior written demand to the
Obligors; provided, that if demand shall not have been made on or prior to
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November 30, 1997, such amounts shall be payable on December 31, 1997.
No fractional shares shall be issued upon the conversion of
this Amended and Restated Convertible Note. If any fractional interest in a
share of common stock would, except for the provisions of this paragraph, be
deliverable upon the conversion of this Amended and Restated Convertible Note,
GRR shall, in lieu of delivering a fractional share therefor, adjust such
fractional interest as follows: if GRR would otherwise be obligated to issue
less than one-half of a share, GRR shall reduce the number of shares to be
issued to the nearest whole number of shares (e.g. 100 4/9 shares shall be
reduced to 100 shares) and if GRR would otherwise be obligated to issue one-half
or more of a share, GRR shall increase the number of shares to be issued to the
nearest whole number of shares (e.g., 100 1/2 shares shall be increased to 101
shares).
Any share of GRR common stock issued to the holder of this
Amended and Restated Convertible Note shall be governed by the terms of that
certain Registration Rights Agreement among GRR and the Lenders of even date
herewith.
This Amended and Restated Convertible Note shall be governed
by, and construed in accordance with, the laws of the State of New York, without
regard to conflicts of law principles.
THE GROUND ROUND, INC.
By:_______________________
Title:
GR OF MINN., INC.
By:_______________________
Title:
GROUND ROUND RESTAURANTS, INC.
By:________________________
Title:
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