<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended April 12, 1998 Commission File No. 1-9390
-------------- ------
FOODMAKER, INC.
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 95-2698708
- -------------------------------------------------------------------------------
(State of Incorporation) (I.R.S. Employer
Identification No.)
9330 BALBOA AVENUE, SAN DIEGO, CA 92123
- -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (619) 571-2121
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that
the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days.
Yes X No
--- ---
Number of shares of common stock, $.01 par value, outstanding as of the
close of business May 15, 1998 - 39,310,195
-1-
<PAGE>
FOODMAKER, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED BALANCE SHEETS
(In thousands)
April 12, September 28,
1998 1997
----------- -------------
ASSETS
Current assets:
Cash and cash equivalents . . . . . . . . . . . $ 81,590 $ 28,527
Receivables . . . . . . . . . . . . . . . . . . 13,801 10,482
Inventories . . . . . . . . . . . . . . . . . . 18,974 18,300
Prepaid expenses. . . . . . . . . . . . . . . . 42,830 42,853
--------- ---------
Total current assets . . . . . . . . . . . . $ 157,195 $ 100,162
--------- ---------
Property at cost. . . . . . . . . . . . . . . . . 683,293 660,076
Accumulated depreciation and amortization . . . (216,286) (201,289)
--------- ---------
467,007 458,787
--------- ---------
Trading area rights . . . . . . . . . . . . . . . 73,092 69,921
--------- ---------
Lease acquisition costs . . . . . . . . . . . . . 17,621 18,788
--------- ---------
Other assets. . . . . . . . . . . . . . . . . . . 35,556 34,100
--------- ---------
TOTAL. . . . . . . . . . . . . . . . . . . . $ 750,471 $ 681,758
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt. . . . . . $ 1,547 $ 1,470
Accounts payable. . . . . . . . . . . . . . . . 33,261 39,575
Accrued expenses. . . . . . . . . . . . . . . . 147,504 134,960
Income tax liabilities. . . . . . . . . . . . . 26,298 17,208
--------- ---------
Total current liabilities. . . . . . . . . . 208,610 193,213
--------- ---------
Long-term debt, net of current maturities . . . . 346,524 346,191
--------- ---------
Other long-term liabilities . . . . . . . . . . . 56,488 54,093
--------- ---------
Deferred income taxes . . . . . . . . . . . . . . 3,782 382
--------- ---------
Stockholders' equity:
Common stock. . . . . . . . . . . . . . . . . . 407 405
Capital in excess of par value. . . . . . . . . 284,682 283,517
Accumulated deficit . . . . . . . . . . . . . . (135,559) (181,580)
Treasury stock. . . . . . . . . . . . . . . . . (14,463) (14,463)
--------- ---------
Total stockholders' equity . . . . . . . . . 135,067 87,879
--------- ---------
TOTAL. . . . . . . . . . . . . . . . . . . . $ 750,471 $ 681,758
========= =========
See accompanying notes to financial statements.
-2-
<PAGE>
FOODMAKER, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Twelve Weeks Ended Twenty-eight Weeks Ended
---------------------- ------------------------
April 12, April 13, April 12, April 13,
1998 1997 1998 1997
--------- --------- --------- ---------
Revenues:
Restaurant sales. . . . . . $ 249,505 $ 223,820 $ 574,838 $ 515,032
Distribution sales. . . . . 5,546 14,285 12,319 34,860
Franchise rents and royalties 8,029 8,035 18,963 18,705
Other . . . . . . . . . . . 46,829 853 47,563 1,879
--------- --------- --------- ---------
309,909 246,993 653,683 570,476
--------- --------- --------- ---------
Costs and expenses:
Costs of revenues:
Restaurant costs of sales 80,592 74,596 187,265 172,793
Restaurant operating costs 132,431 115,415 302,393 265,744
Costs of distribution sales 5,368 14,299 11,940 34,650
Franchised restaurant costs 5,480 5,540 12,455 12,019
Selling, general and
administrative . . . . . . 27,431 19,136 52,803 43,030
Interest expense. . . . . . 8,160 9,412 19,206 22,018
--------- --------- --------- ---------
259,462 238,398 586,062 550,254
--------- --------- --------- ---------
Earnings before income taxes 50,447 8,595 67,621 20,222
Income taxes. . . . . . . . . 16,100 1,900 21,600 4,500
--------- --------- --------- ---------
Net earnings. . . . . . . . . $ 34,347 $ 6,695 $ 46,021 $ 15,722
========= ========= ========= =========
Net earnings per share:
Basic . . . . . . . . . . . $ .88 $ .17 $ 1.17 $ .40
Diluted . . . . . . . . . . $ .85 $ .17 $ 1.14 $ .40
Weighted average shares
outstanding:
Basic . . . . . . . . . . . 39,226 38,877 39,178 38,859
Diluted . . . . . . . . . . 40,327 39,580 40,252 39,531
See accompanying notes to financial statements.
-3-
<PAGE>
FOODMAKER, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Twenty-eight Weeks Ended
------------------------
April 12, April 13,
1998 1997
--------- ---------
Cash flows from operations:
Net earnings. . . . . . . . . . . . . . . . . . . $46,021 $15,722
Non-cash items included above:
Depreciation and amortization. . . . . . . . . 22,686 21,274
Deferred income taxes. . . . . . . . . . . . . 3,400 (2,000)
Increase in receivables . . . . . . . . . . . . . (3,319) (427)
Decrease (increase) in inventories. . . . . . . . (674) 99
Increase in prepaid expenses. . . . . . . . . . . (850) (6,556)
Increase (decrease) in accounts payable . . . . . (6,314) 5,772
Increase in other accrued liabilities . . . . . . 24,222 10,990
------- -------
Cash flows provided by operations. . . . . . . 85,172 44,874
------- -------
Cash flows from investing activities:
Additions to property and equipment . . . . . . . (28,953) (15,629)
Dispositions of property and equipment. . . . . . 3,397 1,442
Increase in trading area rights . . . . . . . . . (5,114) (1,510)
Increase in other assets. . . . . . . . . . . . . (2,813) (868)
------- -------
Cash flows used in investing activities. . . . (33,483) (16,565)
------- -------
Cash flows from financing activities:
Proceeds from issuance of long-term debt. . . . . 1,000 -
Principal payments on long-term debt,
including current maturities . . . . . . . . . (793) (1,174)
Proceeds from issuance of common stock. . . . . . 1,167 372
------- -------
Cash flows provided by (used in)
financing activities . . . . . . . . . . . . 1,374 (802)
------- -------
Net increase in cash and cash equivalents . . . . . $53,063 $27,507
======= =======
See accompanying notes to financial statements.
-4-
<PAGE>
FOODMAKER, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
1. The accompanying unaudited financial statements of Foodmaker, Inc. (the
"Company") do not include all of the information and footnotes required by
generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments, consisting only of normal
recurring adjustments, considered necessary for a fair presentation of
financial condition and results of operations for the interim periods have
been included. Operating results for any interim period are not necessarily
indicative of the results for any other interim period or for the full year.
The Company reports results quarterly with the first quarter having 16 weeks
and each remaining quarter having 12 weeks. Certain financial statement
reclassifications have been made in the prior year to conform to the current
year presentation. These financial statements should be read in conjunction
with the 1997 financial statements.
2. In 1998, the Company adopted Statement of Financial Accounting Standards
No. 128 ("SFAS 128"), Earnings per Share. SFAS 128 requires the
presentation of basic earnings per share, computed using the weighted
average number of shares outstanding during the period, and diluted earnings
per share, computed using the additional dilutive effect of all common stock
equivalents. The dilutive impact of stock options and warrants account for
the additional weighted average shares of common stock outstanding for the
Company's diluted earnings per share computation. All prior periods have
been restated to conform with the provisions of SFAS 128.
3. The income tax provisions reflect the expected annual tax rate of 32% of
pretax earnings in 1998 and the actual tax rate of 22% in 1997. The low
effective income tax rates in each year result from the Company's ability to
realize previously unrecognized tax benefits. The Company cannot determine
the actual 1998 annual effective tax rate until the end of the fiscal year,
thus the rate could differ from expectations.
4. Legal Proceedings
During the quarter, the Company settled the litigation it filed against the
Vons Companies, Inc. ("Vons") and various suppliers seeking reimbursement
for all damages, costs and expenses incurred in connection with food-borne
illness attributed to hamburgers served at Jack in the Box restaurants in
1993. The initial litigation was filed by the Company on February 4, 1993.
Vons filed cross-complaints against the Company and others alleging certain
contractual, indemnification and tort liabilities; seeking damages in
unspecified amounts and a declaration of the rights and obligations of the
parties. The claims of the parties were settled on February 24, 1998.
Foodmaker received in its second quarter approximately $58.5 million in the
settlement, of which a net of approximately $45.8 million was realized after
litigation costs and before income taxes (the "Litigation Settlement").
On February 2, 1995, an action by Concetta Jorgensen was filed against the
Company in the U.S. District Court in San Francisco, California alleging
that restrooms at a Jack in the Box restaurant failed to comply with laws
regarding disabled persons and seeking damages in unspecified amounts,
punitive damages, injunctive relief, attorneys fees and prejudgment
-5-
<PAGE>
interest. In an amended complaint, damages were also sought on behalf of all
physically disabled persons who were allegedly denied access to restrooms at
the restaurant. In February 1997, the court ordered that the action for
injunctive relief proceed as a nationwide class action on behalf of all
persons in the United States with mobility disabilities. The Company has
reached agreement on settlement terms both as to the individual plaintiff
Concetta Jorgensen and the claims for injunctive relief, and the settlement
agreement has been approved by the U.S. District Court. The settlement
requires the Company to make access improvements at Company-operated
restaurants to comply with the standards set forth in the Americans with
Disabilities Act Access Guidelines. The settlement requires compliance at
85% of the Company-operated restaurants by April 2001 and for the balance of
Company-operated restaurants by October 2005. The Company has agreed to make
modifications to its restaurants to improve accessibility and anticipates
investing an estimated $11 million in capital improvements over the next
seven years. Foodmaker has been notified by attorneys for plaintiffs that
claims may be made against Jack in the Box franchisees and Foodmaker
relating to locations that franchisees lease from Foodmaker which may not be
in compliance with the Americans with Disabilities Act.
On April 6, 1996 an action was filed by one of the Company's international
franchisees, Wolsey, Ltd., in the United States District Court in San Diego,
California against the Company and its directors, its international
franchising subsidiary, and certain officers of the Company and others. The
complaint alleges certain contractual, tort and law violations related to
the franchisees' development rights in the Far East and seeks damages in
excess of $38.5 million, injunctive relief, attorneys fees and costs. The
Company has successfully dismissed portions of the complaint, including the
single claim alleging wrongdoing by the Company's outside directors, and the
claims against its current officers. Management believes the remaining
allegations are without foundation and intends to vigorously defend the
action.
On November 5, 1996 an action was filed by the National JIB Franchisee
Association, Inc. and several of the Company's franchisees in the Superior
Court of California, County of San Diego in San Diego, California, against
the Company and others. The lawsuit alleges that certain Company policies
are unfair business practices and violate sections of the California
Corporations Code regarding material modifications of franchise agreements
and interfere with franchisees' right of association. It seeks injunctive
relief, a declaration of the rights and duties of the parties, unspecified
damages and recision of alleged material modifications of plaintiffs'
franchise agreements. The complaint also alleges fraud, breach of a
fiduciary duty and breach of a third party beneficiary contract in
connection with certain payments that the Company received from suppliers
and seeks unspecified damages, interest, punitive damages and an accounting.
Management believes that its policies are lawful and that it has satisfied
any obligation to its franchisees in regard to such supplier payments.
On December 10, 1996, a suit was filed by the Company's Mexican licensee,
Foodmex, Inc., in the United States District Court in San Diego, California
against the Company and its international franchising subsidiary. Foodmex
formerly operated several Jack in the Box franchise restaurants in Mexico,
but its licenses were terminated by the Company for, among other reasons,
chronic insolvency and failure to meet operational standards. The Foodmex
suit alleges wrongful termination of its master license, breach of contract
and unfair competition and seeks an injunction to prohibit termination of
its license as well as unspecified monetary damages. The Company and its
subsidiary counterclaimed and sought a preliminary injunction against
Foodmex. On March 28, 1997 the court granted the Company's request for an
-6-
<PAGE>
injunction, held that the Company was likely to prevail in its suit, and
ordered Foodmex to immediately cease using the Jack in the Box marks and
proprietary operating systems. On June 30, 1997, the court held Foodmex and
its president in contempt of court for failing to comply with the March 28,
1997 order. On February 24, 1998, the Court issued an order dismissing
Foodmex's complaint without prejudice. In March 1998, Foodmex filed a Second
Amended Complaint in the United States District Court in San Diego,
California alleging contractual, tort and law violations arising out of the
same business relationship and seeking damages in excess of $10 million,
attorneys fees and costs. The Company believes such allegations are without
merit and will defend the action vigorously.
On May 23, 1997, an action by Ralston Purina Company was filed against the
Company in the U.S. District Court for the Eastern District of Missouri in
St. Louis, Missouri alleging the Company's breach of a tax sharing agreement
and unjust enrichment and seeking an accounting and damages in an amount
not less than $11 million plus interest and attorneys' fees and costs. The
Company believes it has meritorious defenses and intends to vigorously
defend the lawsuit.
The Company is also subject to normal and routine litigation. The amount of
liability from the claims and actions described above cannot be determined
with certainty, but in the opinion of management, the ultimate liability
from all pending legal proceedings, asserted legal claims and known
potential legal claims which are probable of assertion should not materially
affect the results of operations and liquidity of the Company.
-7-
<PAGE>
FOODMAKER, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL INFORMATION
RESULTS OF OPERATIONS
All comparisons under this heading between 1998 and 1997 refer to the
12-week and 28-week periods ended April 12, 1998 and April 13, 1997,
respectively, unless otherwise indicated.
Restaurant sales increased $25.7 million and $59.8 million, respectively, to
$249.5 million and $574.8 million in 1998 from $223.8 million and $515.0 million
in 1997, as both the number of Company-operated restaurants and per store
average sales increased from a year ago. The average number of Company-operated
restaurants for the 28-week period increased to 975 in 1998 from 886 in 1997,
through the addition of new units and the acquisition of restaurants from
franchisees. Per store average ("PSA") sales for comparable restaurants, which
are calculated for only those restaurants open for all periods being compared,
increased 2.0% and 2.4%, respectively, in 1998 compared to the same periods in
1997. PSA sales improved due to increases in both the number of transactions
and the average transaction amounts. Restaurant sales improvements are
attributed to the Company's two-tier marketing strategy featuring both premium
sandwiches and value-priced alternatives, as well as to a popular brand-building
advertising campaign that features the Company's fictional founder, "Jack".
Distribution sales of food and supplies declined $8.8 million and $22.6
million, respectively, to $5.5 million and $12.3 million in 1998 from $14.3
million and $34.9 million in 1997. A distribution contract with Chi-Chi's, Inc.
("Chi-Chi's") was not renewed when it expired in May 1997; sales to Chi-Chi's
restaurants were $12.5 million and $30.1 million, respectively, in 1997. Because
distribution is a low-margin business, the loss of distribution revenues did not
have a material impact on the results of operations or financial condition of
the Company. Distribution sales to franchisees and others increased $3.7
million and $7.5 million, respectively, to $5.5 million and $12.3 million in
1998 from $1.8 million and $4.8 million in 1997.
Franchise rents and royalties were consistent with a year ago at $8.0
million in the 12-week period. There was a slight increase in the 28-week
period to $19.0 million in 1998 from $18.7 million in 1997. The Company
receives rents and royalties averaging approximately 10% of sales at franchise-
operated restaurants.
In 1998, other revenues, typically interest income from investments and
notes receivable, also include the net Litigation Settlement of $45.8 million as
described in Note 4. Excluding this unusual item, other revenues in 1998 were
$1.0 million in the 12-week period and $1.8 million in the 28-week period and
varied only slightly from the $.9 million and $1.9 million in the comparable
1997 periods.
Restaurant costs of sales, which include food and packaging costs, increased
with restaurant sales growth and the addition of Company-operated restaurants to
$80.6 million and $187.3 million, respectively, in 1998 from $74.6 million and
$172.8 million in 1997. As a percent of restaurant sales, restaurant costs of
sales declined to 32.3% and 32.6%, respectively, in 1998 from 33.3% and 33.5% in
1997 primarily due to favorable ingredient costs, principally beef, pork and
cheese, offset partially by increased produce costs.
-8-
<PAGE>
Restaurant operating costs increased principally with restaurant sales
growth and the addition of Company-operated restaurants to $132.4 million and
$302.4 million, respectively, in 1998 from $115.4 million and $265.7 million in
1997. As a percent of restaurant sales, such costs increased to 53.1% and
52.6%, respectively, in 1998 from 51.6% in both periods in 1997 primarily
reflecting higher labor costs due to increases in the minimum wage and other
operations administrative costs.
Costs of distribution sales decreased to $5.4 million and $11.9 million,
respectively, in 1998 from $14.3 million and $34.7 million in 1997 reflecting
the decline in distribution sales. Costs of distribution sales for the 28-week
period decreased as a percent of sales to 96.9% in 1998 from 99.4% in 1997,
primarily due to the loss of the lower margin Chi-Chi's distribution business.
In 1997 costs of distribution sales include $.4 million in expenses related to
the closure of a distribution center which had been used primarily to distribute
to Chi-Chi's.
Franchised restaurant costs, which include rents and depreciation on
properties leased to franchisees and other miscellaneous costs, were flat year
to year at $5.5 million in the 12-week periods in 1998 and 1997. Costs
increased slightly in the 28-week period to $12.5 million in 1998 from $12.0
million in 1997 reflecting higher international franchise-related legal expense.
Selling, general and administrative expenses increased $8.3 million and $9.8
million, respectively, to $27.4 million and $52.8 million in 1998 from $19.1
million and $43.0 million in 1997. The increases were primarily caused by a
non-cash charge of approximately $8 million principally resulting from the
write-down of underperforming restaurants and asset write-offs associated with
customer service enhancements. Advertising and local promotion costs, which
were maintained at 5.3% and 5.4% in the 1998 and 1997 periods, respectively,
increased with the higher restaurant sales. The Company received from suppliers
cooperative advertising funds of approximately .5% of restaurant sales in each
period. General, administrative and other expenses, excluding the write-offs,
declined to 2.7% and 2.8% of revenues, excluding the Litigation Settlement, in
1998 from 3.3% and 3.1%, respectively, in 1997 primarily due to a decrease in
legal costs and the increase in revenues.
Interest expense declined $1.2 million and $2.8 million, respectively, to
$8.2 million and $19.2 million in 1998 from $9.4 million and $22.0 million in
1997, principally due to a reduction in total debt outstanding. In September
1997, the Company repaid $50 million of its 9-1/4% senior notes due 1999.
The 1998 tax provision reflects the expected annual tax rate of 32% of
earnings before income taxes. The income tax provision for 1997 was 22% of
pretax earnings. The low effective income tax rates in each year result from
the Company's ability to realize previously unrecognized tax benefits. The
Company cannot determine the actual 1998 annual effective tax rate until the end
of the fiscal year, thus the rate could differ from expectations.
Net earnings in the 12-week period increased $27.6 million or $.68 per share
on a diluted basis, to $34.3 million, or $.85 per share, from $6.7 million, or
$.17 per share. Net earnings in the 28-week period improved $30.3 million to
$46.0 million, or $1.14 million per share, in 1998 from $15.7 million, or $.40
per share, in 1997. These increases include approximately $25.6 million, after
income taxes, of unusual net earnings resulting from the Litigation Settlement
offset by the aforementioned write-offs. Excluding these unusual items,
earnings in 1998 were $8.7 million, or $.22 per share on a diluted basis, and
$20.4 million, or $.51 per share, respectively. The increases in these earnings
compared to similar periods in 1997 reflect the impact of sales growth and lower
interest expense, offset by the higher effective tax rate in 1998.
-9-
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents increased $53.1 million to $81.6 million at
April 12, 1998 from $28.5 million at the beginning of the fiscal year. The cash
increase reflects, among other things, cash flows from operations of $85.2
million including the $45.8 million net Litigation Settlement received in 1998
less capital expenditures and other investing activities of $33.5 million. A
significant portion of this cash will be used to reduce long-term debt in the
refinancing plan described hereafter.
The Company's working capital deficit decreased $41.7 million to $51.4
million at April 12, 1998 from $93.1 million at September 28, 1997, primarily
due to the increase in cash and cash equivalents which was partially offset by
an increase in current liabilities. The Company and the restaurant industry in
general maintain relatively low levels of receivables and inventories and
vendors grant trade credit for purchases such as food and supplies. The Company
also continually invests in its business through the addition of new units and
refurbishment of existing units, which are reflected as long-term assets and not
as part of working capital.
On April 1, 1998, the Company entered into a new revolving bank credit
agreement, which provides for a credit facility expiring in 2003 of up to $175
million, including letters of credit of up to $25 million. At April 12, 1998,
the Company had no borrowings and approximately $168.5 million of unused credit
under the agreement.
Total debt outstanding increased slightly to $348.1 million at April 12,
1998 from $347.7 million at the beginning of the fiscal year and declined from
$397.2 million at this time last year.
Beginning in September 1997, the Company initiated a refinancing plan to
reduce and restructure its debt. In September 1997, the Company prepaid $50
million of the 9-1/4% senior notes due 1999 using available cash. By early June
1998, the Company expects it will have redeemed at various dates the remaining
$125 million of 9-1/4% senior notes and all $125 million of its 9-3/4% senior
subordinated notes due 2002.
In order to fund these repayments, the Company completed on April 14, 1998,
a private offering of $125 million of 8-3/8% senior subordinated notes due 2008,
redeemable beginning 2003. Additional funding sources include available cash,
as well as bank borrowings under the new bank credit facility, as necessary.
Upon completion of the refinancing plan, the Company will incur an extraordinary
pretax charge of approximately $7 million relating to the debt prepaid in the
plan. However, annual interest expense will be reduced by over $10 million from
1997 levels due principally to the $50 million debt repayment in September 1997
coupled with the expected additional net reduction in debt subsequent to
April 12, 1998 of approximately $45 million and the lower interest rates on the
new debt.
The Company is subject to a number of covenants under its various debt
instruments including limitations on additional borrowings, capital
expenditures, lease commitments and dividend payments, and requirements to
maintain certain financial ratios, cash flows and net worth. The bank credit
facility is secured by a first priority security interest in certain assets and
properties of the Company. In addition, certain of the Company's real estate
and equipment secure other indebtedness.
-10-
<PAGE>
The Company requires capital principally to grow the business through new
restaurant construction, as well as to maintain, improve and refurbish existing
restaurants, and for general operating purposes. The Company's primary sources
of liquidity are expected to be cash flows from operations, the revolving bank
credit facility, and the sale and leaseback of restaurant properties. An
additional potential source of liquidity is the conversion of Company-operated
restaurants to franchised restaurants. The Company requires capital principally
to grow the business through new restaurant construction, as well as to
maintain, improve and refurbish existing restaurants, and for general operating
purposes.
Based upon current levels of operations and anticipated growth, the Company
expects that sufficient cash flows will be generated from operations so that,
combined with other financing alternatives available, including utilization of
cash on hand, bank credit facilities, the sale and leaseback of restaurants and
refinancing opportunities, the Company will be able to meet all of its debt
service, capital expenditure and working capital requirements.
YEAR 2000 COMPLIANCE
The Company has performed an assessment of its major information technology
systems and expects that all necessary modifications and/or replacements will be
completed prior to December 1999. Based on current expenditures and estimates,
the costs of addressing this issue are not expected to have a material adverse
effect on the Company's financial position, results of operations or liquidity.
The potential impact of the Year 2000 issue in regards to significant vendors
and suppliers cannot be reasonably estimated at this time. However, the Company
could be adversely impacted if its suppliers and franchisees do not ensure Year
2000 compliance in their own systems in a timely manner.
CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements
including, but not limited to, the Company's expectations regarding its
effective tax rate, its continuing investment in new restaurants and
refurbishment of existing facilities and sources of liquidity. The words
"anticipates," "believes," "estimates," "seeks," "expects," "plans," "intends"
and similar expressions, as they relate to the Company or its management, are
intended to identify forward-looking statements. Such statements reflect the
current views of the Company, with respect to future events and are subject to
certain risks, uncertainties and assumptions, including the following risk
factors. The Company's tax provision is highly sensitive to expected earnings.
As earnings expectations change, the Company's income tax provision may vary
more significantly from quarter to quarter and year to year than companies which
have been continuously profitable. However, the Company's effective tax rates
are expected to increase in the future. There can be no assurances that growth
objectives in the regional domestic markets in which the Company operates will
be met or that capital will be available for refurbishment of existing
facilities. In addition, among the other factors that could cause the Company's
results to differ materially are: the effectiveness and cost of advertising and
promotional efforts; the degree of success of the Company's product offerings;
weather conditions; difficulties in obtaining ingredients and variations in
ingredient costs; the Company's ability to control operating, general and
administrative costs and to raise prices sufficiently to offset cost increases;
competitive products and pricing and promotions; the impact of any wide-spread
negative publicity; the impact on consumer eating habits of new scientific
information regarding diet, nutrition and health; competition for labor; general
economic conditions; changes in consumer tastes and in travel and dining-out
habits; the impact on operations and the costs to comply with laws and
-11-
<PAGE>
regulations and other activities of governing entities; the costs and other
effects of legal claims by franchisees, customers, vendors and others, including
settlement of those claims; the impact of a failure to achieve Year 2000
compliance on the part of the Company, its suppliers or its franchisees; and the
effectiveness of management strategies and decisions. Additional risk factors
associated with the Company's business are detailed in the Company's most recent
Annual Report on Form 10-K filed with the Securities and Exchange Commission.
-12-
<PAGE>
PART II - OTHER INFORMATION
There is no information required to be reported for any items under Part II,
except as follows:
Item 1. Legal Proceedings - See Note 4 to the Unaudited Consolidated
Financial Statements.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
Number Description
4.1 Indenture for the 8-3/8% Senior Subordinated Notes
due 2008.
10.1 Revolving Credit Agreement dated as of April 1, 1998
by and between Foodmaker, Inc. and the Banks and Agents
named therein.
27 Financial Data Schedule (included only with electronic
filing)
(b) Reports on Form 8-K
A Form 8-K was filed on February 24, 1998, reporting under Item 5
thereof, the settlement of certain legal claims.
A Form 8-K was filed on February 25, 1998, reporting under Item 5
thereof, a non-cash charge to earnings relating to write-offs of
certain assets.
-13-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized and in the capacities indicated.
FOODMAKER, INC.
By: DARWIN J. WEEKS
---------------
Darwin J. Weeks
Vice President, Controller
and Chief Accounting Officer
(Duly Authorized Signatory)
Date: May 21, 1998
-14-
<PAGE>
Foodmaker, Inc.
as Issuer
and
The Subsidiary Guarantors
Named Herein
8 3/8% Senior Subordinated Notes
due April 15, 2008
_____________
INDENTURE
Dated as of April 14, 1998
_____________
First Union National Bank
Trustee
<PAGE> TABLE OF CONTENTS
Page
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01 Definitions . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.02 Other Definitions . . . . . . . . . . . . . . . . . . . 18
Section 1.03 Incorporation by Reference of Trust Indenture Act . . . 19
Section 1.04 Rules of Construction . . . . . . . . . . . . . . . . . 19
ARTICLE 2
THE NOTES
Section 2.01 Form and Dating . . . . . . . . . . . . . . . . . . . . 20
Section 2.02 Execution and Authentication . . . . . . . . . . . . . 20
Section 2.03 Registrar and Paying Agent . . . . . . . . . . . . . . 21
Section 2.04 Paying Agent to Hold Money in Trust . . . . . . . . . . 21
Section 2.05 Holder Lists . . . . . . . . . . . . . . . . . . . . . 21
Section 2.06 Transfer and Exchange . . . . . . . . . . . . . . . . . 22
Section 2.07 Replacement Notes . . . . . . . . . . . . . . . . . . . 32
Section 2.08 Outstanding Notes . . . . . . . . . . . . . . . . . . . 33
Section 2.09 Treasury Notes . . . . . . . . . . . . . . . . . . . . 33
Section 2.10 Temporary Notes . . . . . . . . . . . . . . . . . . . . 33
Section 2.11 Cancellation . . . . . . . . . . . . . . . . . . . . . 33
Section 2.12 Defaulted Interest . . . . . . . . . . . . . . . . . . 34
ARTICLE 3
REDEMPTION
Section 3.01 Notices to Trustee . . . . . . . . . . . . . . . . . . 34
Section 3.02 Selection of Notes to Be Redeemed . . . . . . . . . . . 34
Section 3.03 Notice of Redemption . . . . . . . . . . . . . . . . . 35
Section 3.04 Effect of Notice of Redemption . . . . . . . . . . . . 35
Section 3.05 Deposit of Redemption Price . . . . . . . . . . . . . . 35
Section 3.06 Notes Redeemed in Part . . . . . . . . . . . . . . . . 36
Section 3.07 Optional Redemption . . . . . . . . . . . . . . . . . . 36
Section 3.08 No Mandatory Redemption . . . . . . . . . . . . . . . . 37
<PAGE>
ARTICLE 4
COVENANTS
Section 4.01 Payment of Notes . . . . . . . . . . . . . . . . . . . 37
Section 4.02 Maintenance of Office or Agency . . . . . . . . . . . . 37
Section 4.03 Commission Reports and Reports to Holders . . . . . . . 38
Section 4.04 Compliance Certificate . . . . . . . . . . . . . . . . 38
Section 4.05 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 4.06 Stay, Extension and Usury Laws . . . . . . . . . . . . 39
Section 4.07 Limitation on Indebtedness . . . . . . . . . . . . . . 39
Section 4.08 Limitation on Senior Subordinated Indebtedness . . . . 41
Section 4.09 Limitation on Liens . . . . . . . . . . . . . . . . . . 41
Section 4.10 Limitation on Restricted Payments . . . . . . . . . . . 42
Section 4.11 Limitation on Dividend and Other Payment
Restrictions Affecting Restricted Subsidiaries . . . . 43
Section 4.12 Limitation on the Issuance and Sale of Capital Stock
of Restricted Subsidiaries . . . . . . . . . . . . . . 44
Section 4.13 Additional Subsidiary Guarantees . . . . . . . . . . . 45
Section 4.14 Limitation on Transactions with Affiliates and
Certain Stockholders . . . . . . . . . . . . . . . . . 45
Section 4.15 Limitation on Asset Sales . . . . . . . . . . . . . . . 46
Section 4.16 Repurchase of Notes upon a Change of Control . . . . . 47
ARTICLE 5
SUCCESSORS
Section 5.01 Merger, Consolidation or Sale of Assets . . . . . . . . 47
Section 5.02 Successor Corporation Substituted . . . . . . . . . . . 48
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01 Events of Default . . . . . . . . . . . . . . . . . . . 48
Section 6.02 Acceleration . . . . . . . . . . . . . . . . . . . . . 49
Section 6.03 Other Remedies . . . . . . . . . . . . . . . . . . . . 50
Section 6.04 Waiver of Past Defaults . . . . . . . . . . . . . . . . 50
Section 6.05 Control by Majority . . . . . . . . . . . . . . . . . . 50
Section 6.06 Limitation on Suits . . . . . . . . . . . . . . . . . . 51
Section 6.07 Rights of Holders of Notes to Receive Payment . . . . . 51
Section 6.08 Collection Suit by Trustee . . . . . . . . . . . . . . 51
Section 6.09 Trustee May File Proofs of Claim . . . . . . . . . . . 52
Section 6.10 Priorities . . . . . . . . . . . . . . . . . . . . . . 52
Section 6.11 Undertaking for Costs . . . . . . . . . . . . . . . . . 52
<PAGE>
ARTICLE 7
TRUSTEE
Section 7.01 Duties of Trustee . . . . . . . . . . . . . . . . . . . 53
Section 7.02 Rights of Trustee . . . . . . . . . . . . . . . . . . . 54
Section 7.03 Individual Rights of Trustee . . . . . . . . . . . . . 55
Section 7.04 Trustee's Disclaimer . . . . . . . . . . . . . . . . . 55
Section 7.05 Notice of Defaults . . . . . . . . . . . . . . . . . . 55
Section 7.06 Reports by Trustee to Holders of the Notes . . . . . . 55
Section 7.07 Compensation and Indemnity . . . . . . . . . . . . . . 56
Section 7.08 Replacement of Trustee . . . . . . . . . . . . . . . . 56
Section 7.09 Successor Trustee by Merger, etc. . . . . . . . . . . . 57
Section 7.10 Eligibility; Disqualification . . . . . . . . . . . . . 57
Section 7.11 Preferential Collection of Claims Against Company . . . 58
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01 Option to Effect Legal Defeasance or Covenant
Defeasance . . . . . . . . . . . . . . . . . . . . . . 58
Section 8.02 Legal Defeasance and Discharge . . . . . . . . . . . . 58
Section 8.03 Covenant Defeasance . . . . . . . . . . . . . . . . . . 59
Section 8.04 Conditions to Legal or Covenant Defeasance . . . . . . 59
Section 8.05 Deposited Money and Government Securities to be Held
in Trust; Other Miscellaneous Provisions . . . . . . . 60
Section 8.06 Repayment to Company . . . . . . . . . . . . . . . . . 61
Section 8.07 Reinstatement . . . . . . . . . . . . . . . . . . . . . 61
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01 Without Consent of Holders of Notes . . . . . . . . . . 62
Section 9.02 With Consent of Holders of Notes . . . . . . . . . . . 62
Section 9.03 Compliance with Trust Indenture Act . . . . . . . . . . 64
Section 9.04 Revocation and Effect of Consents . . . . . . . . . . . 64
Section 9.05 Notation on or Exchange of Notes . . . . . . . . . . . 64
Section 9.06 Trustee to Sign Amendments, etc. . . . . . . . . . . . 64
<PAGE>
ARTICLE 10
SUBSIDIARY GUARANTEES
Section 10.01 Subsidiary Guarantees . . . . . . . . . . . . . . . . . 64
Section 10.02 Execution and Delivery of Subsidiary Guarantees . . . . 66
Section 10.03 Subsidiary Guarantors May Consolidate, etc., on
Certain Terms . . . . . . . . . . . . . . . . . . . . . 66
Section 10.04 Releases . . . . . . . . . . . . . . . . . . . . . . . 67
Section 10.05 Limitation of Subsidiary Guarantor's Liability . . . . 68
Section 10.06 Application of Certain Terms and Provisions to the
Subsidiary Guarantors . . . . . . . . . . . . . . . . . 68
Section 10.07 Subordination of Subsidiary Guarantees . . . . . . . . 68
ARTICLE 11
SUBORDINATION
Section 11.01 Agreement to Subordinate . . . . . . . . . . . . . . . 69
Section 11.02 Liquidation; Dissolution; Bankruptcy . . . . . . . . . 69
Section 11.03 Default on Designated Senior Indebtedness . . . . . . . 69
Section 11.04 Acceleration of Notes . . . . . . . . . . . . . . . . . 70
Section 11.05 When Distribution Must be Paid Over . . . . . . . . . . 70
Section 11.06 Notice by Company . . . . . . . . . . . . . . . . . . . 70
Section 11.07 Subrogation . . . . . . . . . . . . . . . . . . . . . . 71
Section 11.08 Relative Rights . . . . . . . . . . . . . . . . . . . . 71
Section 11.09 Subordination May Not Be Impaired by Company . . . . . 71
Section 11.10 Distribution or Notice to Representative . . . . . . . 71
Section 11.11 Rights of Trustee and Paying Agent . . . . . . . . . . 72
Section 11.12 Authorization to Effect Subordination . . . . . . . . . 72
Section 11.13 Amendments . . . . . . . . . . . . . . . . . . . . . . 72
ARTICLE 12
MISCELLANEOUS
Section 12.01 Trust Indenture Act Controls . . . . . . . . . . . . . 73
Section 12.02 Notices . . . . . . . . . . . . . . . . . . . . . . . . 73
Section 12.03 Communication by Holders of Notes with Other Holders
of Notes . . . . . . . . . . . . . . . . . . . . . . . 74
Section 12.04 Certificate and Opinion as to Conditions Precedent . . 74
Section 12.05 Statements Required in Certificate or Opinion . . . . . 74
Section 12.06 Rules by Trustee and Agents . . . . . . . . . . . . . . 75
Section 12.07 No Personal Liability of Directors, Officers,
Employees and Stockholders . . . . . . . . . . . . . . 75
<PAGE>
Section 12.08 Governing Law . . . . . . . . . . . . . . . . . . . . . 75
Section 12.09 No Adverse Interpretation of Other Agreements . . . . . 75
Section 12.10 Successors . . . . . . . . . . . . . . . . . . . . . . 75
Section 12.11 Severability . . . . . . . . . . . . . . . . . . . . . 75
Section 12.12 Counterpart Originals . . . . . . . . . . . . . . . . . 75
Section 12.13 Table of Contents, Headings, Etc. . . . . . . . . . . . 75
EXHIBITS
EXHIBIT A FORM OF NOTE AND SUBSIDIARY GUARANTEE
EXHIBIT B FORM OF CERTIFICATE OF TRANSFER
EXHIBIT C FORM OF CERTIFICATE OF EXCHANGE
EXHIBIT D FORM OF CERTIFICATE FROM ACQUIRING INSTITUTIONAL
ACCREDITED INVESTOR
EXHIBIT E FORM OF SUPPLEMENTAL INDENTURE
<PAGE>
INDENTURE, dated as of April 14, 1998, among Foodmaker, Inc., a
Delaware corporation (the "Company"), the Subsidiary Guarantors (as defined)
and First Union National Bank, as trustee (the "Trustee").
Each party agrees as follows for the benefit of each other and for
the equal and ratable benefit of the Holders of the 8 3/8% Series A Senior
Subordinated Notes due 2008 (the "Series A Notes") and the 8 3/8% Series B
Senior Subordinated Notes due 2008 (the "Series B Notes" and, together with
the Series A Notes, the "Notes"):
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01 Definitions
"144A Global Note" means a global note in the form of Exhibit A
hereto bearing the Global Note Legend and the Private Placement Legend and
deposited with or on behalf of, and registered in the name of, the Depositary
or its nominee that will be issued in a denomination equal to the outstanding
principal amount of the Notes sold in reliance on Rule 144A.
"Accrued Bankruptcy Interest" means, with respect to any
Indebtedness, all interest accruing thereon after the filing of a petition by
or against the Company or any of its Subsidiaries under any Bankruptcy Law,
in accordance with and at the rate (including any rate applicable upon any
default or event of default, to the extent lawful) specified in the documents
evidencing or governing such Indebtedness, whether or not the claim for such
interest is allowed as a claim after such filing in any proceeding under such
Bankruptcy Law.
"Acquired Indebtedness" means Indebtedness of a Person existing at
the time such Person becomes a Restricted Subsidiary or assumed in connection
with an Asset Acquisition from such Person by a Restricted Subsidiary and not
Incurred by such Person in connection with, or in anticipation of, such
Person becoming a Restricted Subsidiary or such Asset Acquisition; provided
that Indebtedness of such Person which is redeemed, defeased, retired or
otherwise repaid at the time of or immediately upon consummation of the
transactions by which such Person becomes a Restricted Subsidiary or such
Asset Acquisition shall not be Acquired Indebtedness.
"Additional Interest" means all additional interest then owing
pursuant to the Registration Rights Agreement.
"Adjusted Consolidated Net Income" means, for any period, the
aggregate net income (or loss) of the Company and its Restricted Subsidiaries
for such period determined on a consolidated basis in conformity with GAAP;
provided that the following items shall be excluded in computing Adjusted
Consolidated Net Income (without duplication): (i) the net income of any
Person (other than the Company or a Restricted Subsidiary), except to the
extent of the amount of dividends or other distributions actually paid to the
Company or any of its Restricted Subsidiaries by such Person during such
period; (ii) solely for the purposes of calculating the amount of Restricted
Payments that may be made pursuant to clause (C) of the first paragraph of
Section 4.10 (and in such case, except to the extent includable pursuant to
clause (i) above), the net income (or loss) of any Person accrued prior to
the date it becomes a Restricted Subsidiary or is merged into or consolidated
with the Company or any of its Restricted Subsidiaries or all or substan-
tially all of the property and assets of such Person are acquired by the
Company or any of its Restricted Subsidiaries; (iii) the net income of any
<PAGE>
2
Restricted Subsidiary to the extent that the declaration or payment of
dividends or similar distributions by such Restricted Subsidiary of such net
income to the Company or any Restricted Subsidiary is not at the time of such
determination permitted by the operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to such Restricted Subsidiary; (iv) any gains or losses
(on an after-tax basis) attributable to Asset Sales; (v) except for purposes
of calculating the amount of Restricted Payments that may be made pursuant to
clause (C) of the first paragraph of Section 4.10, any amount paid as
dividends on Preferred Stock of the Company or paid or accrued as dividends
on Preferred Stock of any Restricted Subsidiary, in each case owned by
Persons other than the Company and any of its Restricted Subsidiaries; and
(vi) all extraordinary gains and extraordinary losses.
"Adjusted Consolidated Net Tangible Assets" means the total amount
of assets of the Company and its Restricted Subsidiaries (less applicable
depreciation, amortization and other valuation reserves), except to the
extent resulting from write-ups of capital assets (excluding write-ups in
connection with accounting for acquisitions in conformity with GAAP), after
deducting therefrom (i) all current liabilities of the Company and its
Restricted Subsidiaries (excluding intercompany items and Indebtedness having
a maturity of less than 12 months from the date of the most recent quarterly
or annual consolidated balance sheet of the Company but which by its terms is
renewable or extendible beyond 12 months from such date at the option of the
borrower) and (ii) all goodwill, trade names, trademarks, patents,
unamortized debt discount and expense and other like intangibles, all as set
forth on the most recent quarterly or annual consolidated balance sheet of
the Company, prepared in conformity with GAAP and filed with the Commission
or provided to the Trustee pursuant Section 4.03.
"Affiliate" means, as applied to any Person, any other Person
directly or indirectly controlling, controlled by, or under direct or
indirect common control with, such Person. For purposes of this definition,
"control" (including, with correlative meanings, the terms "controlling,"
"controlled by" and "under common control with"), as applied to any Person,
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of such Person, whether through
the ownership of voting securities, by contract or otherwise.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Applicable Procedures" means, with respect to any transfer or
exchange of or for beneficial interests in any Global Note, the rules and
procedures of the Depositary, Euroclear and Cedel that apply to such transfer
or exchange.
"Asset Acquisition" means (i) an investment by the Company or any
of its Restricted Subsidiaries in any other Person pursuant to which such
Person shall become a Restricted Subsidiary or shall be merged into or
consolidated with the Company or any of its Restricted Subsidiaries; provided
that such Person's primary business is related, ancillary or complementary to
the businesses of the Company and its Restricted Subsidiaries on the date of
such investment or (ii) an acquisition by the Company or any of its
Restricted Subsidiaries of the property and assets of any Person other than
the Company or any of its Restricted Subsidiaries that constitute
substantially all of a division or line of business of such Person; provided
that the property and assets acquired are related, ancillary or complementary
to the businesses of the Company and its Restricted Subsidiaries on the date
of such acquisition and provided further that the acquisition of two or fewer
restaurants from a single franchisee will not constitute an Asset
Acquisition.
<PAGE>
3
"Asset Disposition" means the sale or other disposition by the
Company or any of its Restricted Subsidiaries (other than to the Company or
another Restricted Subsidiary) of (i) all or substantially all of the Capital
Stock of any Restricted Subsidiary of the Company or (ii) all or
substantially all of the assets that constitute a division or line of
business of the Company or any of its Restricted Subsidiaries.
"Asset Sale" means any sale, transfer or other disposition
(including by way of merger, consolidation or sale-leaseback transaction) in
one transaction or a series of related transactions by the Company or any of
its Restricted Subsidiaries to any Person other than the Company or any of
its Restricted Subsidiaries of (i) all or any of the Capital Stock of any
Restricted Subsidiary, (ii) all or substantially all of the property and
assets of a division or line of business of the Company or any of its
Restricted Subsidiaries or (iii) any other property and assets of the Company
or any of its Restricted Subsidiaries (other than the Capital Stock or other
Investment in an Unrestricted Subsidiary) outside the ordinary course of
business of the Company or such Restricted Subsidiary and, in each case, that
is not governed by the provisions of this Indenture applicable to mergers,
consolidations and sales of assets of the Company; provided that "Asset Sale"
shall not include (a) sales or other dispositions of inventory, receivables
and other current assets, (b) sales, transfers or other dispositions of
assets with a fair market value not in excess of $2,000,000 in any
transaction or series of related transactions, (c) sales, transfers or other
dispositions of assets constituting a Restricted Payment permitted to be made
under Section 4.10, (d) sales or other dispositions of assets for consider-
ation at least equal to the fair market value of the assets sold or disposed
of, to the extent that the consideration received would satisfy clause (B) of
Section 4.15, (e) sales, transfers or other dispositions of property or
equipment that has become worn out, obsolete or damaged or otherwise
unsuitable for use in connection with the business of the Company or its
Restricted Subsidiaries, (f) the sale, transfer or other disposition of any
property or assets by any Restricted Subsidiary to the Company or any Subsid-
iary Guarantor, (g) the sale, transfer or other disposition of real property
on which a restaurant is located in exchange for other real property on which
a restaurant will be located, which acquired real property has a fair market
value at least equal to the fair market value of the real property being
sold, transferred or disposed of, (h) the sale, transfer or other disposition
to a franschisee of the Company, within 12 months of the acquisition thereof,
of any restaurant that has been acquired by the Company from a franchisee of
the Company, if the consideration received in such sale, transfer or other
disposition is at least equal to the consideration paid to acquire such
restaurant and (j) the sale of property acquired or constructed after the
date of this Indenture for cash consideration equal to or greater than the
fair market value of such property in a sale and leaseback transaction in
which such property is leased by the Company or the Restricted Subsidiary
that sold such property; provided, that to the extent that the proceeds from
such sale are not invested in property or assets of a nature or type that are
used in a business similar or related to the nature or type of the property
and assets of, or the business of, the Company and its Restricted
Subsidiaries on or before the date that is 12 months following such sale,
such sale shall be deemed to constitute an "Asset Sale" occurring as of such
date.
"Average Life" means, at any date of determination with respect to
any debt security, the quotient obtained by dividing (i) the sum of the
products of (a) the number of years from such date of determination to the
dates of each successive scheduled principal payment of such debt security
and (b) the amount of such principal payment by (ii) the sum of all such
principal payments.
"Board of Directors" means the Board of Directors of the Company,
or any authorized committee of the Board of Directors.
<PAGE>
4
"Board Resolution" means a resolution duly adopted by the Board of
Directors.
"Business Day" means any day other than a Legal Holiday.
"Capital Stock" means, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated,
whether voting or non-voting) in equity of such Person, whether outstanding
on the Closing Date or issued thereafter, including, without limitation, all
Common Stock and Preferred Stock.
"Capitalized Lease" means, as applied to any Person, any lease of
any property (whether real, personal or mixed) of which the discounted
present value of the rental obligations of such Person as lessee, in
conformity with GAAP, is required to be capitalized on the balance sheet of
such Person.
"Capitalized Lease Obligations" means the discounted present value
of the rental obligations under a Capitalized Lease.
"Cedel" means Cedel Bank, SA.
"Change of Control" means such time as (i) a "person" or "group"
(within the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act),
becomes the ultimate "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act) of more than 40% of the total voting power of the Voting Stock
of the Company on a fully diluted basis; or (ii) individuals who on the
Closing Date constitute the Board of Directors (together with any new or
replacement directors whose election by the Board of Directors or whose
nomination by the Board of Directors for election by the Company's
stockholders was approved by a vote of at least a majority of the members of
the Board of Directors then still in office who either were members of the
Board of Directors on the Closing Date or whose election or nomination for
election was so approved) cease for any reason to constitute a majority of
the members of the Board of Directors then in office.
"Closing Date" means the date on which the Notes are originally
issued under this Indenture.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated,
whether voting or non-voting) of such Person's equity, whether outstanding on
the Closing Date or issued thereafter, including, without limitation, all
series and classes of common stock.
"Consolidated EBITDA" means, for any period, Adjusted Consolidated
Net Income for such period plus, to the extent such amount was deducted in
calculating such Adjusted Consolidated Net Income, (i) Consolidated Interest
Expense, (ii) income taxes (other than income taxes (either positive or
negative) attributable to extraordinary gains or losses or sales of assets),
(iii) depreciation expense, (iv) amortization expense and (v) all other non-
cash items reducing Adjusted Consolidated Net Income less all non-cash items
increasing Adjusted Consolidated Net Income; provided, that if any Restricted
Subsidiary is not a Wholly Owned Restricted Subsidiary, Consolidated EBITDA
<PAGE>
5
shall be reduced (to the extent not otherwise reduced in accordance with
GAAP) by an amount equal to (A) the amount of the Adjusted Consolidated Net
Income attributable to such Restricted Subsidiary multiplied by (B) the
percentage ownership interest in the income of such Restricted Subsidiary not
owned on the last day of such period by the Company or any of its Restricted
Subsidiaries.
"Consolidated Interest Expense" means, for any period, the
aggregate amount of interest in respect of Indebtedness (including, without
limitation, amortization of original issue discount on any Indebtedness and
the interest portion of any deferred payment obligation, calculated in
accordance with the effective interest method of accounting; all commissions,
discounts and other fees and charges owed with respect to letters of credit
and bankers' acceptance financing; the net costs associated with Interest
Rate Agreements; and Indebtedness that is Guaranteed or secured by the
Company or any of its Restricted Subsidiaries) and all but the principal
component of rentals in respect of Capitalized Lease Obligations paid,
accrued or scheduled to be paid or to be accrued by the Company and its
Restricted Subsidiaries during such period; excluding, however, (i) any
amount of such interest of any Restricted Subsidiary if the net income of
such Restricted Subsidiary is excluded in the calculation of Adjusted
Consolidated Net Income pursuant to clause (iii) of the definition thereof
(but only in the same proportion as the net income of such Restricted
Subsidiary is excluded from the calculation of Adjusted Consolidated Net
Income pursuant to clause (iii) of the definition thereof) and (ii) any
premiums, fees and expenses (and any amortization thereof) payable in
connection with the offering of the Notes or the establishment of the Credit
Agreement, all as determined on a consolidated basis (without taking into
account Unrestricted Subsidiaries) in conformity with GAAP.
"Consolidated Net Worth" means, at any date of determination,
stockholders' equity as set forth on the most recently available quarterly or
annual consolidated balance sheet of the Company and its Restricted
Subsidiaries (which shall be as of a date not more than 135 days prior to the
date of such computation, and which shall not take into account Unrestricted
Subsidiaries except as investments), less any amounts attributable to
Disqualified Stock or any equity security convertible into or exchangeable
for Indebtedness, the cost of treasury stock and the principal amount of any
promissory notes receivable from the sale of the Capital Stock of the Company
or any of its Restricted Subsidiaries, each item to be determined in
conformity with GAAP (excluding the effects of foreign currency exchange
adjustments under Financial Accounting Standards Board Statement of Financial
Accounting Standards No. 52).
"Corporate Trust Office" shall be at the address of the Trustee
specified in Section 12.02 hereof or such other address as to which the
Trustee may give notice to the Company.
"CRC Leases" means (i) the Master Lease between CRC-I Limited
Partnership, a Massachussetts limited partnership, and the Company, dated
December 15, 1993, as amended and supplemented from time to time, and (ii)
the Master Lease between CRC-II Limited Partnership, a Massachussetts limited
partnership, and the Company, dated December 15, 1993, as amended and
supplemented from time to time.
"CRC Obligations" means any Obligations of the Company or any
Restricted Subsidiary (i) under the CRC Leases and (ii) with respect to any
Indebtedness of the CRC Subsidiaries, CRC-I Limited Partnership, a
Massachussetts limited partnership, CRC-II Limited Partnership, a
Massachussetts limited partnership, or FM 1993A Corp., a Delaware
corporation.
<PAGE>
6
"CRC Subsidiaries" means FM 1997 Limited Partnership, a Delaware
limited partnership, and FM 1997 Corp., a Delaware corporation.
"Credit Agreement" means the credit agreement dated as of April 1,
1998, among the Company and certain Subsidiaries, various financial
institutions, NationsBanc Montgomery Securities LLC, as arranger, Credit
Lyonnais, Los Angeles Branch, as Documentation Agent, and NationsBank of
Texas, N.A., as administrative agent, together with any agreements, instru-
ments and documents executed or delivered pursuant to or in connection with
such credit agreement (including, without limitation, any Guarantees and
security documents), in each case as such credit agreement or such
agreements, instruments or documents may be amended (including any amendment
and restatement thereof), supplemented, extended, renewed, replaced or
otherwise modified from time to time, and including any agreement extending
the maturity of, refinancing or otherwise restructuring (including, but not
limited to, the inclusion of additional borrowers thereunder that are
Subsidiaries of the Company) all or any portion of the Indebtedness or
commitments or letters of credit under such agreement or any successor
agreement, as such agreement may be amended, renewed, extended, substituted,
replaced, restated and otherwise modified from time to time, whether or not
with the same agent or lenders and irrespective of any change in the terms
and conditions thereof, including increasing the amount of Indebtedness
incurred thereunder or available to be borrowed thereunder; provided that
such Indebtedness may be incurred under all of the provisions of this
Indenture.
"Currency Agreement" means any foreign exchange contract, currency
swap agreement or other similar agreement or arrangement.
"Default" means any event that is, or after notice or passage of
time or both would be, an Event of Default.
"Definitive Note" means a certificated Note registered in the name
of the Holder thereof and issued in accordance with Section 2.06 hereof, in
the form of Exhibit A hereto except that such Note shall not bear the Global
Note Legend and shall not have the "Schedule of Exchanges of Interests in the
Global Note" attached thereto.
"Depositary" means, with respect to the Notes issuable or issued in
whole or in part in global form, the Person specified in Section 2.03 hereof
as the Depositary with respect to the Notes, and any and all successors
thereto appointed as depositary hereunder and having become such pursuant to
the applicable provision of this Indenture.
"Designated Senior Indebtedness" means (i) any Indebtedness under
the Credit Agreement and (ii) any other Indebtedness constituting Senior
Indebtedness that, at the date of determination, has commitments for or an
aggregate principal amount outstanding of at least $25,000,000 and that is
specifically designated by the Issuer, in the instrument creating or
evidencing such Senior Indebtedness as "Designated Senior Indebtedness."
"Disqualified Stock" means any class or series of Capital Stock of
any Person that by its terms or otherwise is (i) required to be redeemed
prior to the Stated Maturity of the Notes, (ii) redeemable at the option of
the holder of such class or series of Capital Stock at any time prior to the
Stated Maturity of the Notes or (iii) convertible into or exchangeable for
Capital Stock referred to in clause (i) or (ii) above or Indebtedness having
<PAGE>
7
a scheduled maturity prior to the Stated Maturity of the Notes; provided that
any Capital Stock that would not constitute Disqualified Stock but for
provisions thereof giving holders thereof the right to require such Person to
repurchase or redeem such Capital Stock upon the occurrence of an "asset
sale" or "change of control" occurring prior to the Stated Maturity of the
Notes shall not constitute Disqualified Stock if the "asset sale" or "change
of control" provisions applicable to such Capital Stock are no more favorable
to the holders of such Capital Stock than the provisions contained Section
4.15 and Section 4.16 and such Capital Stock specifically provides that such
Person will not repurchase or redeem any such stock pursuant to such
provision prior to the Company's repurchase of such Notes as are required to
be repurchased pursuant to Section 4.15 and Section 4.16.
"Euroclear" means Morgan Guaranty Trust Company of New York,
Brussels office, as operator of the Euroclear system.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchange Offer" means the offer that may be made by the Company
pursuant to the Registration Rights Agreement to exchange Series B Notes for
Series A Notes.
"Fair market value" means the price that would be paid in an arm's-
length transaction between an informed and willing seller under no compulsion
to sell and an informed and willing buyer under no compulsion to buy, as
determined in good faith by the Board of Directors, whose determination shall
be conclusive if evidenced by a Board Resolution.
"Foreign Subsidiaries" means Foodmaker International (Hong Kong),
Ltd. and Foodmaker Franchise Overseas, Ltd.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect as of the Closing Date, including, without
limitation, those set forth in the opinions and pronouncements of the
Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board or in such other statements by such other entity as approved
by a significant segment of the accounting profession. All ratios and
computations contained or referred to in this Indenture shall be computed in
conformity with GAAP applied on a consistent basis, except that calculations
made for purposes of determining compliance with the terms of the covenants
and with other provisions of this Indenture shall be made without giving
effect to (i) the amortization of any expenses incurred in connection with
the offering of the Notes or the establishment of the Credit Agreement
(including the write-off of debt issuance costs in connection therewith), and
(ii) except as otherwise provided, the amortization of any amounts required
or permitted by Accounting Principles Board Opinion Nos. 16 and 17.
"Global Notes" means, individually and collectively, each of the
Restricted Global Notes and the Unrestricted Global Notes, in the form of
Exhibit A hereto issued in accordance with Section 2.01, 2.06(b)(iv),
2.06(d)(ii) or 2.06(f) hereof.
"Global Note Legend" means the legend set forth in Section
2.06(g)(ii), which is required to be placed on all Global Notes issued under
this Indenture.
<PAGE>
8
"Government Securities" means direct obligations of, obligations
fully guaranteed by, or participations in pools consisting solely of
obligations of or obligations guaranteed by, the United States of America for
the payment of which guarantee or obligations the full faith and credit of
the United States of America is pledged and which are not callable or
redeemable at the option of the issuer thereof.
"Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness of any other
Person and, without limiting the generality of the foregoing, any obligation,
direct or indirect, contingent or otherwise, of such Person (i) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness of such other Person (whether arising by virtue of partnership
arrangements, or by agreements to keep-well, to purchase assets, goods,
securities or services (unless such purchase arrangements are on arm's-length
terms and are entered into in the ordinary course of business), to take-or-
pay, or to maintain financial statement conditions or otherwise) or (ii)
entered into for purposes of assuring in any other manner the obligee of such
Indebtedness of the payment thereof or to protect such obligee against loss
in respect thereof (in whole or in part); provided that the term "Guarantee"
shall not include endorsements for collection or deposit in the ordinary
course of business. The term "Guarantee" used as a verb has a corresponding
meaning.
"Holder" means a Person in whose name a Note is registered on the
Registrar's books.
"Incur" means, with respect to any Indebtedness, to incur, create,
issue, assume, Guarantee or otherwise become liable for or with respect to,
or become responsible for, the payment of, contingently or otherwise, such
Indebtedness, including an "Incurrence" of Acquired Indebtedness; provided
that neither the accrual of interest nor the accretion of original issue
discount shall be considered an Incurrence of Indebtedness.
"Indebtedness" means, with respect to any Person at any date of
determination (without duplication), (i) all indebtedness of such Person for
borrowed money, (ii) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments, (iii) all obligations of such
Person in respect of letters of credit or other similar instruments
(including reimbursement obligations with respect thereto, but excluding
obligations with respect to letters of credit (including trade letters of
credit) securing obligations (other than obligations described in (i) or (ii)
above or (v), (vi) or (vii) below) entered into in the ordinary course of
business of such Person to the extent such letters of credit are not drawn
upon or, if drawn upon, to the extent such drawing is reimbursed no later
than the third Business Day following receipt by such Person of a demand for
reimbursement), (iv) all obligations of such Person to pay the deferred and
unpaid purchase price of property or services, which purchase price is due
more than six months after the date of placing such property in service or
taking delivery and title thereto or the completion of such services, except
Trade Payables, (v) all Capitalized Lease Obligations, (vi) all Indebtedness
of other Persons secured by a Lien on any asset of such Person, whether or
not such Indebtedness is assumed by such Person; provided that the amount of
such Indebtedness shall be the lesser of (A) the fair market value of such
asset at such date of determination and (B) the amount of such Indebtedness,
(vii) all Indebtedness of other Persons Guaranteed by such Person to the
extent such Indebtedness is Guaranteed by such Person and (viii) to the
extent not otherwise included in this definition, the CRC Obligations and
obligations under Currency Agreements and Interest Rate Agreements. The
amount of Indebtedness of any Person at any date shall be the outstanding
balance at such date of all unconditional obligations as described above and,
<PAGE>
9
with respect to contingent obligations, the maximum liability upon the
occurrence of the contingency giving rise to the obligation; provided (A)
that the amount outstanding at any time of any Indebtedness issued with
original issue discount is the face amount of such Indebtedness less the
remaining unamortized portion of the original issue discount of such
Indebtedness at such time as determined in conformity with GAAP, (B) that
money borrowed and set aside at the time of the Incurrence of any
Indebtedness in order to prefund the payment of the interest on such
Indebtedness shall not be deemed to be "Indebtedness" so long as such money
is held to secure the payment of such interest, and (C) that Indebtedness
shall not include any liability for federal, state, local or other taxes.
"Indenture" means this Indenture, as amended or supplemented from
time to time.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act, who is not also a QIB.
"Interest Coverage Ratio" means, on any Transaction Date, the ratio
of (i) the aggregate amount of Consolidated EBITDA for the then most recent
four fiscal quarters prior to such Transaction Date for which reports have
been filed with the Commission or provided to the Trustee pursuant to Section
4.03 (the "Four Quarter Period") to (ii) the aggregate Consolidated Interest
Expense during such Four Quarter Period. In making the foregoing
calculation, (A) pro forma effect shall be given to any Indebtedness Incurred
or repaid during the period (the "Reference Period") commencing on the first
day of the Four Quarter Period and ending on the Transaction Date (other than
Indebtedness Incurred under a revolving credit or similar arrangement to the
extent of the commitment thereunder (or under any predecessor revolving
credit or similar arrangement) in effect on the last day of such Four Quarter
Period except to the extent any portion of such Indebtedness is projected, in
the reasonable judgment of the senior management of the Company, to remain
outstanding for a period in excess of 12 months from the date of the
Incurrence thereof), in each case as if such Indebtedness had been Incurred
or repaid on the first day of such Reference Period (and pro forma effect
shall be given to the purchase of any U.S. government securities required to
be purchased with the proceeds of any such Indebtedness and set aside to
prefund the payment of interest on such Indebtedness at the time such
Indebtedness is Incurred); (B) Consolidated Interest Expense attributable to
interest on any Indebtedness (whether existing or being Incurred) computed on
a pro forma basis and bearing a floating interest rate shall be computed as
if the rate in effect on the Transaction Date (taking into account any
Interest Rate Agreement applicable to such Indebtedness if such Interest Rate
Agreement has a remaining term in excess of 12 months or, if shorter, at
least equal to the remaining term of such Indebtedness) had been the
applicable rate for the entire period; (C) pro forma effect shall be given to
Asset Dispositions and Asset Acquisitions (including giving pro forma effect
to the application of proceeds of any Asset Disposition and to any discharge
of or other relief from Indebtedness to which the Company and its continuing
Restricted Subsidiaries are not liable following any Asset Disposition) and
the designation of Unrestricted Subsidiaries as Restricted Subsidiaries that
occur during such Reference Period as if they had occurred and such proceeds
had been applied and such discharge or relief has occurred on the first day
of such Reference Period; and (D) pro forma effect shall be given to asset
dispositions and asset acquisitions (including giving pro forma effect to the
application of proceeds of any asset disposition and to any discharge of or
other relief from Indebtedness to which the Company and its continuing
Restricted Subsidiaries are not liable following any asset disposition) that
have been made by any Person that has become a Restricted Subsidiary or has
been merged with or into the Company or any Restricted Subsidiary during such
<PAGE>
10
Reference Period and that would have constituted Asset Dispositions or Asset
Acquisitions had such transactions occurred when such Person was a Restricted
Subsidiary as if such asset dispositions or asset acquisitions were Asset
Dispositions or Asset Acquisitions that occurred on the first day of such
Reference Period; provided that to the extent that clause (C) or (D) of this
sentence requires that pro forma effect be given to an Asset Acquisition or
Asset Disposition, such pro forma calculation shall be based upon the four
full fiscal quarters immediately preceding the Transaction Date of the
Person, or division or line of business of the Person, that is acquired or
disposed for which financial information is available.
"Interest Rate Agreement" means any interest rate protection
agreement, interest rate future agreement, interest rate option agreement,
interest rate swap agreement, interest rate cap agreement, interest rate
collar agreement, interest rate hedge agreement, option or future contract or
other similar agreement or arrangement.
"Investment" in any Person means any direct or indirect advance,
loan or other extension of credit (including, without limitation, by way of
Guarantee or similar arrangement; but excluding advances to customers,
suppliers or contractors in the ordinary course of business that are, in
conformity with GAAP, recorded as accounts receivable, prepaid expenses or
deposits on the balance sheet of the Company or its Restricted Subsidiaries)
or capital contribution to (by means of any transfer of cash or other
property to others or any payment for property or services for the account or
use of others), or any purchase or acquisition of Capital Stock, bonds,
notes, debentures or other similar instruments issued by, such Person and
shall include (i) the designation of a Restricted Subsidiary as an
Unrestricted Subsidiary and (ii) the fair market value of the Capital Stock
(or any other Investment), held by the Company or any of its Restricted
Subsidiaries, of (or in) any Person that has ceased to be a Restricted
Subsidiary, including without limitation, by reason of any transaction
permitted by clause (iii) of Section 4.12; provided that the fair market
value of the Investment remaining in any Person that has ceased to be a
Restricted Subsidiary shall not exceed the aggregate amount of Investments
previously made in such Person valued at the time such Investments were made
less the net reduction of such Investments. For purposes of the definition
of "Unrestricted Subsidiary" and Section 4.10, (i) "Investment" shall include
the fair market value of the assets (net of liabilities (other than
liabilities to the Company or any of its Restricted Subsidiaries)) of any
Restricted Subsidiary at the time that such Restricted Subsidiary is
designated an Unrestricted Subsidiary, (ii) the fair market value of the
assets (net of liabilities (other than liabilities to the Company or any of
its Restricted Subsidiaries)) of any Unrestricted Subsidiary at the time that
such Unrestricted Subsidiary is designated a Restricted Subsidiary shall be
considered a reduction in outstanding Investments and (iii) any property
transferred to or from an Unrestricted Subsidiary shall be valued at its fair
market value at the time of such transfer. Notwithstanding the foregoing, in
no event shall any issuance of Capital Stock (other than Disqualified Stock)
of the Company in exchange for Capital Stock, property or assets of another
Person or any redemption or repurchase of the Notes or other Indebtedness of
the Company or any Restricted Subsidiary for cash constitute an Investment by
the Company in such other Person.
"Legal Holiday" means a Saturday, a Sunday or a day on which
banking institutions in the City of New York or Newark, New Jersey, or
Charlotte, North Carolina at a place of payment are authorized by law,
regulation or executive order to remain closed. If a payment date is a Legal
Holiday at a place of payment, payment may be made at that place on the next
succeeding day that is not a Legal Holiday, and no interest shall accrue for
the intervening period.
<PAGE>
11
"Letter of Transmittal" means the letter of transmittal to be
prepared by the Company and sent to all Holders of the Notes for use by such
Holders in connection with the Exchange Offer.
"Lien" means any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind (including, without limitation, any conditional
sale or other title retention agreement or lease in the nature thereof or any
agreement to give any security interest).
"Moody's" means Moody's Investors Service, Inc. and its successors.
"Notes Custodian" means the Trustee, as custodian with respect to
the Notes in global form, or any successor entity thereto.
"Net Cash Proceeds" means, (a) with respect to any Asset Sale, the
proceeds of such Asset Sale in the form of cash or cash equivalents,
including payments in respect of deferred payment obligations (to the extent
corresponding to the principal, but not interest, component thereof) when
received in the form of cash or cash equivalents (except to the extent such
obligations are financed or sold with recourse to the Company or any
Restricted Subsidiary) and proceeds from the conversion of other property
received when converted to cash or cash equivalents, net of (i) brokerage
commissions and other fees and expenses (including fees and expenses of
counsel and investment bankers) related to such Asset Sale, (ii) provisions
for all taxes (whether or not such taxes will actually be paid or are
payable) as a result of such Asset Sale without regard to the consolidated
results of operations of the Company and its Restricted Subsidiaries, taken
as a whole, (iii) payments made to repay Indebtedness or any other obligation
outstanding at the time of such Asset Sale that either (A) is secured by a
Lien on the property or assets sold or (B) is required to be paid as a result
of such sale and (iv) appropriate amounts to be provided by the Company or
any Restricted Subsidiary as a reserve against any liabilities associated
with such Asset Sale, including, without limitation, pension and other
post-employment benefit liabilities, liabilities related to environmental
matters and liabilities under any indemnification obligations associated with
such Asset Sale, all as determined in conformity with GAAP and (b) with
respect to any issuance or sale of Capital Stock, the proceeds of such
issuance or sale in the form of cash or cash equivalents, including payments
in respect of deferred payment obligations (to the extent corresponding to
the principal, but not interest, component thereof) when received in the form
of cash or cash equivalents (except to the extent such obligations are
financed or sold with recourse to the Company or any Restricted Subsidiary)
and proceeds from the conversion of other property received when converted to
cash or cash equivalents, net of attorney's fees, accountants' fees,
underwriters' or placement agents' fees, discounts or commissions and
brokerage, consultant and other fees incurred in connection with such
issuance or sale and net of taxes paid or payable as a result thereof.
"Obligations" means any principal, interest, premium, if any,
penalties, fees, indemnifications, reimbursements, damages or other
liabilities payable under the documentation governing or otherwise in respect
of any Indebtedness.
"Offer to Purchase" means an offer to purchase Notes by the Company
from the Holders commenced by mailing a notice to the Trustee and each Holder
stating: (i) the covenant pursuant to which the offer is being made and that
all Notes validly tendered will be accepted for payment on a pro rata basis;
(ii) the purchase price and the date of purchase (which shall be a Business
Day no earlier than 30 days nor later than 60 days from the date such notice
is mailed) (the "Payment Date"); (iii) that any Note not tendered will
<PAGE>
12
continue to accrue interest pursuant to its terms; (iv) that, unless the
Company defaults in the payment of the purchase price, any Note accepted for
payment pursuant to the Offer to Purchase shall cease to accrue interest on
and after the Payment Date; (v) that Holders electing to have a Note
purchased pursuant to the Offer to Purchase will be required to surrender the
Note, together with the form entitled "Option of the Holder to Elect
Purchase" on the reverse side of the Note completed, to the Paying Agent at
the address specified in the notice prior to the close of business on the
Business Day immediately preceding the Payment Date; (vi) that Holders will
be entitled to withdraw their election if the Paying Agent receives, not
later than the close of business on the third Business Day immediately
preceding the Payment Date, a telegram, facsimile transmission or letter
setting forth the name of such Holder, the principal amount of Notes
delivered for purchase and a statement that such Holder is withdrawing his
election to have such Notes purchased; and (vii) that Holders whose Notes are
being purchased only in part will be issued new Notes equal in principal
amount to the unpurchased portion of the Notes surrendered; provided that
each Note purchased and each new Note issued shall be in a principal amount
of $1,000 or integral multiples thereof. On the Payment Date, the Company
shall (i) accept for payment on a pro rata basis Notes or portions thereof
tendered pursuant to an Offer to Purchase; (ii) deposit with the Paying Agent
money sufficient to pay the purchase price of all Notes or portions thereof
so accepted; and (iii) deliver, or cause to be delivered, to the Trustee all
Notes or portions thereof so accepted together with an Officers' Certificate
specifying the Notes or portions thereof accepted for payment by the Company.
The Paying Agent shall promptly mail to the Holders of Notes so accepted
payment in an amount equal to the purchase price, and the Trustee shall
promptly authenticate and mail to such Holders a new Note equal in principal
amount to any unpurchased portion of the Note surrendered; provided that each
Note purchased and each new Note issued shall be in a principal amount of
$1,000 or integral multiples thereof. The Company will publicly announce the
results of an Offer to Purchase as soon as practicable after the Payment
Date. The Trustee shall act as the Paying Agent for an Offer to Purchase.
The Company will comply with Rule 14e-1 under the Exchange Act and any other
securities laws and regulations thereunder to the extent such laws and
regulations are applicable, in the event that the Company is required to
repurchase Notes pursuant to an Offer to Purchase. To the extent that the
provisions of any securities laws or regulations conflict with the provisions
for such Offer to Purchase, the Company will comply with the applicable
securities laws and regulations and will not be deemed to have breached its
obligations with respect to such Offer to Purchase by virture thereof.
"Offering" means the offering of the Notes by the Company.
"Officer" means, with respect to any Person, the Chairman of the
Board, the Chief Executive Officer, the President, the Chief Operating
Officer, the Chief Financial Officer, the Treasurer, the Controller, the
Secretary or any Executive Vice-President of such Person.
"Officers' Certificate" means a certificate signed on behalf of the
Company by two Officers of the Company, one of whom must be the principal
executive officer, the principal financial officer, the treasurer or the
principal accounting officer of the Company, that meets the requirements of
Section 12.05 hereof.
"Old Senior Notes" means the 9 1/4% Senior Notes due 1999 of the
Company.
"Old Senior Subordinated Notes" means the 9 3/4% Senior
Subordinated Notes due 2002 of the Company.
<PAGE>
13
"Opinion of Counsel" means an opinion from legal counsel who is
reasonably acceptable to the Trustee, that meets the requirements of Section
12.05 hereof. The counsel may be an employee of or counsel to the Company or
any Subsidiary of the Company.
"Pari Passu Indebtedness" means all Indebtedness of the Company
ranking pari passu in right of payment with the Notes.
"Participating Broker-Dealer" has the meaning set forth in the
Registration Rights Agreement.
"Participant" means, with respect to the Depositary, Euroclear or
Cedel, a Person who has an account with the Depositary, Euroclear or Cedel,
respectively (and, with respect to The Depository Trust Company, shall
include Euroclear and Cedel).
"Permitted Investment" means (i) an Investment in the Company or a
Restricted Subsidiary or a Person which will, upon the making of such
Investment, become a Restricted Subsidiary or be merged or consolidated with
or into or transfer or convey all or substantially all its assets to, the
Company or a Restricted Subsidiary; provided that such person's primary
business is related, ancillary or complementary to the businesses of the
Company and its Restricted Subsidiaries on the date of such Investment; (ii)
Temporary Cash Investments; (iii) payroll, travel and similar advances to
cover matters that are expected at the time of such advances ultimately to be
treated as expenses in accordance with GAAP; (iv) stock, obligations or
securities received in satisfaction of judgments or good faith settlement of
litigation, disputes or other debts; (v) Interest Rate Agreements and
Currency Agreements designed solely to protect the Company or its Restricted
Subsidiaries against fluctuations in interest rates or foreign currency
exchange rates; (vi) Investments in any Person the primary business of which
is related, ancillary or complementary to the businesses of the Company and
its Restricted Subsidiaries; provided that the aggregate amount of such
Investments does not exceed $25,000,000 plus the net reduction in such
Investments; (vii) Investments in prepaid expenses, negotiable instruments
held for collection and lease, utility, workers' compensation and other
similar deposits; (viii) Investments made as a result of the receipt of non-
cash consideration from an Asset Sale that was made in compliance with
Section 4.15; and (ix) documented loans on commercially reasonable terms to
the Company's franchisees in the ordinary course of business of the Company
and its Restricted Subsidiaries in an aggregate principal amount not to
exceed $5,000,000 at any time outstanding.
"Permitted Junior Securities" means Capital Stock of the Company or
any Subsidiary Guarantor or debt securities of the Company or any Subsidiary
Guarantor that are subordinated to all Senior Indebtedness (and any debt
securities issued in exchange for Senior Indebtedness) to substantially the
same extent as, or to a greater extent than, the Notes are subordinated to
Senior Indebtedness pursuant to this Indenture.
"Permitted Lien" means (i) Liens existing on the date of such
Indenture; (ii) Liens for taxes, assessments or governmental charges or
claims which are not yet delinquent or which are being contested in good
faith by appropriate proceedings promptly instituted and diligently conducted
and if a reserve or other appropriate provision, if any, as shall be required
in conformity with GAAP shall have been made therefor, (iii) statutory Liens
or landlords', carriers', warehousemen's, mechanics', suppliers',
materialmen's, repairmen's or other like Liens arising in the ordinary course
<PAGE>
14
of business and with respect to amounts not yet delinquent or being contested
in good faith by appropriate process of law, if a reserve or other
appropriate provisions, if any, as shall be required by generally accepted
accounting principles shall have been made therefor; (iv) Liens (other than
any Lien imposed by the Employee Retirement Income Security Act of 1974, as
amended) incurred or deposits made in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other types
of social security; (v) Liens incurred or deposits made to secure the
performance of tenders, bids, leases, statutory obligations, surety and
appeal bonds, government contracts, performance and return-of-money bonds and
other obligations of like nature incurred in the ordinary course of business
(exclusive of obligations for the payment of borrowed money); (vi) attachment
or judgment Liens not giving rise to a Default or an Event of Default; (vii)
easements, rights-of-way, restrictions and other similar charges or
encumbrances not interfering with the ordinary conduct of the business of the
Company or any of its Subsidiaries; (viii) leases or subleases granted to
others not interfering with the ordinary conduct of the business of the
Company or any of its Subsidiaries; (ix) purchase money Liens incurred to
secure the purchase price of property, which Lien shall not cover any
property other than that being acquired, purchased, improved or constructed,
and shall not cover property purchased, acquired, constructed or improved
more than 18 months before the creation of such Lien; (x) title defects or
irregularities which do not in the aggregate materially impair the use of the
property; (xi) any interest or title of a lessor under Capitalized Lease
Obligations otherwise permitted under this Indenture; (xii) Liens securing
obligations under the Credit Agreement and the other documents entered into
in connection therewith, including, without limitation, Interest Rate
Agreements and Currency Agreements relating thereto or otherwise in respect
thereof; (xiii) Liens securing Acquired Indebtedness created prior to (and
not in connection with or in contemplation of) the incurrence of such
Indebtedness by the Company or any Restricted Subsidiary; provided that such
Lien does not extend to any property or assets of the Company or any Subsid-
iary other than the assets acquired in connection with the incurrence of such
Acquired Indebtedness; (xiv) extensions, renewals or refunding of any Liens
referred to in clauses (i) through (xiii) above; provided that the renewal,
extension or refunding is limited to all or part of the property securing the
original Lien; (xiv) Liens in addition to the foregoing provided that the
amount of the obligations secured by such Liens does not exceed in the
aggregate $1,000,000.
"Placement Agents" mean the placement agents under the placement
agreement, dated as of April 8, 1998, with respect to the Notes.
"Preferred Stock" means, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated,
whether voting or non-voting) of such Person's preferred or preference stock,
whether outstanding on the Closing Date or issued thereafter, including,
without limitation, all series and classes of such preferred or preference
stock.
"Private Placement Legend" means the legend set forth in Section
2.06(g)(i) to be placed on all Notes issued under this Indenture except where
otherwise permitted by the provisions of this Indenture.
"QIB" means a "qualified institutional buyer" as defined in Rule
144A.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of the date of this Indenture, by and among the Company,
the Subsidiary Guarantors and the Placement Agents, as such agreement may be
amended, modified or supplemented from time to time.
<PAGE>
15
"Regulation S" means Regulation S promulgated under the Securities
Act.
"Regulation S Global Note" means a permanent global Note in the
form of Exhibit A hereto bearing the Global Note Legend and the Private
Placement Legend and deposited with or on behalf of and registered in the
name of the Depositary or its nominee, issued in a denomination equal to the
outstanding principal amount of the Notes initially sold in reliance on Rule
903 of Regulation S.
"Representative" means the indenture trustee or other trustee,
agent or representative for any Designated Senior Indebtedness.
"Restricted Definitive Note" means a Definitive Note bearing the
Private Placement Legend.
"Restricted Global Note" means a Global Note bearing the Private
Placement Legend.
"Restricted Period" means the 40-day restricted period as defined
in Regulation S.
"Restricted Subsidiary" means any Subsidiary of the Company other
than an Unrestricted Subsidiary.
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Indebtedness" means the following obligations of the
Company or the Subsidiary Guarantors, whether outstanding on the Closing Date
or thereafter Incurred: (i) all Indebtedness and all other monetary
obligations (including, without limitation, expenses, fees, principal,
interest, reimbursement obligations under letters of credit and indemnities
payable in connection therewith) of the Company or the Subsidiary Guarantors
under (or in respect of) the Credit Agreement or any Interest Rate Agreement
or Currency Agreement relating to or otherwise in respect of the Indebtedness
under the Credit Agreement and (ii) all other Indebtedness and all other
monetary obligations of the Company or the Subsidiary Guarantors (other than
the Notes, but including the CRC Obligations), including principal and
interest on such Indebtedness, unless such Indebtedness, by its terms or by
the terms of any agreement or instrument pursuant to which such Indebtedness
is issued, is pari passu with, or subordinated in right of payment to, the
Notes or the Subsidiary Guarantees, as the case may be; provided that the
term "Senior Indebtedness" shall not include (a) any Indebtedness of the
Company or the Subsidiary Guarantors that, when Incurred, was without
recourse to the Company or the Subsidiary Guarantor, as the case may be, (b)
any Indebtedness of the Company to a Subsidiary of the Company, or to a joint
venture in which the Company has an interest, (c) any Indebtedness of the
Company or a Subsidiary Guarantor, as the case may be, to the extent not
permitted by Section 4.07 or Section 4.08, (d) any repurchase, redemption or
other obligation in respect of Disqualified Stock, (e) any Indebtedness to
any employee of the Company or any of its Subsidiaries, (f) any liability for
taxes owed or owing by the Company or any of its Subsidiaries, (g) any Trade
Payables or (h) the Old Senior Subordinated Notes. Senior Indebtedness will
also include interest accruing subsequent to events of bankruptcy of the
Company and its Subsidiaries at the rate provided for in the document
<PAGE>
16
governing such Senior Indebtedness, whether or not such interest is an
allowed claim enforceable against the debtor in a bankruptcy case under
Bankruptcy Law.
"Senior Subordinated Obligations" means any principal of, premium,
if any, interest, or other amounts due, on the Notes payable pursuant to the
terms of the Notes or upon acceleration, including any amounts received upon
the exercise of rights of rescission or other rights of action (including
claims for damages) or otherwise, to the extent relating to the purchase
price of the Notes or amounts corresponding to such principal, premium, if
any, or interest on the Notes.
"Significant Subsidiary" means, at any date of determination, any
Restricted Subsidiary that, together with its Subsidiaries, (i) for the most
recent fiscal year of the Company, accounted for more than 10% of the
consolidated revenues of the Company and its Restricted Subsidiaries or (ii)
as of the end of such fiscal year, was the owner of more than 10% of the
consolidated assets of the Company and its Restricted Subsidiaries, all as
set forth on the most recently available consolidated financial statements of
the Company for such fiscal year.
"S&P" means Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, and its successors.
"Stated Maturity" means, (i) with respect to any debt security, the
date specified in such debt security as the fixed date on which the final
installment of principal of such debt security is due and payable and (ii)
with respect to any scheduled installment of principal of or interest on any
debt security, the date specified in such debt security as the fixed date on
which such installment is due and payable.
"Subsidiary" means, with respect to any Person, any corporation,
association, business trust or other business entity of which more than 50%
of the voting power of the outstanding Voting Stock is owned, directly or
indirectly, by such Person and one or more other Subsidiaries of such Person.
"Subsidiary Guarantors" means (i) each of the following Wholly
Owned Restricted Subsidiaries of the Company: CP Distribution Co., a Delaware
corporation; CP Wholesale Co., a Delaware corporation; Foodmaker
International Franchising, Inc., a Delaware corporation; and Jack In the Box,
Inc., a New Jersey corporation; and (ii) any other Subsidiary that executes a
Subsidiary Guarantee in accordance with the provisions of this Indenture, and
their respective successors and assigns.
"Temporary Cash Investment" means any of the following: (i) direct
obligations of the United States of America or any agency thereof or
obligations fully and unconditionally guaranteed by the United States of
America or any agency thereof, (ii) time deposit accounts, certificates of
deposit and money market deposits maturing within one year of the date of
acquisition thereof issued by a bank or trust company which is organized
under the laws of the United States of America, any state thereof or any
foreign country recognized by the United States of America, and which bank or
trust company has capital, surplus and undivided profits aggregating in
excess of $50,000,000 (or the foreign currency equivalent thereof) and
(unless such accounts, certificates or deposits are fully insured by the
FDIC) has outstanding debt which is rated "A" (or such similar equivalent
rating) or higher by at least one nationally recognized statistical rating
organization (as defined in Rule 436 under the Securities Act) or any
money-market fund sponsored by a registered broker dealer or mutual fund
<PAGE>
17
distributor, (iii) repurchase obligations with a term of not more than 30
days for underlying securities of the types described in clause (i) above
entered into with a bank meeting the qualifications described in clause (ii)
above, (iv) commercial paper, maturing not more than one year after the date
of acquisition, issued by a corporation (other than an Affiliate of the
Company) organized and in existence under the laws of the United States of
America, any state thereof or any foreign country recognized by the United
States of America with a rating at the time as of which any investment
therein is made of "P-1" (or higher) according to Moody's or "A-1" (or
higher) according to S&P or maturing not more than 90 days after the date of
execution, with a rating at the time of any investment therein of "P-2" (or
higher) according to Moody's or "A-2" (or higher) by S&P, (v) securities with
maturities of one year or less from the date of acquisition issued or fully
and unconditionally guaranteed by any state, commonwealth or territory of the
United States of America, or by any political subdivision or taxing authority
thereof, and rated at least "A" by S&P or Moody's and (vi) other dollar
denominated securities issued by any Person incorporated in the United States
rated at least "A" or the equivalent by S&P or at least "A2" or the
equivalent by Moody's and in each case either (A) maturing not more than one
year after the date of acquisition or (B) which are subject to a repricing
arrangement (such as a Dutch auction) not more than one year after the date
of acquisition (and reprices at least yearly thereafter) which the Person
making the investment believes in good faith will permit such Person to sell
such security at par in connection with such repricing mechanism.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Section 77aaa-
77bbbb) as in effect on the date on which this Indenture is qualified under
the TIA.
"Trade Payables" means, with respect to any Person, any accounts
payable or any other indebtedness or monetary obligation to trade creditors
created, assumed or Guaranteed by such Person or any of its Restricted
Subsidiaries arising in the ordinary course of business in connection with
the acquisition of goods or services, including without limitation,
obligations under (or in respect of) construction contracts (to the extent
such obligations do not constitute Indebtedness for borrowed money).
"Transaction Date" means, with respect to the Incurrence of any
Indebtedness by the Company or any of its Restricted Subsidiaries, the date
such Indebtedness is to be Incurred and, with respect to any Restricted
Payment, the date such Restricted Payment is to be made.
"Transfer Restricted Notes" means securities that bear, or that are
required to bear, the Private Placement Legend.
"Trustee" means the party named as such above until a successor
replaces it in accordance with the applicable provisions of this Indenture
and thereafter means the successor serving hereunder.
"Unrestricted Definitive Note" means one or more Definitive Notes
that do not bear and are not required to bear the Private Placement Legend.
"Unrestricted Global Note" means a permanent global Note in the
form of Exhibit A attached hereto that bears the Global Note Legend and that
has the "Schedule of Exchanges of Interests in the Global Note" attached
thereto, and that is deposited with or on behalf of and registered in the
<PAGE>
18
name of the Depositary, representing a series of Notes that do not bear the
Private Placement Legend.
"Unrestricted Subsidiary" means (i) any Subsidiary of the Company
that at the time of determination shall be designated an Unrestricted
Subsidiary by the Board of Directors in the manner provided below; (ii) any
Subsidiary of an Unrestricted Subsidiary; (iii) the CRC Subsidiaries; and
(iv) the Foreign Subsidiaries. The Board of Directors may designate any
Restricted Subsidiary (including any newly acquired or newly formed
Subsidiary of the Company) to be an Unrestricted Subsidiary unless such
Subsidiary owns any Capital Stock of, or owns or holds any Lien on any
property of, the Company or any Restricted Subsidiary; provided that (A) any
Guarantee by the Company or any Restricted Subsidiary of any Indebtedness of
the Subsidiary being so designated shall be deemed an "Incurrence" of such
Indebtedness and an "Investment" by the Company or such Restricted Subsidiary
(or both, if applicable) at the time of such designation; (B) either (I) the
Subsidiary to be so designated has total assets of $1,000 or less or (II) if
such Subsidiary has assets greater than $1,000, such designation would be
permitted under Section 4.10; and (C) if applicable, the Incurrence of
Indebtedness and the Investment referred to in clause (A) of this proviso
would be permitted under Section 4.07 and Section 4.10. The Board of
Directors may designate any Unrestricted Subsidiary to be a Restricted
Subsidiary; provided that (i) no Default or Event of Default shall have
occurred and be continuing at the time of or after giving effect to such
designation and (ii) all Liens and Indebtedness of such Unrestricted
Subsidiary outstanding immediately after such designation would, if Incurred
at such time, have been permitted to be Incurred (and shall be deemed to have
been Incurred) for all purposes of this Indenture. Any such designation by
the Board of Directors shall be evidenced to the Trustee by promptly filing
with the Trustee a copy of the Board Resolution giving effect to such
designation and an Officers' Certificate certifying that such designation
complied with the foregoing provisions.
"U.S. Person" means a U.S. person as defined in Rule 902(o) under
the Securities Act.
"Voting Stock" means with respect to any Person, Capital Stock of
any class or kind ordinarily having the power to vote for the election of
directors, managers or other voting members of the governing body of such
Person.
"Wholly Owned" means, with respect to any Subsidiary of any Person,
the ownership of all of the outstanding Capital Stock of such Subsidiary
(other than any director's qualifying shares or Investments by foreign
nationals mandated by applicable law) by such Person or one or more Wholly
Owned Subsidiaries of such Person.
Section 1.02 Other Definitions
Defined in
Term Section
---- ----------
"Authentication Order" 2.02
"Bankruptcy Law" 6.01
"Benefitted Party" 10.01
"Company Obligations" 4.01
"Covenant Defeasance" 8.03
<PAGE>
19
"Custodian" 6.01
"DTC" 2.03
"Guarantee Obligations" 10.01
"Legal Defeasance" 8.02
"Paying Agent" 2.03
"Payment Blockage Notice" 11.03
"Payment Date" 1.01
"Payment Default" 6.01
"Registrar" 2.03
"Restricted Payments" 4.10
Section 1.03 Incorporation by Reference of Trust Indenture Act
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"indenture securities" means the Notes;
"indenture security Holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee;
"obligor" on the Notes means the Company and any successor obligor
upon the Notes.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rule
under the TIA have the meanings so assigned to them.
Section 1.04 Rules of Construction
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular;
<PAGE>
20
(5) provisions apply to successive events and transactions; and
(6) references to sections of or rules under the Securities Act
shall be deemed to include substitute, replacement of successor sections
or rules adopted by the Commission from time to time.
ARTICLE 2
THE NOTES
Section 2.01 Form and Dating
(a) General. The Notes and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A hereto. The
Notes may have notations, legends or endorsements required by law, stock
exchange rule or usage. Each Note shall be dated the date of its
authentication. The Notes shall be in denominations of $1,000 and integral
multiples thereof.
The terms and provisions contained in the Notes shall constitute,
and are hereby expressly made, a part of this Indenture and the Company, the
Subsidiary Guarantors and the Trustee, by their execution and delivery of
this Indenture, expressly agree to such terms and provisions and to be bound
thereby. However, to the extent any provision of any Note conflicts with the
express provisions of this Indenture, the provisions of this Indenture shall
govern and be controlling.
(b) Global Notes. Notes issued in global form shall be
substantially in the form of Exhibit A attached hereto (including the Global
Note Legend thereon and the "Schedule of Exchanges of Interests in the Global
Note" attached thereto). Notes issued in definitive form shall be
substantially in the form of Exhibit A attached hereto (but without the
Global Note Legend thereon and without the "Schedule of Exchanges of
Interests in the Global Note" attached thereto). Each Global Note shall
represent such of the outstanding Notes as shall be specified therein and
each shall provide that it shall represent the aggregate principal amount of
outstanding Notes from time to time endorsed thereon and that the aggregate
principal amount of outstanding Notes represented thereby may from time to
time be reduced or increased, as appropriate, to reflect exchanges and
redemptions. Any endorsement of a Global Note to reflect the amount of any
increase or decrease in the aggregate principal amount of outstanding Notes
represented thereby shall be made by the Trustee or the Notes Custodian, at
the direction of the Trustee, in accordance with instructions given by the
Holder thereof as required by Section 2.06 hereof.
(c) Euroclear and Cedel Procedures Applicable. The provisions of
the "Operating Procedures of the Euroclear System" and "Terms and Conditions
Governing Use of Euroclear" and the "General Terms and Conditions of Cedel
Bank" and "Customer Handbook" of Cedel Bank shall be applicable to transfers
of beneficial interests in the Regulation S Global Notes that are held by
Participants through Euroclear or Cedel Bank.
Section 2.02 Execution and Authentication
An Officer shall sign the Notes for the Company by manual or
facsimile signature. The Company's seal shall be reproduced on the Notes and
may be in facsimile form. If an Officer whose signature is on a Note no
longer holds that office at the time a Note is authenticated, the Note shall
<PAGE>
21
nevertheless be valid. A Note shall not be valid until authenticated by the
manual signature of the Trustee. The signature shall be conclusive evidence
that the Note has been authenticated under this Indenture. The Trustee
shall, upon a written order of the Company signed by an Officer (an
"Authentication Order"), authenticate Notes for original issue up to the
aggregate principal amount stated in such Authentication Order. The
aggregate principal amount of Notes outstanding at any time may not exceed
such amount except as provided in Section 2.07 hereof. The Trustee may
appoint an authenticating agent acceptable to the Company to authenticate
Notes. An authenticating agent may authenticate Notes whenever the Trustee
may do so. Each reference in this Indenture to authentication by the Trustee
includes authentication by such agent. An authenticating agent has the same
rights as an Agent to deal with Holders or an Affiliate of the Company.
Section 2.03 Registrar and Paying Agent
The Company shall maintain an office or agency where Notes may be
presented for registration of transfer or for exchange ("Registrar") and an
office or agency where Notes may be presented for payment ("Paying Agent").
The Registrar shall keep a register of the Notes and of their transfer and
exchange. The Company may appoint one or more co-registrars and one or more
additional paying agents. The term "Registrar" includes any co-registrar and
the term "Paying Agent" includes any additional paying agent. The Company
may change any Paying Agent or Registrar without notice to any Holder. The
Company shall notify the Trustee in writing of the name and address of any
Agent not a party to this Indenture. If the Company fails to appoint or
maintain another entity as Registrar or Paying Agent, the Trustee shall act
as such. The Company or any of its Subsidiaries may act as Paying Agent or
Registrar. The Company initially appoints The Depository Trust Company
("DTC") to act as Depositary with respect to the Global Notes. The Company
initially appoints the Trustee to act as the Registrar and Paying Agent and
to act as Notes Custodian with respect to the Global Notes.
Section 2.04 Paying Agent to Hold Money in Trust
The Company shall require each Paying Agent other than the Trustee
to agree in writing that the Paying Agent will hold in trust for the benefit
of Holders or the Trustee all money held by the Paying Agent for the payment
of principal, premium or Additional Interest, if any, or interest on the
Notes, and will notify the Trustee of any default by the Company in making
any such payment. While any such default continues, the Trustee may require
a Paying Agent to pay all money held by it to the Trustee. The Company at
any time may require a Paying Agent to pay all money held by it to the
Trustee. Upon payment over to the Trustee, the Paying Agent (if other than
the Company or a Subsidiary) shall have no further liability for the money.
If the Company or a Subsidiary acts as Paying Agent, it shall segregate and
hold in a separate trust fund for the benefit of the Holders all money held
by it as Paying Agent. Upon any bankruptcy or reorganization proceedings
relating to the Company, the Trustee shall serve as Paying Agent for the
Notes.
Section 2.05 Holder Lists
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses
of all Holders and shall otherwise comply with TIA Section 312(a). If the
Trustee is not the Registrar, the Company shall furnish to the Trustee at least
seven Business Days before each interest payment date and at such other times as
the Trustee may request in writing, a list in such form and as of such date
<PAGE>
22
as the Trustee may reasonably require of the names and addresses of the
Holders of Notes and the Company shall otherwise comply with TIA Section 312(a).
Section 2.06 Transfer and Exchange
(a) Transfer and Exchange of Global Notes. A Global Note may not
be transferred as a whole except by the Depositary to a nominee of the
Depositary, by a nominee of the Depositary to the Depositary or to another
nominee of the Depositary, or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary. All Global
Notes will be exchanged by the Company for Definitive Notes if (i) the
Company delivers to the Trustee notice from the Depositary that it is
unwilling or unable to continue to act as Depositary or that it is no longer
a clearing agency registered under the Exchange Act and, in either case, a
successor Depositary is not appointed by the Company within 120 days after
the date of such notice from the Depositary, (ii) the Company in its sole
discretion determines that the Global Notes (in whole but not in part) should
be exchanged for Definitive Notes and delivers a written notice to such
effect to the Trustee or (iii) upon request of the Trustee or any Holders if
there shall have occurred and be continuing a Default or Event of Default
with respect to the Notes. Upon the occurrence of any of the preceding
events in (i), (ii) or (iii) above, Definitive Notes shall be issued in such
names as the Depositary shall instruct the Trustee. Global Notes also may be
exchanged or replaced, in whole or in part, as provided in Sections 2.07 and
2.10 hereof. Every Note authenticated and delivered in exchange for, or in
lieu of, a Global Note or any portion thereof, pursuant to this Section 2.06
or Section 2.07 or 2.10 hereof, shall be authenticated and delivered in the
form of, and shall be, a Global Note. A Global Note may not be exchanged for
another Note other than as provided in this Section 2.06(a), however,
beneficial interests in a Global Note may be transferred and exchanged as
provided in Section 2.06(b), (c) or (f) hereof.
(b) Transfer and Exchange of Beneficial Interests in the Global
Notes. The transfer and exchange of beneficial interests in the Global Notes
shall be effected through the Depositary, in accordance with the provisions
of this Indenture and the Applicable Procedures. Beneficial interests in the
Restricted Global Notes shall be subject to restrictions on transfer
comparable to those set forth herein to the extent required by the Securities
Act. Transfers of beneficial interests in the Global Notes also shall
require compliance with either subparagraph (i) or (ii) below, as applicable,
as well as one or more of the other following subparagraphs, as applicable:
(i) Transfer of Beneficial Interests in the Same Global Note.
Beneficial interests in any Restricted Global Note may be transferred to
Persons who take delivery thereof in the form of a beneficial interest in the
same Restricted Global Note in accordance with the transfer restrictions set
forth in the Private Placement Legend; provided, however, that prior to the
expiration of the Restricted Period, transfers of beneficial interests in the
Regulation S Global Note may not be made to a U.S. Person or for the account
or benefit of a U.S. Person (other than a Placement Agent). Beneficial
interests in any Unrestricted Global Note may be transferred to Persons who
take delivery thereof in the form of a beneficial interest in an Unrestricted
Global Note. No written orders or instructions shall be required to be
delivered to the Registrar to effect the transfers described in this Section
2.06(b)(i).
(ii) All Other Transfers and Exchanges of Beneficial
Interests in Global Notes. In connection with all transfers and exchanges of
beneficial interests that are not subject to Section 2.06(b)(i) above, the
transferor of such beneficial interest must deliver to the Registrar either
<PAGE>
23
(A) (1) a written order from a Participant or an Indirect Participant given
to the Depositary in accordance with the Applicable Procedures directing the
Depositary to credit or cause to be credited a beneficial interest in another
Global Note in an amount equal to the beneficial interest to be transferred
or exchanged and (2) instructions given in accordance with the Applicable
Procedures containing information regarding the Participant account to be
credited with such increase or (B) (1) a written order from a Participant or
an Indirect Participant given to the Depositary in accordance with the
Applicable Procedures directing the Depositary to cause to be issued a
Definitive Note in an amount equal to the beneficial interest to be
transferred or exchanged and (2) instructions given by the Depositary to the
Registrar containing information regarding the Person in whose name such
Definitive Note shall be registered to effect the transfer or exchange
referred to in (B)(1) above. Upon consummation of an Exchange Offer by the
Company in accordance with Section 2.06(f) hereof, the requirements of this
Section 2.06(b)(ii) shall be deemed to have been satisfied upon receipt by
the Registrar of the instructions contained in the Letter of Transmittal
delivered by the Holder of such beneficial interests in the Restricted Global
Notes. Upon satisfaction of all of the requirements for transfer or exchange
of beneficial interests in Global Notes contained in this Indenture and the
Notes or otherwise applicable under the Securities Act, the Trustee shall
adjust the principal amount of the relevant Global Note(s) pursuant to
Section 2.06(h) hereof.
(iii) Transfer of Beneficial Interests to Another Restricted
Global Note. A beneficial interest in any Restricted Global Note may be
transferred to a Person who takes delivery thereof in the form of a
beneficial interest in another Restricted Global Note if the transfer
complies with the requirements of Section 2.06(b)(ii) above and the Registrar
receives the following:
(A) if the transferee will take delivery in the form of
a beneficial interest in the 144A Global Note, then the transferor must
deliver a certificate in the form of Exhibit B hereto, including the
certifications in item (1) thereof; and
(B) if the transferee will take delivery in the form of
a beneficial interest in the Regulation S Global Note, then the
transferor must deliver a certificate in the form of Exhibit B hereto,
including the certifications in item (2) thereof.
(iv) Transfer and Exchange of Beneficial Interests in a
Restricted Global Note for Beneficial Interests in the Unrestricted Global
Note. A beneficial interest in any Restricted Global Note may be exchanged
by any holder thereof for a beneficial interest in an Unrestricted Global
Note or transferred to a Person who takes delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note if the exchange or
transfer complies with the requirements of Section 2.06(b)(ii) above and:
(A) such exchange or transfer is effected pursuant to
the Exchange Offer in accordance with the Registration Rights Agreement
and the holder of the beneficial interest to be transferred, in the case
of an exchange, or the transferee, in the case of a transfer, certifies
in the applicable Letter of Transmittal that it is not (1) a broker-
dealer, (2) a Person participating in the distribution of the Exchange
Notes or (3) a Person who is an affiliate (as defined in Rule 144) of
the Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
<PAGE>
24
(C) such transfer is effected by a Participating Broker-
Dealer pursuant to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following: (1) if the
holder of such beneficial interest in a Restricted Global Note proposes
to exchange such beneficial interest for a beneficial interest in an
Unrestricted Global Note, a certificate from such holder in the form of
Exhibit C hereto, including the certifications in item (1)(a) thereof;
or (2) if the holder of such beneficial interest in a Restricted Global
Note proposes to transfer such beneficial interest to a Person who shall
take delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note, a certificate from such holder in the form of
Exhibit B hereto, including the certifications in item (4) thereof; and,
in each such case set forth in this subparagraph (D), an Opinion of
Counsel in form reasonably acceptable to the Registrar and the Company
to the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained herein
and in the Private Placement Legend are no longer required in order to
maintain compliance with the Securities Act.
If any such transfer is effected pursuant to subparagraph (B) or
(D) above at a time when an Unrestricted Global Note has not yet been issued,
the Company shall issue and, upon receipt of an Authentication Order in
accordance with Section 2.02 hereof, the Trustee shall authenticate one or
more Unrestricted Global Notes in an aggregate principal amount equal to the
aggregate principal amount of beneficial interests transferred pursuant to
subparagraph (B) or (D) above. Beneficial interests in an Unrestricted
Global Note cannot be exchanged for, or transferred to Persons who take
delivery thereof in the form of, a beneficial interest in a Restricted Global
Note.
(c) Transfer or Exchange of Beneficial Interests for Definitive
Notes.
(i) Beneficial Interests in Restricted Global Notes to
Restricted Definitive Notes. If any holder of a beneficial interest in a
Restricted Global Note proposes to exchange such beneficial interest for a
Restricted Definitive Note or to transfer such beneficial interest to a
Person who takes delivery thereof in the form of a Restricted Definitive
Note, then, upon receipt by the Registrar of the following documentation:
(A) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial interest for
a Restricted Definitive Note, a certificate from such holder in the form
of Exhibit C hereto, including the certifications in item (2)(a)
thereof;
(B) if such beneficial interest is being transferred to
a QIB in accordance with Rule 144A under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (1) thereof;
(C) if such beneficial interest is being transferred to
a Non-U.S. Person in an offshore transaction in accordance with Rule 903
or Rule 904 under the Securities Act, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item (2)
thereof;
<PAGE>
25
(D) if such beneficial interest is being transferred
pursuant to an exemption from the registration requirements of the
Securities Act in accordance with Rule 144 under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (3)(a) thereof;
(E) if such beneficial interest is being transferred to
an Institutional Accredited Investor in reliance on an exemption from
the registration requirements of the Securities Act other than those
listed in subparagraphs (B) through (D) above, a certificate to the
effect set forth in Exhibit B hereto, including the certifications,
certificates and Opinion of Counsel required by item (3) thereof, if
applicable;
(F) if such beneficial interest is being transferred to
the Company or any of its Subsidiaries, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item (3)(b)
thereof; or
(G) if such beneficial interest is being transferred
pursuant to an effective registration statement under the Securities
Act, a certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (3)(c) thereof,
the Trustee shall cause the aggregate principal amount of the applicable
Restricted Global Note to be reduced accordingly pursuant to Section 2.06(h)
hereof, and the Company shall execute and, upon receipt of an Authentication
Order pursuant to Section 2.02, the Trustee shall authenticate and deliver to
the Person designated in the instructions a Restricted Definitive Note in the
appropriate principal amount. Any Restricted Definitive Note issued in
exchange for a beneficial interest in a Restricted Global Note pursuant to
this Section 2.06(c) shall be registered in such name or names and in such
authorized denomination or denominations as the holder of such beneficial
interest shall instruct the Registrar through instructions from the
Depositary and the Participant or Indirect Participant. The Trustee shall
deliver such Restricted Definitive Notes to the Persons in whose names such
Notes are so registered. Any Restricted Definitive Note issued in exchange
for a beneficial interest in a Restricted Global Note pursuant to this
Section 2.06(c)(i) shall bear the Private Placement Legend and shall be
subject to all restrictions on transfer contained therein.
(ii) Beneficial Interests in Restricted Global Notes to
Unrestricted Definitive Notes. A holder of a beneficial interest in a
Restricted Global Note may exchange such beneficial interest for an
Unrestricted Definitive Note or may transfer such beneficial interest to a
Person who takes delivery thereof in the form of an Unrestricted Definitive
Note only if:
(A) such exchange or transfer is effected pursuant to
the Exchange Offer in accordance with the Registration Rights Agreement
and the holder of such beneficial interest, in the case of an exchange,
or the transferee, in the case of a transfer, certifies in the
applicable Letter of Transmittal that it is not (1) a broker-dealer, (2)
a Person participating in the distribution of the Exchange Notes or (3)
a Person who is an affiliate (as defined in Rule 144) of the Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
<PAGE>
26
(C) such transfer is effected by a Participating Broker-
Dealer pursuant to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following: (1) if the
holder of such beneficial interest in a Restricted Global Note proposes
to exchange such beneficial interest for a Definitive Note that does not
bear the Private Placement Legend, a certificate from such holder in the
form of Exhibit C hereto, including the certifications in item (1)(b)
thereof; or (2) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial interest to
a Person who shall take delivery thereof in the form of a Definitive
Note that does not bear the Private Placement Legend, a certificate from
such holder in the form of Exhibit B hereto, including the
certifications in item (4) thereof; and, in each such case set forth in
this subparagraph (D), an Opinion of Counsel in form reasonably
acceptable to the Registrar and the Company to the effect that such
exchange or transfer is in compliance with the Securities Act and that
the restrictions on transfer contained herein and in the Private
Placement Legend are no longer required in order to maintain compliance
with the Securities Act.
(iii) Beneficial Interests in Unrestricted Global Notes to
Unrestricted Definitive Notes. If any holder of a beneficial interest in an
Unrestricted Global Note proposes to exchange such beneficial interest for an
Unrestricted Definitive Note or to transfer such beneficial interest to a
Person who takes delivery thereof in the form of an Unrestricted Definitive
Note, then, upon satisfaction of the conditions set forth in Section
2.06(b)(ii) hereof, the Trustee shall cause the aggregate principal amount of
the applicable Unrestricted Global Note to be reduced accordingly pursuant to
Section 2.06(h) hereof, and the Company shall execute and, upon receipt of an
Authentication Order pursuant to Section 2.02, the Trustee shall authenticate
and deliver to the Person designated in the instructions an Unrestricted
Definitive Note in the appropriate principal amount. Any Unrestricted
Definitive Note issued in exchange for a beneficial interest pursuant to this
Section 2.06(c)(iii) shall be registered in such name or names and in such
authorized denomination or denominations as the holder of such beneficial
interest shall instruct the Registrar through instructions from the
Depositary and the Participant or Indirect Participant. The Trustee shall
deliver such Unrestricted Definitive Notes to the Persons in whose names such
Notes are so registered. Any Unrestricted Definitive Note issued in exchange
for a beneficial interest pursuant to this Section 2.06(c)(iii) shall not
bear the Private Placement Legend.
(d) Transfer and Exchange of Definitive Notes for Beneficial
Interests.
(i) Restricted Definitive Notes to Beneficial Interests in
Restricted Global Notes. If any Holder of a Restricted Definitive Note
proposes to exchange such Note for a beneficial interest in a Restricted
Global Note or to transfer such Restricted Definitive Notes to a Person who
takes delivery thereof in the form of a beneficial interest in a Restricted
Global Note, then, upon receipt by the Registrar of the following
documentation:
(A) if the Holder of such Restricted Definitive Note
proposes to exchange such Note for a beneficial interest in a Restricted
Global Note, a certificate from such Holder in the form of Exhibit C
hereto, including the certifications in item (2)(b) thereof;
<PAGE>
27
(B) if such Restricted Definitive Note is being
transferred to a QIB in accordance with Rule 144A under the Securities
Act, a certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (1) thereof; or
(C) if such Restricted Definitive Note is being
transferred to a Non-U.S. Person in an offshore transaction in
accordance with Rule 903 or Rule 904 under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (2) thereof,
the Trustee shall cancel the Restricted Definitive Note, increase or cause to
be increased the aggregate principal amount of, in the case of clause (A)
above, the appropriate Restricted Global Note, in the case of clause (B)
above, the 144A Global Note, and in the case of clause (C) above, the
Regulation S Global Note.
(ii) Restricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of a Restricted Definitive Note may
exchange such Note for a beneficial interest in an Unrestricted Global Note
or transfer such Restricted Definitive Note to a Person who takes delivery
thereof in the form of a beneficial interest in an Unrestricted Global Note
only if:
(A) such exchange or transfer is effected pursuant to
the Exchange Offer in accordance with the Registration Rights Agreement
and the Holder, in the case of an exchange, or the transferee, in the
case of a transfer, certifies in the applicable Letter of Transmittal
that it is not (1) a broker-dealer, (2) a Person participating in the
distribution of the Exchange Notes or (3) a Person who is an affiliate
(as defined in Rule 144) of the Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) such transfer is effected by a Participating Broker-
Dealer pursuant to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following: (1) if the
Holder of such Restricted Definitive Notes proposes to exchange such
Notes for a beneficial interest in the Unrestricted Global Note, a
certificate from such Holder in the form of Exhibit C hereto, including
the certifications in item (1)(c) thereof; or (2) if the Holder of such
Restricted Definitive Notes proposes to transfer such Notes to a Person
who shall take delivery thereof in the form of a beneficial interest in
the Unrestricted Global Note, a certificate from such Holder in the form
of Exhibit B hereto, including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), an Opinion of
Counsel in form reasonably acceptable to the Registrar and the Company
to the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained herein
and in the Private Placement Legend are no longer required in order to
maintain compliance with the Securities Act. Upon satisfaction of the
conditions of any of the subparagraphs in this Section 2.06(d)(ii), the
Trustee shall cancel the Restricted Definitive Notes so transferred or
exchanged and increase or cause to be increased the aggregate principal
amount of the Unrestricted Global Note.
<PAGE>
28
(iii) Unrestricted Definitive Notes to Beneficial Interests
in Unrestricted Global Notes. A Holder of an Unrestricted Definitive Note
may exchange such Note for a beneficial interest in an Unrestricted Global
Note or transfer such Definitive Notes to a Person who takes delivery thereof
in the form of a beneficial interest in an Unrestricted Global Note at any
time. Upon receipt of a request for such an exchange or transfer, the
Trustee shall cancel the applicable Unrestricted Definitive Note and increase
or cause to be increased the aggregate principal amount of one of the
Unrestricted Global Notes. If any such exchange or transfer from a Definitive
Note to a beneficial interest is effected pursuant to subparagraphs (ii)(B),
(ii)(D) or (iii) above at a time when an Unrestricted Global Note has not yet
been issued, the Company shall issue and, upon receipt of an Authentication
Order in accordance with Section 2.02 hereof, the Trustee shall authenticate
one or more Unrestricted Global Notes in an aggregate principal amount equal
to the principal amount of Definitive Notes so transferred.
(e) Transfer and Exchange of Definitive Notes for Definitive
Notes. Upon request by a Holder of Definitive Notes and such Holder's
compliance with the provisions of this Section 2.06(e), the Registrar shall
register the transfer or exchange of Definitive Notes. Prior to such
registration of transfer or exchange, the requesting Holder shall present or
surrender to the Registrar the Definitive Notes duly endorsed or accompanied
by a written instruction of transfer in form satisfactory to the Registrar
duly executed by such Holder or by its attorney, duly authorized in writing.
In addition, the requesting Holder shall provide any additional
certifications, documents and information, as applicable, required pursuant
to the following provisions of this Section 2.06(e).
(i) Restricted Definitive Notes to Restricted Definitive
Notes. Any Restricted Definitive Note may be transferred to and registered
in the name of Persons who take delivery thereof in the form of a Restricted
Definitive Note if the Registrar receives the following:
(A) if the transfer will be made pursuant to Rule 144A
under the Securities Act, then the transferor must deliver a certificate
in the form of Exhibit B hereto, including the certifications in item
(1) thereof;
(B) if the transfer will be made pursuant to Rule 903 or
Rule 904, then the transferor must deliver a certificate in the form of
Exhibit B hereto, including the certifications in item (2) thereof; and
(C) if the transfer will be made pursuant to any other
exemption from the registration requirements of the Securities Act, then
the transferor must deliver a certificate in the form of Exhibit B
hereto, including the certifications, certificates and Opinion of
Counsel required by item (3) thereof, if applicable.
(ii) Restricted Definitive Notes to Unrestricted Definitive
Notes. Any Restricted Definitive Note may be exchanged by the Holder thereof
for an Unrestricted Definitive Note or transferred to a Person or Persons who
take delivery thereof in the form of an Unrestricted Definitive Note if:
(A) such exchange or transfer is effected pursuant to
the Exchange Offer in accordance with the Registration Rights Agreement
and the Holder, in the case of an exchange, or the transferee, in the
case of a transfer, certifies in the applicable Letter of Transmittal
that it is not (1) a broker-dealer, (2) a Person participating in the
<PAGE>
29
distribution of the Exchange Notes or (3) a Person who is an affiliate
(as defined in Rule 144) of the Company;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) any such transfer is effected by a Participating
Broker-Dealer pursuant to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following: (1) if the
Holder of such Restricted Definitive Notes proposes to exchange such
Notes for an Unrestricted Definitive Note, a certificate from such
Holder in the form of Exhibit C hereto, including the certifications in
item (1)(d) thereof; or (2) if the Holder of such Restricted Definitive
Notes proposes to transfer such Notes to a Person who shall take
delivery thereof in the form of an Unrestricted Definitive Note, a
certificate from such Holder in the form of Exhibit B hereto, including
the certifications in item (4) thereof; and, in each such case set forth
in this subparagraph (D), an Opinion of Counsel in form reasonably
acceptable to the the Registrar and the Company to the effect that such
exchange or transfer is in compliance with the Securities Act and that
the restrictions on transfer contained herein and in the Private
Placement Legend are no longer required in order to maintain compliance
with the Securities Act.
(iii) Unrestricted Definitive Notes to Unrestricted
Definitive Notes. A Holder of Unrestricted Definitive Notes may transfer
such Notes to a Person who takes delivery thereof in the form of an
Unrestricted Definitive Note. Upon receipt of a request to register such a
transfer, the Registrar shall register the Unrestricted Definitive Notes
pursuant to the instructions from the Holder thereof.
(f) Exchange Offer. Upon the occurrence of the Exchange Offer in
accordance with the Registration Rights Agreement, the Company shall issue
and, upon receipt of an Authentication Order in accordance with Section 2.02,
the Trustee shall authenticate (i) one or more Unrestricted Global Notes in
an aggregate principal amount equal to the sum of (A) the principal amount of
the beneficial interests in the Restricted Global Notes tendered for
acceptance by Persons that certify in the applicable Letters of Transmittal
that (x) they are not broker-dealers, (y) they are not participating in a
distribution of the Exchange Notes and (z) they are not affiliates (as
defined in Rule 144) of the Company, and accepted for exchange in the
Exchange Offer and (B) the principal amount of Definitive Notes exchanged or
transferred for beneficial interests in Unrestricted Global Notes in
connection with the Exchange Offer pursuant to Section 2.06(d)(ii) and (ii)
Definitive Notes in an aggregate principal amount equal to the principal
amount of the Restricted Definitive Notes accepted for exchange in the
Exchange Offer (other than Definitive Notes described in clause (i)(B)
immediately above). Concurrently with the issuance of such Notes, the
Trustee shall cause the aggregate principal amount of the applicable
Restricted Global Notes to be reduced accordingly, and the Company shall
execute and, upon receipt of an Authentication Order pursuant to Section
2.02, the Trustee shall authenticate and deliver to the Persons designated by
the Holders of Definitive Notes so accepted Definitive Notes in the
appropriate principal amount.
<PAGE>
30
(g) Legends. The following legends shall appear on the face of
all Global Notes and Definitive Notes issued under this Indenture unless
specifically stated otherwise in the applicable provisions of this Indenture.
(i) Private Placement Legend.
(A) Except as permitted by subparagraph (B) below, each
Global Note and each Definitive Note (and all Notes issued in exchange
therefor or substitution thereof) shall bear the legend in substantially
the following form:
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND ACCORDINGLY, MAY NOT
BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE
ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE
FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1)
REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS NOT
A U.S. PERSON AND IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION
IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT, OR (C)
IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE
501(a)(1), (2), (3), OR (7) OF REGULATION D UNDER THE SECURITIES ACT)
(AN "INSTITUTIONAL ACCREDITED INVESTOR"), (2) AGREES THAT IT WILL
NOT, WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THE NOTES,
RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO THE COMPANY
OR ANY SUBSIDIARY THEREOF, (B) TO A QUALIFIED INSTITUTIONAL BUYER
IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) OUTSIDE
THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH
RULE 904 UNDER THE SECURITIES ACT, (D) PURSUANT TO THE EXEMPTION
FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT
(IF AVAILABLE), (E) INSIDE THE UNITED STATES TO AN INSTITUTIONAL
ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO
THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS
AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS
NOTE (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE)
AND IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT
OF NOTES OF LESS THAN $100,000, AN OPINION OF COUNSEL
ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE
WITH THE SECURITIES ACT, OR (F) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, AND (3) AGREES
THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
IN CONNECTION WITH ANY TRANSFER OF THIS NOTE WITHIN TWO YEARS
AFTER THE ORIGINAL ISSUANCE OF THE NOTES, THE HOLDER MUST CHECK
THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO
THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE
TRUSTEE. IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED
INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE
TRUSTEE AND THE COMPANY SUCH CERTIFICATIONS, LEGAL OPINIONS, OR
<PAGE>
31
OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO
CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN,
THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES," AND "U.S.
PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER
THE SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING
THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN
VIOLATION OF THE FOREGOING RESTRICTIONS.
(B) Notwithstanding the foregoing, any Global Note or
Definitive Note issued pursuant to subparagraphs (b)(iv), (c)(ii),
(c)(iii), (d)(ii), (d)(iii), (e)(ii), (e)(iii) or (f) to this Section
2.06 (and all Notes issued in exchange therefor or substitution thereof)
shall not bear the Private Placement Legend.
(ii) Global Note Legend. Each Global Note shall bear a legend
in substantially the following form:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE
BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER
ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS
HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.06 OF THE INDENTURE,
(II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT
TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE
DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF
THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A
SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY."
(h) Cancellation and/or Adjustment of Global Notes. At such time
as all beneficial interests in a particular Global Note have been exchanged
for Definitive Notes or a particular Global Note has been redeemed,
repurchased or cancelled in whole and not in part, each such Global Note
shall be returned to or retained and cancelled by the Trustee in accordance
with Section 2.11 hereof. At any time prior to such cancellation, if any
beneficial interest in a Global Note is exchanged for or transferred to a
Person who will take delivery thereof in the form of a beneficial interest in
another Global Note or for Definitive Notes, the principal amount of Notes
represented by such Global Note shall be reduced accordingly and an
endorsement shall be made on such Global Note by the Trustee or by the
Depositary at the direction of the Trustee to reflect such reduction; and if
the beneficial interest is being exchanged for or transferred to a Person who
will take delivery thereof in the form of a beneficial interest in another
Global Note, such other Global Note shall be increased accordingly and an
endorsement shall be made on such Global Note by the Trustee or by the
Depositary at the direction of the Trustee to reflect such increase.
(i) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate Global Notes and
Definitive Notes upon receipt of an Authentication Order.
<PAGE>
32
(ii) No service charge shall be made to a holder of a
beneficial interest in a Global Note or to a Holder of a Definitive Note for
any registration of transfer or exchange, but the Company may require payment
of a sum sufficient to cover any transfer tax or similar governmental charge
payable in connection therewith (other than any such transfer taxes or
similar governmental charge payable upon exchange or transfer pursuant to
Sections 2.10, 3.06, 4.15 and 4.16 hereof).
(iii) The Registrar shall not be required to register the
transfer of or exchange any Note selected for redemption in whole or in part,
except the unredeemed portion of any Note being redeemed in part.
(iv) All Global Notes and Definitive Notes issued upon any
registration of transfer or exchange of Global Notes or Definitive Notes
shall be the valid obligations of the Company, evidencing the same
Indebtedness, and entitled to the same benefits under this Indenture, as the
Global Notes or Definitive Notes surrendered upon such registration of
transfer or exchange.
(v) The Company shall not be required (A) to issue, to
register the transfer of or to exchange any Notes during a period beginning
at the opening of business 15 days before the day of any selection of Notes
for redemption under Section 3.02 hereof and ending at the close of business
on the day of selection, (B) to register the transfer of or to exchange any
Note so selected for redemption in whole or in part, except the unredeemed
portion of any Note being redeemed in part or (c) to register the transfer of
or to exchange a Note between a record date and the next succeeding interest
payment date.
(vi) Prior to due presentment for the registration of a
transfer of any Note, the Trustee, any Agent and the Company may deem and
treat the Person in whose name any Note is registered as the absolute owner
of such Note for the purpose of receiving payment of principal of and
interest on such Notes and for all other purposes, and none of the Trustee,
any Agent or the Company shall be affected by notice to the contrary.
(vii) The Trustee shall authenticate Global Notes and
Definitive Notes in accordance with the provisions of Section 2.02 hereof.
(viii) All certifications, certificates and Opinions of
Counsel required to be submitted to the Registrar pursuant to this Section
2.06 to effect a registration of transfer or exchange may be submitted by
facsimile.
Section 2.07 Replacement Notes
If any mutilated Note is surrendered to the Trustee or the Company
and the Trustee receives evidence to its satisfaction of the destruction,
loss or theft of any Note, the Company shall issue and the Trustee, upon
receipt of an Authentication Order, shall authenticate a replacement Note if
the Trustee's requirements are met. If required by the Trustee or the
Company, an indemnity bond must be supplied by the Holder that is sufficient
in the judgment of the Trustee and the Company to protect the Company, the
Trustee, any Agent and any authenticating agent from any loss that any of
them may suffer if a Note is replaced. The Company may charge for its
expenses in replacing a Note. Every replacement Note is an additional
obligation of the Company and shall be entitled to all of the benefits of
this Indenture equally and proportionately with all other Notes duly issued
hereunder.
<PAGE>
33
Section 2.08 Outstanding Notes
The Notes outstanding at any time are all the Notes authenticated
by the Trustee except for those cancelled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Note effected by
the Trustee in accordance with the provisions hereof, and those described in
this Section as not outstanding. Except as set forth in Section 2.09 hereof,
a Note does not cease to be outstanding because the Company or an Affiliate
of the Company holds the Note. If a Note is replaced pursuant to Section
2.07 hereof, it ceases to be outstanding unless the Trustee receives proof
satisfactory to it that the replaced Note is held by a bona fide purchaser.
If the principal amount of any Note is considered paid under Section 4.01
hereof, it ceases to be outstanding and interest on it ceases to accrue. If
the Paying Agent (other than the Company, a Subsidiary or an Affiliate of any
thereof) holds, on a redemption date or the maturity date, money sufficient
to pay Notes payable on that date, then on and after that date such Notes
shall be deemed to be no longer outstanding and shall cease to accrue
interest.
Section 2.09 Treasury Notes
In determining whether the Holders of the required principal amount
of Notes have concurred in any direction, waiver or consent, Notes owned by
the Company, or by any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company,
shall be considered as though not outstanding, except that for the purposes
of determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Notes that the Trustee knows are so owned
shall be so disregarded.
Section 2.10 Temporary Notes
Until certificates representing Notes are ready for delivery, the
Company may prepare and the Trustee, upon receipt of an Authentication Order,
shall authenticate temporary Notes. Temporary Notes shall be substantially
in the form of certificated Notes but may have variations that the Company
considers appropriate for temporary Notes and as shall be reasonably
acceptable to the Trustee. Without unreasonable delay, the Company shall
prepare and the Trustee shall authenticate definitive Notes in exchange for
temporary Notes. Holders of temporary Notes shall be entitled to all of the
benefits of this Indenture.
Section 2.11 Cancellation
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee
any Notes surrendered to them for registration of transfer, exchange or
payment. The Trustee and no one else shall cancel all Notes surrendered for
registration of transfer, exchange, payment, replacement or cancellation and
shall destroy cancelled Notes (subject to the record retention requirement of
the Exchange Act). Certification of the destruction of all cancelled Notes
shall be delivered to the Company. The Company may not issue new Notes to
replace Notes that it has paid or that have been delivered to the Trustee for
cancellation.
<PAGE>
34
Section 2.12 Defaulted Interest
If the Company defaults in a payment of interest on the Notes, it
shall pay the defaulted interest in any lawful manner plus, to the extent
lawful, interest payable on the defaulted interest, to the Persons who are
Holders on a subsequent special record date, in each case at the rate
provided in the Notes and in Section 4.01 hereof. The Company shall notify
the Trustee in writing of the amount of defaulted interest proposed to be
paid on each Note and the date of the proposed payment. The Company shall
fix or cause to be fixed each such special record date and payment date;
provided that no such special record date shall be less than 10 days prior to
the related payment date for such defaulted interest. At least 15 days
before the special record date, the Company (or, upon the written request of
the Company, the Trustee in the name and at the expense of the Company) shall
mail or cause to be mailed to Holders a notice that states the special record
date, the related payment date and the amount of such interest to be paid.
ARTICLE 3
REDEMPTION
Section 3.01 Notices to Trustee
If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, it shall furnish to the
Trustee, at least 45 days (unless a shorter period is acceptable to the
Trustee) but not more than 60 days before a redemption date, an Officers'
Certificate setting forth (i) the clause of this Indenture pursuant to which
the redemption shall occur, (ii) the redemption date, (iii) the principal
amount of Notes to be redeemed and (iv) the redemption price.
Section 3.02 Selection of Notes to Be Redeemed
If less than all of the Notes are to be redeemed at any time, the
Trustee shall select the Notes to be redeemed among the Holders of the Notes
in compliance with the requirements of the principal national securities
exchange, if any, on which the Notes are listed or, if the Notes are not so
listed, on a pro rata basis, by lot or in accordance with any other method
the Trustee considers fair and appropriate. In the event of partial
redemption by lot, the particular Notes to be redeemed shall be selected,
unless otherwise provided herein, not less than 30 nor more than 60 days
prior to the redemption date by the Trustee from the outstanding Notes not
previously called for redemption.
The Trustee shall promptly notify the Company in writing of the
Notes selected for redemption and, in the case of any Note selected for
partial redemption, the principal amount thereof to be redeemed. Notes and
portions of Notes selected shall be in amounts of $1,000 or integral
multiples of $1,000; except that if all of the Notes of a Holder are to be
redeemed, the entire outstanding amount of Notes held by such Holder, even if
not an integral multiple of $1,000, shall be redeemed. Except as provided in
the preceding sentence, provisions of this Indenture that apply to Notes
called for redemption also apply to portions of Notes called for redemption.
<PAGE>
35
Section 3.03 Notice of Redemption
At least 30 days but not more than 60 days before a redemption
date, the Company shall mail or cause to be mailed, by first class mail, a
notice of redemption to each Holder whose Notes are to be redeemed at its
registered address.
The notice shall identify the Notes to be redeemed and shall state:
(a) the redemption date;
(b) the redemption price;
(c) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the
redemption date upon surrender of such Note, a new Note or Notes in
principal amount equal to the unredeemed portion shall be issued upon
cancellation of the original Note;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(f) that, unless the Company defaults in making such redemption
payment, interest on Notes called for redemption ceases to accrue on and
after the redemption date;
(g) the paragraph of the Notes and/or Section of this Indenture
pursuant to which the Notes called for redemption are being redeemed;
and
(h) that no representation is made as to the correctness or
accuracy of the CUSIP number, if any, listed in such notice or printed
on the Notes.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; provided, however, that
the Company shall have delivered to the Trustee, at least 45 days prior to
the redemption date, an Officers' Certificate requesting that the Trustee
give such notice and setting forth the information to be stated in such
notice as provided in the preceding paragraph.
Section 3.04 Effect of Notice of Redemption
Once notice of redemption is mailed in accordance with Section 3.03
hereof, Notes called for redemption become irrevocably due and payable on the
redemption date at the redemption price. A notice of redemption may not be
conditional.
Section 3.05 Deposit of Redemption Price
One Business Day prior to the redemption date, the Company shall
deposit with the Trustee or with the Paying Agent immediately available funds
sufficient to pay the redemption price of and accrued interest on all Notes
to be redeemed on that date. The Trustee or the Paying Agent shall promptly
<PAGE>
36
return to the Company any money deposited with the Trustee or the Paying
Agent by the Company in excess of the amounts necessary to pay the redemption
price of, and accrued interest on, all Notes to be redeemed.
If the Company complies with the provisions of the preceding
paragraph, on and after the redemption date, interest shall cease to accrue
on the Notes or the portions of Notes called for redemption. If a Note is
redeemed on or after an interest record date but on or prior to the related
interest payment date, then any accrued and unpaid interest shall be paid to
the Person in whose name such Note was registered at the close of business on
such record date. If any Note called for redemption shall not be so paid
upon surrender for redemption because of the failure of the Company to comply
with the preceding paragraph, interest shall be paid on the unpaid principal,
from the redemption date until such principal is paid, and to the extent
lawful on any interest not paid on such unpaid principal, in each case at the
rate provided in the Notes and in Section 4.01 hereof.
Section 3.06 Notes Redeemed in Part
Upon surrender of a Note that is redeemed in part, the Company
shall issue and, upon receipt of an Authentication Order, the Trustee shall
authenticate for the Holder at the expense of the Company a new Note equal in
principal amount to the unredeemed portion of the Note surrendered.
Section 3.07 Optional Redemption
The Notes will be redeemable, at the Company's option, in whole or
in part, at any time or from time to time, on or after April 15, 2003 and
prior to maturity, upon not less than 30 nor more than 60 days' prior notice
mailed by first class mail to each Holder's last registered address, at the
following redemption prices (expressed in percentages of principal amount),
plus accrued and unpaid interest and Additional Interest, if any, to the
redemption date (subject to the right of Holders of record on the relevant
regular record date that is on or prior to the redemption date to receive
interest due on an interest payment date), if redeemed during the 12-month
period commencing April 15, of the years set forth below:
Year Percentage
---- ----------
2003 . . . . . . . . . . . . . . . . . . 104.188%
2004 . . . . . . . . . . . . . . . . . . 102.792%
2005 . . . . . . . . . . . . . . . . . . 101.396%
2006 and thereafter. . . . . . . . . . . 100.000%
In addition, at any time prior to April 15, 2001, the Company may
redeem up to 35% of the principal amount of the Notes with the proceeds of
one or more sales by the Company of its Capital Stock (other than
Disqualified Stock), at any time or from time to time in part, at a
redemption price (expressed as a percentage of principal amount) of 108.375%,
plus accrued and unpaid interest and Additional Interest, if any, to the
redemption date (subject to the rights of Holders of record on the relevant
regular record date that is prior to the redemption date to receive interest
due on an interest payment date); provided that at least $81,250,000
aggregate principal amount of Notes remains outstanding after each such
redemption; and provided further, that such redemption occurs within 90 days
of the date of the closing of each such sale of Capital Stock.
<PAGE>
37
Section 3.08 No Mandatory Redemption
The Company shall not be required to make mandatory redemption
payments with respect to the Notes.
ARTICLE 4
COVENANTS
Section 4.01 Payment of Notes
The Company shall pay or cause to be paid the principal of,
premium, if any, and interest on the Notes on the dates and in the manner
provided in the Notes. Principal, premium, if any, and interest shall be
considered paid on the date due if the Paying Agent, if other than the
Company or a Subsidiary thereof, holds as of 12:00 noon Eastern Time on the
due date money deposited by the Company in immediately available funds and
designated for and sufficient to pay all principal, premium, if any, and
interest then due. The Company shall pay all Additional Interest, if any, in
the same manner on the dates and in the amounts set forth in the Registration
Rights Agreement. The Company's Obligations under the Notes, this Indenture
and the Registration Rights Agreement are referred to herein as the "Company
Obligations."
The Company shall pay interest (including Accrued Bankruptcy
Interest in any proceeding under any Bankruptcy Law) on overdue principal at
the then applicable interest rate on the Notes to the extent lawful; it shall
pay interest (including Accrued Bankruptcy Interest in any proceeding under
any Bankruptcy Law) on overdue installments of interest and Additional
Interest (without regard to any applicable grace period) at the same rate to
the extent lawful.
Section 4.02 Maintenance of Office or Agency
The Company shall maintain an office or agency (which may be an
office of the Trustee or an affiliate of the Trustee, Registrar or
co-registrar) where Notes may be surrendered for registration of transfer or
for exchange and where notices and demands to or upon the Company in respect
of the Notes and this Indenture may be served. The Company shall give prompt
written notice to the Trustee of the location, and any change in the
location, of such office or agency. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish the
Trustee with the address thereof, such presentations, surrenders, notices and
demands may be made or served at the Corporate Trust Office.
The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations.
The Company shall give prompt written notice to the Trustee of any such
designation or rescission and of any change in the location of any such other
office or agency.
The Company hereby designates the Corporate Trust Office as one
such office or agency of the Company in accordance with Section 2.03 hereof.
<PAGE>
38
Section 4.03 Commission Reports and Reports to Holders
Whether or not required by the rules and regulations of the Commission,
so long as any Notes are outstanding, the Company will furnish to the Holders
of Notes (i) all quarterly and annual financial information that would be
required to be contained in a filing with the Commission on Forms 10-Q and
10-K if the Company were required to file such Forms, including a
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and, with respect to the annual information only, a report
thereon by the Company's certified independent accountants and (ii) all
current reports that would be required to be filed with the Commission on
Form 8-K if the Company were required to file such reports. In addition,
whether or not required by the rules and regulations of the Commission, the
Company will file a copy of all such information and reports with the
Commission for public availability (unless the Commission will not accept
such a filing) and make such information available to securities analysts and
prospective investors upon request. In addition, the Company and the
Subsidiary Guarantors have agreed that, for so long as any Notes remain
outstanding, they will furnish to the Holders and to securities analysts and
prospective investors, upon their request, the information required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act.
Section 4.04 Compliance Certificate
(a) The Company shall deliver to the Trustee, within 105 days
after the end of each fiscal year, an Officers' Certificate stating that a
review of the activities of the Company and its Restricted Subsidiaries
during the preceding fiscal year has been made under the supervision of the
signing Officers with a view to determining whether the Company and the
Restricted Subsidiaries have kept, observed, performed and fulfilled their
obligations under this Indenture, and further stating, as to each such
Officer signing such certificate, that to the best of his or her knowledge
the Company and the Restricted Subsidiaries are not in default in the
performance or observance of any of the terms, provisions and conditions of
this Indenture (or, if a Default or Event of Default shall have occurred and
be continuing, describing all such Defaults or Events of Default of which he
or she may have knowledge and what action the Company is taking or proposes
to take with respect thereto) and that to the best of his or her knowledge no
event has occurred and remains in existence by reason of which payments on
account of the principal of or interest, if any, on the Notes is prohibited
or if such event has occurred, a description of the event and what action the
Company is taking or proposes to take with respect thereto.
(b) The Company shall, so long as any of the Notes are
outstanding, deliver to the Trustee, within five Business Days of any Officer
becoming aware of any Default or Event of Default, an Officers' Certificate
specifying such Default or Event of Default and what action the Company is
taking or proposes to take with respect thereto.
Section 4.05 Taxes
The Company shall pay, and shall cause each of its Subsidiaries to
pay, prior to delinquency, all material taxes, assessments, and governmental
levies except such as are contested in good faith and by appropriate
proceedings or where the failure to effect such payment would not have a
material adverse effect on the ability fo the Company and the Subsidiary
Guarantors to satisfy their obligations under the Notes, the Subsidiary
Guarantees and this Indenture.
<PAGE>
39
Section 4.06 Stay, Extension and Usury Laws
The Company covenants (to the extent that it may lawfully do so)
that it shall not at any time insist upon, plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay, extension or usury law
wherever enacted, now or at any time hereafter in force, that may affect the
covenants or the performance of this Indenture; and the Company (to the
extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and covenants that it shall not, by resort to any
such law, hinder, delay or impede the execution of any power herein granted
to the Trustee, but shall suffer and permit the execution of every such power
as though no such law has been enacted.
Section 4.07 Limitation on Indebtedness
(a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, Incur any Indebtedness (other than the Notes and the
Subsidiary Guarantees and Indebtedness existing on the Closing Date,
including the Old Senior Notes and the Old Senior Subordinated Notes until
redeemed); provided that the Company or any Restricted Subsidiary may Incur
Indebtedness if, after giving effect to the Incurrence of such Indebtedness
and the receipt and application of the proceeds therefrom, the Interest
Coverage Ratio would be greater than 2.25:1.
Notwithstanding the foregoing, the Company and any Restricted Subsidiary
(except as specified below) may Incur each and all of the following:
(i) Indebtedness outstanding at any time in an aggregate principal
amount not to exceed $185,000,000, less any amount of such Indebtedness
permanently repaid as provided under Section 4.15;
(ii) Indebtedness owed (A) by a Restricted Subsidiary to the
Company; provided that if such Indebtedness exceeds $500,000 it shall be
evidenced by a promissory note or (B) by the Company or a Restricted
Subsidiary to any Restricted Subsidiary; provided that any event which
results in any such Restricted Subsidiary ceasing to be a Restricted
Subsidiary or any subsequent transfer of such Indebtedness (other than
to the Company or another Restricted Subsidiary) shall be deemed, in
each case, to constitute an Incurrence of such Indebtedness not
permitted by this clause (ii);
(iii) Indebtedness issued in exchange for, or the net proceeds of
which are used to refinance or refund, then outstanding Indebtedness
(other than Indebtedness Incurred under clause (i), (ii) or (iv) of this
paragraph) and any refinancings thereof in an amount not to exceed the
amount so refinanced or refunded (plus premiums, accrued interest, fees
and expenses); provided that Indebtedness the proceeds of which are used
to refinance or refund the Notes or Indebtedness that is pari passu
with, or subordinated in right of payment to, the Notes shall only be
permitted under this clause (iii) if (A) in case the Notes are refi-
nanced in part or the Indebtedness to be refinanced is pari passu with
the Notes, such new Indebtedness, by its terms or by the terms of any
agreement or instrument pursuant to which such new Indebtedness is
outstanding, is expressly made pari passu with, or subordinate in right
of payment to, the remaining Notes, (B) in case the Indebtedness to be
refinanced is subordinated in right of payment to the Notes, such new
Indebtedness, by its terms or by the terms of any agreement or
instrument pursuant to which such new Indebtedness is issued or remains
<PAGE>
40
outstanding, is expressly made subordinate in right of payment to the
Notes at least to the extent that the Indebtedness to be refinanced is
subordinated to the Notes and (C) such new Indebtedness, determined as
of the date of Incurrence of such new Indebtedness, does not mature
prior to the Stated Maturity of the Indebtedness to be refinanced or
refunded, and the Average Life of such new Indebtedness is at least
equal to the remaining Average Life of the Indebtedness to be refinanced
or refunded; and provided further that in no event may Indebtedness of
the Company that is pari passu with or subordinated in right of payment
to the Notes be refinanced by means of any Indebtedness of any
Restricted Subsidiary pursuant to this clause (iii);
(iv) Indebtedness (A) in respect of performance, surety or appeal
bonds provided in the ordinary course of business, (B) under Currency
Agreements and Interest Rate Agreements; provided that such agreements
(a) are designed solely to protect the Company or its Restricted
Subsidiaries against fluctuations in foreign currency exchange rates or
interest rates and (b) do not increase the Indebtedness of the obligor
outstanding at any time other than as a result of fluctuations in
foreign currency exchange rates or interest rates or by reason of fees,
indemnities and compensation payable thereunder; and (C) arising from
agreements providing for indemnification, adjustment of purchase price
or similar obligations, or from Guarantees or letters of credit, surety
bonds or performance bonds securing any obligations of the Company or
any of its Restricted Subsidiaries pursuant to such agreements, in any
case Incurred in connection with the disposition of any business, assets
or Restricted Subsidiary (other than Guarantees of Indebtedness Incurred
by any Person acquiring all or any portion of such business, assets or
Restricted Subsidiary for the purpose of financing such acquisition), in
a principal amount not to exceed the gross proceeds actually received by
the Company or any Restricted Subsidiary in connection with such
disposition;
(v) Indebtedness of the Company, to the extent the net proceeds
thereof are promptly (A) used to purchase Notes tendered in an Offer to
Purchase made as a result of a Change in Control or (B) deposited to
defease the Notes under Article 8;
(vi) purchase money Indebtedness and Capitalized Lease Obligations
secured by Liens described in clauses (ix) or (xi) of the definition of
"Permitted Liens," provided, that the aggregate principal amount thereof
incurred in any fiscal year (other than Capitalized Lease Obligations
permitted under clause (vii) below), shall not exceed $15,000,000;
(vii) Capitalized Lease Obligations incurred in connection with the
sale of any property or assets in any sale and leaseback transaction
with any Person providing for the leasing by the Company or any of its
Restricted Subsidiaries of real or personal property which has been sold
by the Company or such Restricted Subsidiary for fair market value in an
aggregate amount not to exceed $15,000,000 in any fiscal year;
(viii) Indebtedness of a franchisee assumed by the Company or any
Restricted Subsidiary in connection with the purchase by the Company or
such Restricted Subsidiary of restaurants operated by such franchisee
and all franchise rights of such franchisee related to the purchased
restaurants; provided that the aggregate principal amount of all
Indebtedness permitted under this clause shall not exceed $5,000,000 at
any time outstanding;
<PAGE>
41
(ix) Indebtedness evidenced by letters of credit issued in the
ordinary course of business of the Company and/or any Restricted
Subsidiary to secure workers' compensation and other insurance coverage;
and
(x) Indebtedness, in addition to Indebtedness permitted under
clauses (i) through (ix) above, in an aggregate principal amount
outstanding at any time not to exceed $20,000,000 less any amount of
such Indebtedness permanently repaid as provided under Section 4.15.
(b) Notwithstanding any other provision of this Section 4.07, the
maximum amount of Indebtedness that the Company or a Restricted Subsidiary
may Incur pursuant to this Section 4.07 shall not be deemed to be exceeded,
with respect to any outstanding Indebtedness, due solely to the result of
fluctuations in the exchange rates of currencies.
(c) For purposes of determining any particular amount of Indebtedness
under this Section 4.07, (1) Indebtedness Incurred under the Credit Agreement
shall first be treated as Incurred pursuant to clause (i) of the second
paragraph of Section 4.07(a) to the full extent of Indebtedness permitted
under such clause (it being understood that additional Indebtedness under the
Credit Agreement may be incurred to the full extent permitted under any other
provision of this Indenture), (2) Guarantees, Liens or obligations with
respect to letters of credit supporting Indebtedness otherwise included in
the determination of such particular amount shall not be included and (3) any
Liens granted pursuant to the equal and ratable provisions referred to in
Section 4.09 shall not be treated as Indebtedness. For purposes of
determining compliance with this Section 4.07, in the event that an item of
Indebtedness meets the criteria of more than one of the types of Indebtedness
described in the above clauses (other than Indebtedness referred to in clause
(1) of the preceding sentence), the Company, in its sole discretion, shall
classify, and from time to time may reclassify, such item of Indebtedness and
only be required to include the amount and type of such Indebtedness in one
of such clauses.
Section 4.08 Limitation on Senior Subordinated Indebtedness
The Company shall not Incur any Indebtedness that is subordinate in
right of payment to any Senior Indebtedness unless such Indebtedness is pari
passu with, or subordinated in right of payment to, the Notes and the
Subsidiary Guarantors shall not Incur any Indebtedness that is subordinate in
right of payment to any Senior Indebtedness unless such Indebtedness is pari
passu with, or subordinated in right of payment to, the Subsidiary
Guarantees; provided that the foregoing limitation shall not apply to
distinctions between categories of Senior Indebtedness of the Company or the
Subsidiary Guarantors that exist by reason of any Liens or Guarantees arising
or created in respect of some but not all such Senior Indebtedness.
Section 4.09 Limitation on Liens
The Company will not, and will not permit any Restricted Subsidiary to,
create, incur, assume or suffer to exist any Liens other than Permitted Liens
unless the Indebtedness under the Notes and the Subsidiary Guarantees is
secured on an equal and ratable basis with the Indebtedness secured.
<PAGE>
42
Section 4.10 Limitation on Restricted Payments
The Company will not, and will not permit any Restricted Subsidiary to,
directly or indirectly, (i) declare or pay any dividend or make any
distribution on or with respect to its Capital Stock (other than (x)
dividends or distributions payable solely in shares of its Capital Stock
(other than Disqualified Stock) or in options, warrants or other rights to
acquire shares of such Capital Stock and (y) pro rata dividends or
distributions on Common Stock of Restricted Subsidiaries held by minority
stockholders) held by Persons other than the Company or any of its Restricted
Subsidiaries, (ii) purchase, redeem, retire or otherwise acquire for value
any shares of Capital Stock of (A) the Company or an Unrestricted Subsidiary
(including options, warrants or other rights to acquire such shares of
Capital Stock) held by any Person or (B) a Restricted Subsidiary (including
options, warrants or other rights to acquire such shares of Capital Stock)
held by any Affiliate of the Company (other than a Wholly Owned Restricted
Subsidiary) or any holder (or any Affiliate of such holder) of 5% or more of
the Capital Stock of the Company, (iii) make any voluntary or optional
principal payment, or voluntary or optional redemption, repurchase,
defeasance, or other acquisition or retirement for value, of Indebtedness of
the Company that is subordinated in right of payment to the Notes or (iv)
make any Investment, other than a Permitted Investment, in any Person (such
payments or any other actions described in clauses (i) through (iv) above
being collectively "Restricted Payments") if, at the time of, and after
giving effect to, the proposed Restricted Payment: (A) a Default or Event of
Default shall have occurred and be continuing, (B) the Company could not
Incur at least $1.00 of Indebtedness under the first paragraph of the Section
4.07(a) or (C) the aggregate amount of all Restricted Payments (the amount,
if other than in cash, to be determined in good faith by the Board of
Directors, whose determination shall be conclusive and evidenced by a Board
Resolution) made after the Closing Date shall exceed the sum of (1) 50% of
the aggregate amount of the Adjusted Consolidated Net Income (or, if the
Adjusted Consolidated Net Income is a loss, minus 100% of the amount of such
loss) (determined by excluding income resulting from transfers of assets by
the Company or a Restricted Subsidiary to an Unrestricted Subsidiary) accrued
on a cumulative basis during the period (taken as one accounting period)
beginning on January 19, 1998 and ending on the last day of the last fiscal
quarter preceding the Transaction Date for which reports have been filed with
the Commission or provided to the Trustee pursuant to Section 4.03 plus (2)
the aggregate Net Cash Proceeds received by the Company after the Closing
Date from the issuance and sale permitted by this Indenture of its Capital
Stock (other than Disqualified Stock) to a Person who is not a Subsidiary of
the Company, including an issuance or sale permitted by this Indenture of
Indebtedness of the Company for cash subsequent to the Closing Date upon the
conversion of such Indebtedness into Capital Stock (other than Disqualified
Stock) of the Company, or from the issuance to a Person who is not a
Subsidiary of the Company of any options, warrants or other rights to acquire
Capital Stock of the Company (in each case, exclusive of any Disqualified
Stock or any options, warrants or other rights that are redeemable at the
option of the holder, or are required to be redeemed, prior to the Stated
Maturity of the Notes), plus (3) an amount equal to the net reduction in
Investments (other than reductions in Permitted Investments) in any Person
resulting from payments of interest on Indebtedness, dividends, repayments of
loans or advances, or other transfers of assets, in each case to the Company
or any Restricted Subsidiary or from the Net Cash Proceeds from the sale of
any such Investment (except, in each case, to the extent any such payment or
proceeds are included in the calculation of Adjusted Consolidated Net
Income), or from redesignations of Unrestricted Subsidiaries as Restricted
Subsidiaries (valued in each case as provided in the definition of
"Investments"), not to exceed, in each case, the amount of Investments
previously made by the Company or any Restricted Subsidiary in such Person or
Unrestricted Subsidiary.
<PAGE>
43
The foregoing provision shall not be violated by reason of: (i) the
payment of any dividend within 60 days after the date of declaration thereof
if, at said date of declaration, such payment would comply with the foregoing
paragraph; (ii) the redemption, repurchase, defeasance or other acquisition
or retirement for value of Indebtedness that is subordinated in right of
payment to the Notes including premium, if any, and accrued and unpaid
interest, with the proceeds of, or in exchange for, Indebtedness Incurred
under clause (iii) of the second paragraph of Section 4.07(a); (iii) the
repurchase, redemption or other acquisition of Capital Stock of the Company
or an Unrestricted Subsidiary (or options, warrants or other rights to
acquire such Capital Stock) in exchange for, or out of the proceeds of a
substantially concurrent offering of, shares of Capital Stock (other than
Disqualified Stock) of the Company (or options, warrants or other rights to
acquire such Capital Stock); (iv) the making of any principal payment or the
repurchase, redemption, retirement, defeasance or other acquisition for value
of Indebtedness of the Company which is subordinated in right of payment to
the Notes in exchange for, or out of the proceeds of, a substantially
concurrent offering of, shares of the Capital Stock (other than Disqualified
Stock) of the Company (or options, warrants or other rights to acquire such
Capital Stock); (v) payments or distributions, to dissenting stockholders
pursuant to applicable law, pursuant to or in connection with a
consolidation, merger or transfer of assets that complies with the provisions
of this Indenture applicable to mergers, consolidations and transfers of all
or substantially all of the property and assets of the Company; (vi)
Investments acquired in exchange for Capital Stock (other than Disqualified
Stock) of the Company; (vii) payments of amounts required for any repurchase,
redemption, retirement or other acquisition of any Capital Stock of the
Company or any options or rights to acquire such Capital Stock of the Company
owned by any director, officer or employee of the Company or its Subsidiaries
pursuant to any management equity subscription agreement, stock option
agreement or similar agreement, or otherwise upon the death, disability,
retirement or termination of employment or departure from the Board of
Directors of the Company; provided that the aggregate price paid for all such
repurchased, redeemed, retired or acquired Capital Stock of the Company or
options shall not exceed in the aggregate $1,000,000; or (viii) Restricted
Payments in an aggregate amount not to exceed $5,000,000; provided that,
except in the case of clauses (i) and (iii), no Default or Event of Default
shall have occurred and be continuing or occur as a consequence of the
actions or payments set forth therein.
Each Restricted Payment permitted pursuant to the preceding paragraph
(other than the Restricted Payment referred to in clause (ii) thereof, an
exchange of Capital Stock for Capital Stock or Indebtedness referred to in
clause (iii) or (iv) thereof and an Investment referred to in clause (vi)
thereof), and the Net Cash Proceeds from any issuance of Capital Stock
referred to in clauses (iii) and (iv), shall be included in calculating
whether the conditions of clause (C) of the first paragraph of this Section
4.10 have been met with respect to any subsequent Restricted Payments. In
the event the proceeds of an issuance of Capital Stock of the Company are
used for the redemption, repurchase or other acquisition of the Notes, or
Indebtedness that is pari passu with the Notes, then the Net Cash Proceeds of
such issuance shall be included in clause (C) of the first paragraph of this
Section 4.10 only to the extent such proceeds are not used for such
redemption, repurchase or other acquisition of Indebtedness.
Section 4.11 Limitation on Dividend and Other Payment Restrictions Affecting
Restricted Subsidiaries
The Company will not, and will not permit any Restricted Subsidiary to,
create or otherwise cause or suffer to exist or become effective any
<PAGE>
44
consensual encumbrance or restriction of any kind on the ability of any
Restricted Subsidiary to (i) pay dividends or make any other distributions
permitted by applicable law on any Capital Stock of such Restricted
Subsidiary owned by the Company or any other Restricted Subsidiary, (ii) pay
any Indebtedness owed to the Company or any other Restricted Subsidiary,
(iii) make loans or advances to the Company or any other Restricted
Subsidiary or (iv) transfer any of its property or assets to the Company or
any other Restricted Subsidiary.
The foregoing provisions shall not restrict any encumbrances or
restrictions: (i) existing on the Closing Date in the Credit Agreement, this
Indenture or any other agreements in effect on the Closing Date, and any
modifications, extensions, refinancings, renewals, substitutions or
replacements of such agreements; provided that the encumbrances and
restrictions in any such modifications, extensions, refinancings, renewals,
substitutions or replacements are no less favorable in any material respect
to the Holders than those encumbrances or restrictions that are then in
effect and that are being modified, extended, refinanced, renewed,
substituted or replaced; (ii) existing under or by reason of applicable law;
(iii) existing with respect to any Person or the property or assets of such
Person acquired by the Company or any Restricted Subsidiary, existing at the
time of such acquisition and not incurred in contemplation thereof, which
encumbrances or restrictions are not applicable to any Person or the property
or assets of any Person other than such Person or the property or assets of
such Person so acquired; (iv) in the case of clause (iv) of the first
paragraph of this Section 4.11, (A) that restrict in a customary manner the
subletting, assignment or transfer of any property or asset that is a lease,
license, conveyance or contract or similar property or asset, (B) existing by
virtue of any transfer of, agreement to transfer, option or right with
respect to, or Lien on, any property or assets of the Company or any
Restricted Subsidiary not otherwise prohibited by this Indenture or
(C) arising or agreed to in the ordinary course of business, not relating to
any Indebtedness, and that do not, individually or in the aggregate, detract
from the value of property or assets of the Company or any Restricted
Subsidiary in any manner material to the Company or any Restricted
Subsidiary; (v) with respect to a Restricted Subsidiary and imposed pursuant
to an agreement that has been entered into for the sale or disposition of all
or substantially all of the Capital Stock of, or property and assets of, such
Restricted Subsidiary; or (vi) contained in the terms of any Indebtedness or
any agreement pursuant to which such Indebtedness was issued if (A) the
encumbrance or restriction applies only in the event of a payment default or
a default with respect to a financial covenant contained in such Indebtedness
or agreement, (B) the encumbrance or restriction is not materially more
disadvantageous to the Holders of the Notes than is customary in comparable
financings (as determined by the Company) and (C) the Company determines that
any such encumbrance or restriction will not materially affect the Company's
ability to make principal or interest payments on the Notes. Nothing
contained in this Section 4.11 shall prevent the Company or any Restricted
Subsidiary from (1) creating, incurring, assuming or suffering to exist any
Liens otherwise permitted in Section 4.09 or (2) restricting the sale or
other disposition of property or assets of the Company or any of its
Restricted Subsidiaries that secure Indebtedness of the Company or any of its
Restricted Subsidiaries.
Section 4.12 Limitation on the Issuance and Sale of Capital Stock of
Restricted Subsidiaries
The Company will not sell, and will not permit any Restricted
Subsidiary, directly or indirectly, to issue or sell, any shares of Capital
Stock of a Restricted Subsidiary (including options, warrants or other rights
to purchase shares of such Capital Stock) except (i) to the Company or a
Wholly Owned Restricted Subsidiary; (ii) issuances of director's qualifying
shares or sales to foreign nationals of shares of Capital Stock of foreign
Restricted Subsidiaries, to the extent required by applicable law; (iii) if,
immediately after giving effect to such issuance or sale, such Restricted
<PAGE>
45
Subsidiary would no longer constitute a Restricted Subsidiary and any
Investment in such Person remaining after giving effect to such issuance or
sale would have been permitted to be made under Section 4.10 if made on the
date of such issuance or sale; or (iv) issuances or sales of Common Stock of
a Restricted Subsidiary; provided that the Company or such Restricted
Subsidiary applies the Net Cash Proceeds, if any, of any such sale in
accordance with clause (A) or (B) of Section 4.15.
Section 4.13 Additional Subsidiary Guarantees
If the Company or any of its Restricted Subsidiaries shall acquire or
create another Restricted Subsidiary after the date of this Indenture, then
such newly acquired or created Restricted Subsidiary shall execute a Subsid-
iary Guarantee substantially in the form of Exhibit E hereto and deliver an
Opinion of Counsel in form and substance reasonably satisfactory to the
Trustee regarding the due authorization, execution and delivery of the
Subsidiary Guarantee.
Section 4.14 Limitation on Transactions with Affiliates and Certain
Stockholders
The Company will not, and will not permit any Restricted Subsidiary to,
directly or indirectly, enter into, renew or extend any transaction
(including, without limitation, the purchase, sale, lease or exchange of
property or assets, or the rendering of any service) with any holder (or any
Affiliate of such holder) of 5% or more of any class of Capital Stock of the
Company or with any Affiliate of the Company or any Restricted Subsidiary,
except upon fair and reasonable terms no less favorable to the Company or
such Restricted Subsidiary than could be obtained, at the time of such
transaction or, if such transaction is pursuant to a written agreement, at
the time of the execution of the agreement providing therefor, in a
comparable arm's-length transaction with a Person that is not such a holder
or an Affiliate.
The foregoing limitation does not limit, and shall not apply to (i)
transactions (A) approved by a majority of the disinterested members of the
Board of Directors or (B) for which the Company or a Restricted Subsidiary
delivers to the Trustee a written opinion of a nationally recognized
investment banking firm stating that the transaction is fair to the Company
or such Restricted Subsidiary from a financial point of view; (ii) any
transaction solely between the Company and any of its Wholly Owned Restricted
Subsidiaries or solely between Wholly Owned Restricted Subsidiaries; (iii)
customary directors' fees, indemnification and similar arrangements, employee
salaries and bonuses, employment agreements and arrangements or compensation
or employee benefit arrangements (including options) in the ordinary course
of business; (iv) any payments or other transactions pursuant to any
tax-sharing agreement between the Company and any other Person with which the
Company files a consolidated tax return or with which the Company is part of
a consolidated group for tax purposes; (v) loans or advances to officers or
employees of the Company or any Restricted Subsidiary made in the ordinary
course of business of the Company or such Restricted Subsidiary to pay
business related travel expenses or reasonable relocation costs of such
officers or employees in connection with their employment by the Company or
such Restricted Subsidiary; (vi) leases or repurchases of property, in each
case on terms set forth in agreements as in effect on the date hereof, by the
Company or any Restricted Subsidiary from CRC-I Limited Partnership, CRC-II
Limited Partnership or any transferee of an estate for years from such
Persons; or (vii) any Restricted Payments not prohibited by Section 4.10.
Notwithstanding the foregoing, any transaction or series of related
transactions covered by the first paragraph of this Section 4.14 and not
covered by clauses (ii) through (vii) of this paragraph, (a) the aggregate
amount of which exceeds $1,000,000 in value, must be approved or determined
to be fair in the manner provided for in clause (i)(A) or (B) above and (b)
<PAGE>
46
the aggregate amount of which exceeds $3,000,000 in value, must be determined
to be fair in the manner provided for in clause (i)(B) above.
Section 4.15 Limitation on Asset Sales
The Company will not, and will not permit any Restricted Subsidiary to,
consummate any Asset Sale, unless (i) the consideration received by the
Company or such Restricted Subsidiary is at least equal to the fair market
value of the assets sold or disposed of and (ii) at least 85% of the
consideration (excluding contingent liabilities assumed by the transferee of
any such assets) received consists of cash or Temporary Cash Investments or
the assumption of Senior Indebtedness of the Company or a Subsidiary
Guarantor; provided that the Company or such Restricted Subsidiary is
irrevocably released from all liability under such Indebtedness. In the
event and to the extent that the Net Cash Proceeds received by the Company or
any of its Restricted Subsidiaries from one or more Asset Sales occurring on
or after the Closing Date in any period of 12 consecutive months exceed 10%
of Adjusted Consolidated Net Tangible Assets (determined as of the date
closest to the commencement of such 12-month period for which a consolidated
balance sheet of the Company and its Subsidiaries has been filed with the
Commission or provided to the Trustee pursuant to Section 4.03), then the
Company shall or shall cause the relevant Restricted Subsidiary to (i) within
12 months after the date Net Cash Proceeds so received exceed 10% of Adjusted
Consolidated Net Tangible Assets (A) apply an amount equal to such excess Net
Cash Proceeds to permanently repay Senior Indebtedness of the Company or a
Subsidiary Guarantor or (B) invest an equal amount, or the amount not so
applied pursuant to clause (A) (or enter into a definitive agreement
committing to so invest within 12 months after the date of such agreement),
in property or assets (other than current assets) of a nature or type or that
are used in a business (or in a company having property and assets of a
nature or type, or engaged in a business) similar or related to the nature or
type of the property and assets of, or the business of, the Company and its
Restricted Subsidiaries existing on the date of such investment and (ii)
apply (no later than the end of the 12-month period referred to in clause
(i)) such excess Net Cash Proceeds (to the extent not applied pursuant to
clause (i)) as provided in the following paragraph of this Section 4.15. The
amount of such excess Net Cash Proceeds required to be applied (or to be
committed to be applied) during such 12-month period as set forth in clause
(i) of the preceding sentence and not applied as so required by the end of
such period shall constitute "Excess Proceeds."
If, as of the first day of any calendar month, the aggregate amount of
Excess Proceeds not theretofore subject to an Offer to Purchase pursuant to
this Section 4.15 totals at least $5,000,000, the Company must commence, not
later than the fifteenth Business Day of such month, an Offer to Purchase to
the Holders of the Notes and, to the extent required by the terms of any Pari
Passu Indebtedness, an Offer to Purchase to all holders of such Pari Passu
Indebtedness, the maximum principal amount of Notes and any such Pari Passu
Indebtedness that may be purchased out of the Excess Proceeds, at an offer
price equal to 100% of the principal amount thereof, plus, in each case,
accrued and unpaid interest and Additional Interest, if any, to the Payment
Date. If the aggreage principal amount of Notes and any such Pari Passu
Indebtedness tendered by holders thereof exceeds the amount of Excess
Proceeds, the Notes and Pari Passu Indebtedness shall be purchased on a pro
rata basis. Upon the completion of any such Offers to Purchase, the amount
of Excess Proceeds shall be reset at zero.
<PAGE>
47
Section 4.16 Repurchase of Notes upon a Change of Control
The Company must commence, within 30 days of the occurrence of a Change
of Control, and consummate an Offer to Purchase for all Notes then
outstanding, at a purchase price equal to 101% of the principal amount
thereof, plus accrued interest (if any) to the Payment Date.
There can be no assurance that the Company will have sufficient funds
available at the time of any Change of Control to make any debt payment
(including repurchases of Notes) required by the foregoing covenant (as well
as may be contained in other securities of the Company which might be
outstanding at the time). The above covenant requiring the Company to
repurchase the Notes will, unless consents are obtained, require the Company
to repay all indebtedness then outstanding which by its terms would prohibit
such Note repurchase, either prior to or concurrently with such Note
repurchase.
The Company will not be required to make an Offer to Purchase pursuant
to this covenant if a third party makes an Offer to Purchase in compliance
with this covenant and repurchases all Notes validly tendered and not
withdrawn under such Offer to Purchase.
ARTICLE 5
SUCCESSORS
Section 5.01 Merger, Consolidation or Sale of Assets
The Company will not consolidate with, merge with or into, or sell,
convey, transfer, lease or otherwise dispose of all or substantially all of
its property and assets (as an entirety or substantially an entirety in one
transaction or a series of related transactions) to, any Person or permit any
Person to merge with or into the Company unless: (i) the Company shall be
the continuing Person, or the Person (if other than the Company) formed by
such consolidation or into which the Company is merged or that acquired or
leased such property and assets of the Company shall be a corporation
organized and validly existing under the laws of the United States of America
or any state or jurisdiction thereof and shall expressly assume, by a
supplemental indenture, executed and delivered to the Trustee, all of the
obligations of the Company on all of the Notes and under this Indenture; (ii)
immediately after giving effect to such transaction, no Default or Event of
Default shall have occurred and be continuing; (iii) immediately after giving
effect to such transaction on a pro forma basis, the Company or any Person
becoming the successor obligor of the Notes shall have a Consolidated Net
Worth equal to or greater than the Consolidated Net Worth of the Company
immediately prior to such transaction; (iv) immediately after giving effect
to such transaction on a pro forma basis the Company, or any Person becoming
the successor obligor of the Notes, as the case may be, could Incur at least
$1.00 of Indebtedness under the first paragraph of Section 4.07(a); provided
that this clause (iv) shall not apply to a consolidation, merger or sale of
all (but not less than all) of the assets of the Company if all Liens and
Indebtedness of the Company or any Person becoming the successor obligor on
the Notes, as the case may be, and its Restricted Subsidiaries outstanding
immediately after such transaction would, if Incurred at such time, have been
permitted to be Incurred (and all such Liens and Indebtedness, other than
Liens and Indebtedness of the Company and its Restricted Subsidiaries
outstanding immediately prior to the transaction, shall be deemed to have
been Incurred) for all purposes of this Indenture; and (v) the Company
delivers to the Trustee an Officers' Certificate (attaching the arithmetic
computations to demonstrate compliance with clauses (iii) and (iv)) and
Opinion of Counsel, in each case stating that such consolidation, merger or
transfer and such supplemental indenture complies with this provision and
that all conditions precedent provided for herein relating to such
<PAGE>
48
transaction have been complied with; provided, however, that clauses (iii)
and (iv) above do not apply if, in the good faith determination of the Board
of Directors of the Company, whose determination shall be evidenced by a
Board Resolution, the principal purpose of such transaction is to change the
state of incorporation of the Company and that any such transaction shall not
have as one of its purposes the evasion of the foregoing limitations.
Section 5.02 Successor Corporation Substituted
Upon any consolidation or merger, or any sale, assignment,
transfer, lease, conveyance or other disposition of all or substantially all
of the assets of the Company in accordance with Section 5.01 hereof, the
successor corporation formed by such consolidation or into or with which the
Company is merged or to which such sale, assignment, transfer, lease,
conveyance or other disposition is made shall succeed to, and be substituted
for (so that from and after the date of such consolidation, merger, sale,
lease, conveyance or other disposition, the provisions of this Indenture
referring to the "Company" shall refer instead to the successor corporation
and not to the Company), and may exercise every right and power of the
Company under this Indenture with the same effect as if such successor Person
had been named as the Company herein; provided, however, that the predecessor
of the Company shall not be relieved from the obligation to pay the principal
of and interest on the Notes.
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01 Events of Default
Each of the following constitutes an Event of Default:
(a) default in the payment of principal of (or premium, if any, on)
any Note when the same becomes due and payable at maturity, upon
acceleration, redemption or otherwise, whether or not such payment is
prohibited by Article 11;
(b) default in the payment of interest on any Note when the same
becomes due and payable, and such default continues for a period of 30 days,
whether or not such payment is prohibited by Article 11;
(c) default in the performance or breach of Section 5.01 or failure
to make or consummate an Offer to Purchase in accordance with Section 4.15 or
Section 4.16;
(d) the Company or any Subsidiary Guarantor defaults in the
performance of or breaches any other covenant or agreement of the Company or
any Subsidiary Guarantor in this Indenture or under the Notes (other than a
default specified in clause (a), (b) or (c) above) and such default or breach
continues for a period of 30 consecutive days after written notice by the
Trustee or the Holders of 25% or more in aggregate principal amount of the
Notes;
(e) there occurs with respect to any issue or issues of
Indebtedness of the Company or any Significant Subsidiary having an
outstanding principal amount of $5,000,000 or more in the aggregate for all
such issues of all such Persons, whether such Indebtedness now exists or
<PAGE>
49
shall hereafter be created, (I) an event of default that has caused the
holder thereof to declare such Indebtedness to be due and payable prior to
its Stated Maturity and such Indebtedness has not been discharged in full or
such acceleration has not been rescinded or annulled within 30 days of such
acceleration and/or (II) the failure to make a principal payment at the final
(but not any interim) fixed maturity and such defaulted payment shall not
have been made, waived or extended within 30 days of such payment default;
(f) any final judgment or order (not covered by insurance) for the
payment of money in excess of $5,000,000 in the aggregate for all such final
judgments or orders against all such Persons (treating any deductibles,
self-insurance or retention as not so covered) shall be rendered against the
Company or any Significant Subsidiary and shall not be paid or discharged,
and there shall be any period of 60 consecutive days following entry of the
final judgment or order that causes the aggregate amount for all such final
judgments or orders outstanding and not paid or discharged against all such
Persons to exceed $5,000,000 during which a stay of enforcement of such final
judgment or order, by reason of a pending appeal or otherwise, shall not be
in effect;
(g) except as permitted by this Indenture, any Subsidiary Guarantee
shall be held in any judicial proceeding to be unenforceable or invalid or
shall cease for any reason to be in full force and effect in any material
respect or any Subsidiary Guarantor, or any Person acting on behalf of any
Subsidiary Guarantor, shall deny or disaffirm its obligations under its
Subsidiary Guarantee;
(h) a court having jurisdiction in the premises enters a decree or
order for (A) relief in respect of the Company or any Significant Subsidiary
in an involuntary case under any applicable Bankruptcy Law now or hereafter
in effect, (B) appointment of a receiver, liquidator, assignee, custodian,
trustee, sequestrator or similar official of the Company or any Significant
Subsidiary or for all or substantially all of the property and assets of the
Company or any Significant Subsidiary or (C) the winding up or liquidation of
the affairs of the Company or any Significant Subsidiary and, in each case,
such decree or order shall remain unstayed and in effect for a period of 60
consecutive days; or
(i) the Company or any Significant Subsidiary (A) commences a
voluntary case under any applicable Bankruptcy Law now or hereafter in
effect, or consents to the entry of an order for relief in an involuntary
case under any such law, (B) consents to the appointment of or taking
possession by a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of the Company or any Significant Subsidiary
or for all or substantially all of the property and assets of the Company or
any Significant Subsidiary or (C) effects any general assignment for the
benefit of creditors.
The term "Bankruptcy Law" means Title 11, U.S. Code or any similar
federal or state law for the relief of debtors. The term "Custodian" means
any receiver, trustee, assignee, liquidator or similar official under any
Bankruptcy Law.
Section 6.02 Acceleration
If an Event of Default (other than an Event of Default specified in
clause (h) or (i) of Section 6.01 that occurs with respect to the Company or
any Significant Subsidiary) occurs and is continuing under this Indenture,
the Trustee or the Holders of at least 25% in aggregate principal amount of
the Notes, then outstanding, by written notice to the Company (and to the
Trustee if such notice is given by the Holders), may, and the Trustee at the
request of such Holders shall, declare the principal of, premium, if any, and
<PAGE>
50
accrued interest (including Additional Interest) on the Notes to be
immediately due and payable. Upon a declaration of acceleration, such
principal of, premium, if any, and accrued interest shall be immediately due
and payable; provided that any such declaration of acceleration shall not
become effective until the earlier of (A) five Business Days after receipt of
the acceleration notice by the Representative of the lenders under the Credit
Agreement and the Company or (B) acceleration of the Indebtedness under the
Credit Agreement; provided further that such acceleration shall automatically
be rescinded and annulled without any further action required on the part of
the Holders in the event that any and all Events of Default specified in the
acceleration notice under this Indenture shall have been cured, waived or
otherwise remedied as provided in this Indenture prior to the expiration of
the period referred to in the preceding clauses (A) and (B). In the event of
a declaration of acceleration because an Event of Default set forth in clause
(e) above has occurred and is continuing, such declaration of acceleration
shall be automatically rescinded and annulled if the event of default
triggering such Event of Default pursuant to clause (e) shall be remedied or
cured by the Company or the relevant Significant Subsidiary or waived by the
holders of the relevant Indebtedness within 60 days after the declaration of
acceleration with respect thereto. If an Event of Default specified in
clause (h) or (i) above occurs with respect to the Company or any Significant
Subsidiary, the principal of, premium, if any, and accrued interest on the
Notes then outstanding shall ipso facto become and be immediately due and
payable without any declaration or other act on the part of the Trustee or
any Holder.
Section 6.03 Other Remedies
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy to collect the payment of principal, premium, if
any, and interest on the Notes or to enforce the performance of any provision
of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess
any of the Notes or does not produce any of them in the proceeding. A delay
or omission by the Trustee or any Holder of a Note in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy
or constitute a waiver of or acquiescence in the Event of Default. All
remedies are cumulative to the extent permitted by law.
Section 6.04 Waiver of Past Defaults
The Holders of at least a majority in principal amount of the
outstanding Notes by written notice to the Company and to the Trustee, may
waive all past defaults and rescind and annul a declaration of acceleration
and its consequences if (i) all existing Events of Default, other than the
nonpayment of the principal of, premium, if any, and interest on the Notes
that have become due solely by such declaration of acceleration, have been
cured or waived and (ii) the rescission would not conflict with any judgment
or decree of a court of competent jurisdiction. Upon any such waiver, such
Default shall cease to exist, and any Event of Default arising therefrom
shall be deemed to have been cured for every purpose of this Indenture; but
no such waiver shall extend to any subsequent or other Default or impair any
right consequent thereon.
Section 6.05 Control by Majority
Holders of at least a majority in aggregate principal amount of the
then outstanding Notes may direct the time, method and place of conducting
<PAGE>
51
any proceeding for exercising any remedy available to the Trustee or
exercising any trust or power conferred on it. However, the Trustee may
refuse to follow any direction that conflicts with law or this Indenture that
the Trustee determines in good faith may be unduly prejudicial to the rights
of other Holders of Notes not joining in the giving of such direction or that
may involve the Trustee in personal liability and the Trustee may take any
other action it deems proper that is not inconsistent with any such direction
received from Holders of the Notes.
Section 6.06 Limitation on Suits
A Holder of a Note may pursue a remedy with respect to this
Indenture or the Notes only if:
(a) the Holder of a Note gives to the Trustee written notice of a
continuing Event of Default;
(b) the Holders of at least 25% in aggregate principal amount of
the then outstanding Notes make a written request to the Trustee to
pursue the remedy;
(c) such Holder of a Note or Holders of Notes offer and, if
requested, provide to the Trustee indemnity satisfactory to the Trustee
against any costs, liability or expense;
(d) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer and, if requested, the
provision of indemnity; and
(e) during such 60-day period the Holders of a majority in
principal amount of the then outstanding Notes do not give the Trustee a
direction inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the rights of
another Holder of a Note or to obtain a preference or priority over another
Holder of a Note.
Section 6.07 Rights of Holders of Notes to Receive Payment
Notwithstanding any other provision of this Indenture, the right of
any Holder of a Note to receive payment of the principal of, premium and
Additional Interest, if any, and interest on the Note, on or after the
respective due dates expressed in the Note (including in connection with an
offer to purchase), or to bring suit for the enforcement of any such payment
on or after such respective dates, shall not be impaired or affected without
the consent of such Holder.
Section 6.08 Collection Suit by Trustee
If an Event of Default specified in Section 6.01(a) or (b) occurs
and is continuing, the Trustee is authorized to recover judgment in its own
name and as trustee of an express trust against the Company for the whole
amount of principal of, premium and Additional Interest, if any, and interest
remaining unpaid on the Notes and interest on overdue principal and, to the
extent lawful, interest and such further amount as shall be sufficient to
cover the costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel.
<PAGE>
52
Section 6.09 Trustee May File Proofs of Claim
The Trustee is authorized to file such proofs of claim and other
papers or documents as may be necessary or advisable in order to have the
claims of the Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel)
and the Holders of the Notes allowed in any judicial proceedings relative to
the Company (or any other obligor upon the Notes), its creditors or its
property and shall be entitled and empowered to collect, receive and
distribute any money or other property payable or deliverable on any such
claims and any custodian in any such judicial proceeding is hereby authorized
by each Holder to make such payments to the Trustee, and in the event that
the Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.07
hereof. To the extent that the payment of any such compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any
other amounts due the Trustee under Section 7.07 hereof out of the estate in
any such proceeding, shall be denied for any reason, payment of the same
shall be secured by a Lien on, and shall be paid out of, any and all
distributions, dividends, money, securities and other properties that the
Holders may be entitled to receive in such proceeding whether in liquidation
or under any plan of reorganization or arrangement or otherwise. Nothing
herein contained shall be deemed to authorize the Trustee to authorize or
consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder, or to authorize the Trustee to vote in respect of
the claim of any Holder in any such proceeding.
Section 6.10 Priorities
If the Trustee collects any money pursuant to this Article, it
shall pay out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts due
under Section 7.07 hereof, including payment of all compensation, expense and
liabilities incurred, and all advances made, by the Trustee and the costs and
expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on the
Notes for principal and Additional Interest, if any, and interest, ratably,
without preference or priority of any kind, according to the amounts due and
payable on the Notes for principal, premium and Additional Interest, if any,
and interest, respectively; and
Third: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment
to Holders of Notes pursuant to this Section 6.10.
Section 6.11 Undertaking for Costs
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted
by it as a Trustee, a court in its discretion may require the filing by any
<PAGE>
53
party litigant in the suit of an undertaking to pay the costs of the suit,
and the court in its discretion may assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in the suit, having
due regard to the merits and good faith of the claims or defenses made by the
party litigant. This Section does not apply to a suit by the Trustee, a suit
by a Holder of a Note pursuant to Section 6.07 hereof, or a suit by Holders
of more than 10% in principal amount of the then outstanding Notes.
ARTICLE 7
TRUSTEE
Section 7.01 Duties of Trustee
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in its exercise, as a
prudent man would exercise or use under the circumstances in the conduct of
his own affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely by
the express provisions of this Indenture and the Trustee need perform
only those duties that are specifically set forth in this Indenture and
no others, and no implied covenants or obligations shall be read into
this Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions
furnished to the Trustee and conforming to the requirements of this
Indenture. However, the Trustee shall examine the certificates and
opinions to determine whether or not they conform to the requirements of
this Indenture.
(c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b)
of this Section;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by an Officer, unless it is proved that the Trustee
was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision
of this Indenture that in any way relates to the Trustee is subject to
Sections 7.01 and 7.02.
<PAGE>
54
(e) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or incur any liability. The Trustee shall be
under no obligation to exercise any of its rights and powers under this
Indenture at the request of any Holders, unless such Holder shall have
offered to the Trustee security and indemnity satisfactory to it against any
loss, liability or expense.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
Section 7.02 Rights of Trustee
(a) In connection with the Trustee's rights and duties under this
Indenture, the Trustee may conclusively rely upon any document believed by it
to be genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting under this
Indenture, it may require an Officers' Certificate or an Opinion of Counsel
or both. The Trustee shall not be liable for any action it takes or omits to
take in good faith in reliance on such Officers' Certificate or Opinion of
Counsel. The Trustee may consult with counsel and the written advice of such
counsel or any Opinion of Counsel shall be full and complete authorization
and protection from liability in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon.
(c) The Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any agent appointed
with due care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith that it believes to be authorized or within the
rights or powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
(f) The Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders unless such Holders shall have offered to the
Trustee reasonable security or indemnity against the costs, expenses and
liabilities that might be incurred by it in compliance with such request or
direction.
(g) Except with respect to Section 4.01 hereof, the Trustee shall
have no duty to inquire as to the performance of the Company's covenants in
Article 4 hereof. In addition, the Trustee shall not be deemed to have
knowledge of any Default or Event of Default except (i) any Event of Default
occurring pursuant to Sections 6.01(a), 6.01(b) and 4.01 or (ii) any Default
or Event of Default of which the Trustee shall have received written
notification or obtained actual knowledge.
(h) The Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee may, in its discretion, make such further inquiry
<PAGE>
55
or investigation into such facts or matters as it may see fit and if the
Trustee shall determine to make such further inquiry or investigation, it
shall be entitled to examine the books, records and premises of the Company
personally or by agent or attorney.
Section 7.03 Individual Rights of Trustee
The Trustee in its individual or any other capacity may become the
owner or pledgee of Notes and may otherwise deal with the Company or any
Affiliate of the Company with the same rights it would have if it were not
Trustee. However, in the event that the Trustee acquires any conflicting
interest (as defined in the TIA) it must eliminate such conflict within 90
days, apply to the Commission for permission to continue as trustee or
resign. Any Agent may do the same with like rights and duties. The Trustee
is also subject to Sections 7.10 and 7.11 hereof.
Section 7.04 Trustee's Disclaimer
The Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this Indenture or the Notes,
it shall not be accountable for the Company's use of the proceeds from the
Notes or any money paid to the Company or upon the Company's direction under
any provision of this Indenture, it shall not be responsible for the use or
application of any money received by any Paying Agent other than the Trustee,
and it shall not be responsible for any statement or recital herein or any
statement in the Notes or any other document in connection with the sale of
the Notes or pursuant to this Indenture other than its certificate of
authentication.
Section 7.05 Notice of Defaults
If a Default or Event of Default occurs and is continuing and if it
is known to the Trustee, the Trustee shall mail to Holders of Notes a notice
of the Default or Event of Default within 90 days after it occurs. Except in
the case of a Default or Event of Default in payment of principal of,
premium, if any, or interest on any Note, the Trustee may withhold the notice
if and so long as a committee of its Officers in good faith determines that
withholding the notice is in the interests of the Holders of the Notes.
Section 7.06 Reports by Trustee to Holders of the Notes
Within 60 days after each May 15 beginning with the May 15
following the date of this Indenture, and for so long as Notes remain
outstanding, the Trustee shall mail to the Holders of the Notes a brief
report dated as of such reporting date that complies with TIA Section 313(a)
(but if no event described in TIA Section 313(a) has occurred within the 12
months preceding the reporting date, no report need be transmitted). The
Trustee also shall comply with TIA Section 313(b)(2). The Trustee shall also
transmit by mail all reports as required by TIA Section 313(c).
A copy of each report at the time of its mailing to the Holders of
Notes shall be mailed to the Company and filed with the Commission and each
stock exchange on which the Notes are listed in accordance with TIA
Section 313(d). The Company shall promptly notify the Trustee when the Notes
are listed on any stock exchange.
<PAGE>
56
Section 7.07 Compensation and Indemnity
The Company shall pay to the Trustee from time to time reasonable
compensation for its acceptance of this Indenture and services hereunder.
The Trustee's compensation shall not be limited by any law on compensation of
a trustee of an express trust. The Company shall reimburse the Trustee
promptly upon request for all reasonable disbursements, advances and expenses
incurred or made by it in addition to the compensation for its services.
Such expenses shall include the reasonable compensation, disbursements and
expenses of the Trustee's agents and counsel.
The Company shall indemnify the Trustee against any and all losses,
liabilities or expenses (including reasonable attorneys' fees) incurred by it
arising out of or in connection with the acceptance or administration of its
duties under this Indenture, including the costs and expenses of enforcing
this Indenture against the Company (including this Section 7.07) and
defending itself against any claim (whether asserted by the Company or any
Holder or any other Person) or liability in connection with the exercise or
performance of any of its powers or duties hereunder, except to the extent
any such loss, liability or expense may be attributable to its negligence or
bad faith. The Trustee shall notify the Company promptly of any claim for
which it may seek indemnity. Failure by the Trustee to so notify the Company
shall not relieve the Company of its obligations hereunder. The Company
shall defend the claim and the Trustee shall cooperate in the defense. The
Trustee may have separate counsel and the Company shall pay the reasonable
fees and expenses of such counsel. The Company need not pay for any
settlement made without its consent, which consent shall not be unreasonably
withheld.
The obligations of the Company under this Section 7.07 shall
survive the satisfaction and discharge of this Indenture.
To secure the Company's payment obligations in this Section, the
Trustee shall have a Lien prior to the Notes on all money or property held or
collected by the Trustee, except that held in trust to pay principal and
interest on particular Notes. Such Lien shall survive the satisfaction and
discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event
of Default specified in Sections 6.01(h) or 6.01(i) hereof occurs, the
expenses and the compensation for the services (including the fees and
expenses of its agents and counsel) are intended to constitute expenses of
administration under any Bankruptcy Law.
The Trustee shall comply with the provisions of TIA Section 313(b)(2)
to the extent applicable.
Section 7.08 Replacement of Trustee
A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section.
The Trustee may resign in writing at any time and be discharged
from the trust hereby created by so notifying the Company. The Holders of
<PAGE>
57
Notes of a majority in principal amount of the then outstanding Notes may
remove the Trustee by so notifying the Trustee and the Company in writing.
The Company may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an order
for relief is entered with respect to the Trustee under any Bankruptcy
Law;
(c) a Custodian or public officer takes charge of the Trustee or
its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office,
the Holders of a majority in principal amount of the then outstanding Notes
may appoint a successor Trustee to replace the successor Trustee appointed by
the Company.
If a successor Trustee does not take office within 60 days after
the retiring Trustee resigns or is removed, the retiring Trustee, the
Company, or the Holders of Notes of at least 10% in principal amount of the
then outstanding Notes may petition any court of competent jurisdiction for
the appointment of a successor Trustee.
If the Trustee, after written request by any Holder of a Note who
has been a Holder of a Note for at least six months, fails to comply with
Section 7.10, such Holder of a Note may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and
the successor Trustee shall have all the rights, powers and duties of the
Trustee under this Indenture. The successor Trustee shall mail a notice of
its succession to Holders of the Notes. The retiring Trustee shall promptly
transfer all property held by it as Trustee to the successor Trustee;
provided all sums owing to the Trustee hereunder have been paid and subject
to the Lien provided for in Section 7.07 hereof. Notwithstanding replacement
of the Trustee pursuant to this Section 7.08, the Company's obligations under
Section 7.07 hereof shall continue for the benefit of the retiring Trustee.
Section 7.09 Successor Trustee by Merger, etc.
If the Trustee consolidates, merges or converts into, or transfers
all or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act shall be the
successor Trustee.
Section 7.10 Eligibility; Disqualification
There shall at all times be a Trustee hereunder that is a
corporation organized and doing business under the laws of the United States
of America or of any state thereof that is authorized under such laws to
exercise corporate trustee power, that is subject to supervision or
<PAGE>
58
examination by federal or state authorities and that has a combined capital
and surplus of at least $50,000,000 as set forth in its most recent published
annual report of condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA Section 310(a)(1), (2) and (5). The Trustee is subject to
TIA Section 310(b).
Section 7.11 Preferential Collection of Claims Against Company
The Trustee is subject to TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance
The Company may, at the option of its Board of Directors evidenced
by a resolution set forth in an Officers' Certificate, at any time, elect to
have either Section 8.02 or 8.03 hereof be applied to all outstanding Notes
upon compliance with the conditions set forth below in this Article 8.
Section 8.02 Legal Defeasance and Discharge
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Company shall, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, be deemed to
have been discharged from its obligations with respect to all outstanding
Notes and Subsidiary Guarantees on the date the conditions set forth below
are satisfied (hereinafter, "Legal Defeasance"). For this purpose, Legal
Defeasance means that the Company shall be deemed to have paid and discharged
the entire Indebtedness represented by the outstanding Notes and the
Subsidiary Guarantors shall be deemed to have paid and discharged the entire
Indebtedness represented by the outstanding Subsidiary Guarantees, which
shall thereafter be deemed to be "outstanding" only for the purposes of
Section 8.05 hereof and the other Sections of this Indenture referred to in
(a) and (b) below, and to have satisfied all its other obligations under such
Notes, such Subsidiary Guarantees and this Indenture (and the Trustee, on
demand of and at the expense of the Company, shall execute proper instruments
acknowledging the same), except for the following provisions which shall
survive until otherwise terminated or discharged hereunder: (a) the rights
of Holders of outstanding Notes to receive solely from the trust fund
described in Section 8.05 hereof, and as more fully set forth in such
Section, payments in respect of the principal of, premium, if any, and
interest on such Notes when such payments are due, (b) the Company's
obligations with respect to such Notes under Article 2 and Section 4.02
hereof, (c) the rights, powers, trusts, duties and immunities of the Trustee
hereunder and the Company's obligations in connection therewith and (d) this
Article 8. Subject to compliance with this Article 8, the Company may
exercise its option under this Section 8.02 notwithstanding the prior
exercise of its option under Section 8.03 hereof.
<PAGE>
59
Section 8.03 Covenant Defeasance
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, subject to the satisfaction of the
conditions set forth in Section 8.04 hereof, the Company be released from its
obligations under Sections 4.03, 4.04, 4.05, 4.07, 4.08, 4.09, 4.10, 4.11,
4.12, 4.13, 4.14, 4.15, 4.16 and 5.01 hereof and the Subsidiary Guarantors
shall be released from their obligations under Section 10.03(b) hereof, in
each case on and after the date the conditions set forth below are satisfied
(hereinafter, "Covenant Defeasance"), and the Notes and the Subsidiary
Guarantees shall thereafter be deemed not "outstanding" for the purposes of
any direction, waiver, consent or declaration or act of Holders (and the
consequences of any thereof) in connection with such covenants, but shall
continue to be deemed "outstanding" for all other purposes hereunder (it
being understood that such Notes shall not be deemed outstanding for
accounting purposes). For this purpose, Covenant Defeasance means that, with
respect to the outstanding Notes, the Company may omit to comply with and
shall have no liability in respect of any term, condition or limitation set
forth in any such covenant, whether directly or indirectly, by reason of any
reference elsewhere herein to any such covenant or by reason of any reference
in any such covenant to any other provision herein or in any other document
and such omission to comply shall not constitute a Default or an Event of
Default under Section 6.01 hereof, but, except as specified above, the
remainder of this Indenture and such Notes shall be unaffected thereby. In
addition, upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03 hereof, subject to the satisfaction of the
conditions set forth in Section 8.04 hereof, Sections 6.01(e) through 6.01(g)
hereof shall not constitute Events of Default.
Section 8.04 Conditions to Legal or Covenant Defeasance
The following shall be the conditions to the application of either
Section 8.02 or 8.03 hereof to the outstanding Notes:
In order to exercise either Legal Defeasance or Covenant
Defeasance:
(a) the Company must irrevocably deposit with the Trustee, in
trust, for the benefit of the Holders, cash in United States dollars,
non-callable Government Securities, or a combination thereof, in such
amounts as will be sufficient, in the opinion of a nationally recognized
firm of independent public accountants, to pay the principal of, premium
and Additional Interest, if any, and interest on the outstanding Notes
on the stated date for payment thereof or on the applicable redemption
date, as the case may be, and the Company must specify whether the Notes
are being defeased to maturity or to a particular redemption date;
(b) in the case of an election under Section 8.02 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel in the
United States reasonably acceptable to the Trustee confirming that (A)
the Company has received from, or there has been published by, the
Internal Revenue Service a ruling or (B) since the date of this
Indenture, there has been a change in the applicable federal income tax
law, in either case to the effect that, and based thereon such Opinion
of Counsel shall confirm that, the Holders of the outstanding Notes will
not recognize income, gain or loss for federal income tax purposes as a
result of such Legal Defeasance and will be subject to federal income
tax on the same amounts, in the same manner and at the same times as
would have been the case if such Legal Defeasance had not occurred;
<PAGE>
60
(c) in the case of an election under Section 8.03 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel in the
United States reasonably acceptable to the Trustee confirming that the
Holders of the outstanding Notes will not recognize income, gain or loss
for federal income tax purposes as a result of such Covenant Defeasance
and will be subject to federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such
Covenant Defeasance had not occurred;
(d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of
Default resulting from the incurrence of Indebtedness all or a portion
of the proceeds of which will be used to defease the Notes pursuant to
this Article 8 concurrently with such incurrence) or insofar as Sections
6.01(h) or 6.01(i) hereof is concerned, at any time in the period ending
on the 91st day after the date of deposit;
(e) such Legal Defeasance or Covenant Defeasance shall not result
in a breach or violation of, or constitute a default under, any material
agreement or instrument (other than this Indenture) to which the Company
or any of its Subsidiaries is a party or by which the Company or any of
its Subsidiaries is bound;
(f) the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that after the 91st day following the deposit, the
trust funds will not be subject to the effect of any applicable
bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally;
(g) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with
the intent of preferring the Holders over any other creditors of the
Company or with the intent of defeating, hindering, delaying or
defrauding any other creditors of the Company; and
(h) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for or relating to the Legal Defeasance or the
Covenant Defeasance have been complied with.
Section 8.05 Deposited Money and Government Securities to be Held in Trust;
Other Miscellaneous Provisions
Subject to Section 8.06 hereof, all money and non-callable
Government Securities (including the proceeds thereof) deposited with the
Trustee (or other qualifying trustee, collectively for purposes of this
Section 8.05, the "Trustee") pursuant to Section 8.04 hereof in respect of
the outstanding Notes shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Notes and this Indenture, to the
payment, either directly or through any Paying Agent (including the Company
acting as Paying Agent) as the Trustee may determine, to the Holders of such
Notes of all sums due and to become due thereon in respect of principal,
premium, if any, and interest, but such money need not be segregated from
other funds except to the extent required by law.
<PAGE>
61
The Company shall pay and indemnify the Trustee against any tax,
fee or other charge imposed on or assessed against the cash or non-callable
Government Securities deposited pursuant to Section 8.04 hereof or the
principal and interest received in respect thereof.
Anything in this Article 8 to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the
request of the Company any money or non-callable Government Securities held
by it as provided in Section 8.04 hereof which, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee (which may be the
opinion delivered under Section 8.04(a) hereof), are in excess of the amount
thereof that would then be required to be deposited to effect an equivalent
Legal Defeasance or Covenant Defeasance.
Section 8.06 Repayment to Company
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of, premium,
if any, Additional Interest or interest on any Note and remaining unclaimed
for two years after such principal, and premium, if any, Additional Interest,
if any, or interest has become due and payable shall be paid to the Company
on its request or (if then held by the Company) shall be discharged from such
trust; and the Holder of such Note shall thereafter, as a creditor, look only
to the Company for payment thereof, and all liability of the Trustee or such
Paying Agent with respect to such trust money, and all liability of the
Company as trustee thereof, shall thereupon cease; provided, however, that
the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Company cause to be published once, in
the New York Times and The Wall Street Journal (national edition), notice
that such money remains unclaimed and that, after a date specified therein,
which shall not be less than 30 days from the date of such notification or
publication, any unclaimed balance of such money then remaining will be
repaid to the Company.
Section 8.07 Reinstatement
If the Trustee or Paying Agent is unable to apply any United States
dollars or non-callable Government Securities in accordance with Section 8.02
or 8.03 hereof, as the case may be, by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise
prohibiting such application, then the Company's obligations under this
Indenture and the Notes shall be revived and reinstated as though no deposit
had occurred pursuant to Section 8.02 or 8.03 hereof until such time as the
Trustee or Paying Agent is permitted to apply all such money in accordance
with Section 8.02 or 8.03 hereof, as the case may be; provided, however,
that, if the Company makes any payment of principal of, premium, if any, or
interest on any Note following the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of such Notes to
receive such payment from the money held by the Trustee or Paying Agent.
<PAGE>
62
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01 Without Consent of Holders of Notes
Notwithstanding Section 9.02 of this Indenture, the Company, the
Subsidiary Guarantors and the Trustee may amend or supplement this Indenture,
the Subsidiary Guarantees or the Notes without the consent of any Holder of a
Note:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Notes in addition to or in place
of certificated Notes;
(c) to provide for the assumption of the Company's obligations to
the Holders of the Notes in the case of a merger or consolidation
pursuant to Article 5 hereof;
(d) to provide for additional Subsidiary Guarantors as set forth
in Section 4.13 or for the release or assumption of a Subsidiary
Guarantee in compliance with this Indenture;
(e) to make any change that would provide any additional rights or
benefits to the Holders of the Notes or that does not adversely affect
the legal rights hereunder of any Holder of the Note; or
(f) to comply with requirements of the Commission in order to
effect or maintain the qualification of this Indenture under the TIA.
Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or
supplemental Indenture, and upon receipt by the Trustee of the documents
described in Section 7.02 hereof, the Trustee shall join with the Company in
the execution of any amended or supplemental Indenture authorized or
permitted by the terms of this Indenture and to make any further appropriate
agreements and stipulations that may be therein contained, but the Trustee
shall not be obligated to enter into such amended or supplemental Indenture
that affects its own rights, duties or immunities under this Indenture or
otherwise.
Section 9.02 With Consent of Holders of Notes
Except as provided below in this Section 9.02, the Company and the
Trustee may amend or supplement this Indenture (including Sections 4.15 and
4.16 hereof), the Notes or the Subsidiary Guarantees with the consent of the
Holders of at least a majority in principal amount of the Notes then
outstanding (including, without limitation, consents obtained in connection
with a tender offer or exchange offer for the Notes), and, subject to
Sections 6.04 and 6.07 hereof, any existing Default or Event of Default
(other than a Default or Event of Default in the payment of the principal of,
premium, if any, or interest on the Notes, except a payment default resulting
from an acceleration that has been rescinded) or compliance with any
provision of this Indenture or the Notes may be waived with the consent of
the Holders of a majority in principal amount of the then outstanding Notes
(including consents obtained in connection with a tender offer or exchange
offer for the Notes).
<PAGE>
63
Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or
supplemental Indenture, and upon the filing with the Trustee of evidence
satisfactory to the Trustee of the consent of the Holders of Notes as
aforesaid, and upon receipt by the Trustee of the documents described in
Section 7.02 hereof, the Trustee shall join with the Company in the execution
of such amended or supplemental Indenture unless such amended or supplemental
Indenture affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise, in which case the Trustee may in its discretion, but
shall not be obligated to, enter into such amended or supplemental Indenture.
It shall not be necessary for the consent of the Holders of Notes
under this Section 9.02 to approve the particular form of any proposed
amendment or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this Section becomes
effective, the Company shall mail to the Holders of Notes affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure
of the Company to mail such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such amended or
supplemental Indenture or waiver. Subject to Sections 6.04 and 6.07 hereof,
the Holders of a majority in aggregate principal amount of the Notes then
outstanding may waive compliance in a particular instance by the Company with
any provision of this Indenture or the Notes. However, without the consent
of each Holder affected, an amendment or waiver may not (with respect to any
Notes held by a non-consenting Holder):
(a) reduce the principal amount of Notes whose Holders must
consent to an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of
any Note or alter or waive any of the provisions with respect to
the redemption of the Notes, except for Sections 4.15 and 4.16
hereof, which may be amended in accordance with the first paragraph
of this Section 9.02;
(c) reduce the rate of or change the time for payment of
interest, including default interest, on any Note;
(d) waive a Default or Event of Default in the payment of
principal of or premium, if any, or interest on the Notes (except a
rescission of acceleration of the Notes by the Holders of at least
a majority in aggregate principal amount of the then outstanding
Notes and a waiver of the payment default that resulted from such
acceleration);
(e) make any Note payable in money other than that stated in
the Notes;
(f) make any change in the provisions of this Indenture
relating to waivers of past Defaults or the rights of Holders of
Notes to receive payments of principal of, premium or Additional
Interest, if any, or interest on the Notes;
(g) waive a redemption payment with respect to any Note
(other than a payment required by Sections 4.15 or 4.16 hereof); or
<PAGE>
64
(h) make any change in Section 6.04 or 6.07 hereof or in the
foregoing amendment and waiver provisions.
Section 9.03 Compliance with Trust Indenture Act
Every amendment or supplement to this Indenture or the Notes shall
be set forth in an amended or supplemental Indenture that complies with the
TIA as then in effect.
Section 9.04 Revocation and Effect of Consents
Until an amendment, supplement or waiver becomes effective, a
consent to it by a Holder of a Note is a continuing consent by the Holder of
a Note and every subsequent Holder of a Note or portion of a Note that
evidences the same Indebtedness as the consenting Holder's Note, even if
notation of the consent is not made on any Note. However, any such Holder of
a Note or subsequent Holder of a Note may revoke the consent as to its Note
if the Trustee receives written notice of revocation before the date the
waiver, supplement or amendment becomes effective. An amendment, supplement
or waiver becomes effective in accordance with its terms and thereafter binds
every Holder.
Section 9.05 Notation on or Exchange of Notes
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Company in
exchange for all Notes may issue and the Trustee shall authenticate new Notes
that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Note shall
not affect the validity and effect of such amendment, supplement or waiver.
Section 9.06 Trustee to Sign Amendments, etc.
The Trustee shall sign any amended or supplemental Indenture
authorized pursuant to this Article 9 if the amendment or supplement does not
adversely affect the rights, duties, liabilities or immunities of the
Trustee. In executing any amended or supplemental indenture, the Trustee
shall be entitled to receive indemnity reasonably satisfactory to it and to
receive and (subject to Section 7.01) shall be fully protected in relying
upon, an Officer's Certificate and an Opinion of Counsel stating that the
execution of such amended or supplemental indenture is authorized or
permitted by this Indenture.
ARTICLE 10
SUBSIDIARY GUARANTEES
Section 10.01 Subsidiary Guarantees
Subject to the provisions of this Article 10, each Subsidiary
Guarantor, jointly and severally, hereby unconditionally guarantees to each
Holder of a Note authenticated and delivered by the Trustee and to the
Trustee and its successors and assigns, that: (a) the principal of, and
premium and interest and Additional Interest, if any, on the Notes shall be
duly and punctually paid in full when due, whether at maturity, by
<PAGE>
65
acceleration or otherwise, and interest on overdue principal, and premium, if
any, and (to the extent permitted by law) interest on any interest, if any,
on the Notes and all other obligations of the Company to the Holders or the
Trustee hereunder or under the Notes (including fees, expenses or other)
shall be promptly paid in full or performed, all in accordance with the terms
hereof; and (b) in case of any extension of time of payment or renewal of any
Notes or any of such other obligations, the same shall be promptly paid in
full when due or performed in accordance with the terms of the extension or
renewal, whether at stated maturity, by acceleration or otherwise
(collectively, the "Guarantee Obligations"). Failing payment when due of any
Guarantee Obligation or failing performance of any other obligation of the
Company to the Holders, for whatever reason, each Subsidiary Guarantor shall
be obligated to pay, or to perform or to cause the performance of, the same
immediately. An Event of Default under this Indenture or the Notes shall
constitute an event of default under this Subsidiary Guarantee, and shall
entitle the Trustee or the Holders of Notes to accelerate the Guarantee
Obligations of each Subsidiary Guarantor hereunder in the same manner and to
the same extent as the Obligations of the Company. Each Subsidiary Guarantor
hereby agrees that its Guarantee Obligations hereunder shall be
unconditional, irrespective of the validity, regularity or enforceability of
the Notes or this Indenture, the absence of any action to enforce the same,
any waiver or consent by any Holder of the Notes with respect to any thereof,
the entry of any judgment against the Company, any action to enforce the same
or any other circumstance which might otherwise constitute a legal or
equitable discharge or defense of a Subsidiary Guarantor. Each Subsidiary
Guarantor hereby waives and relinquishes: (a) any right to require the
Trustee, the Holders or the Company (each, a "Benefitted Party") to proceed
against the Company, the Subsidiaries or any other Person or to proceed
against or exhaust any security held by a Benefitted Party at any time or to
pursue any other remedy in any secured party's power before proceeding
against the Subsidiary Guarantors; (b) any defense that may arise by reason
of the incapacity, lack of authority, death or disability of any other Person
or Persons or the failure of a Benefitted Party to file or enforce a claim
against the estate (in administration, bankruptcy or any other proceeding) of
any other Person or Persons; (c) demand, protest and notice of any kind
(except as expressly required by this Indenture), including but not limited
to notice of the existence, creation or incurring of any new or additional
Indebtedness or obligation or of any action or non-action on the part of the
Subsidiary Guarantors, the Company, the Subsidiaries, any Benefitted Party,
any creditor of the Subsidiary Guarantors, the Company or the Subsidiaries or
on the part of any other Person whomsoever in connection with any obligations
the performance of which are hereby guaranteed; (d) any defense based upon an
election of remedies by a Benefitted Party, including but not limited to an
election to proceed against the Subsidiary Guarantors for reimbursement; (e)
any defense based upon any statute or rule of law which provides that the
obligation of a surety must be neither larger in amount nor in other respects
more burdensome than that of the principal; (f) any defense arising because
of a Benefitted Party's election, in any proceeding instituted under the
Bankruptcy Law, of the application of Section 1111(b)(2) of the Bankruptcy
Code; and (g) any defense based on any borrowing or grant of a security
interest under Section 364 of the Bankruptcy Code. The Subsidiary Guarantors
hereby covenant that, except as otherwise provided therein, the Subsidiary
Guarantees shall not be discharged except by payment in full of all Guarantee
Obligations, including the principal, premium, if any, and interest on the
Notes and all other costs provided for under this Indenture or as provided in
Section 8.01.
If any Holder or the Trustee is required by any court or otherwise
to return to either the Company or the Subsidiary Guarantors, or any trustee
or similar official acting in relation to either the Company or the
Subsidiary Guarantors, any amount paid by the Company or the Subsidiary
Guarantors to the Trustee or such Holder, the Subsidiary Guarantees, to the
<PAGE>
66
extent theretofore discharged, shall be reinstated in full force and effect.
Each of the Subsidiary Guarantors agrees that it shall not be entitled to any
right of subrogation in relation to the Holders in respect of any Guarantee
Obligations hereby until payment in full of all such obligations. Each
Subsidiary Guarantor agrees that, as between it, on the one hand, and the
Holders of Notes and the Trustee, on the other hand, (x) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article 6
hereof for the purposes hereof, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the Guarantee
Obligations, and (y) in the event of any acceleration of such obligations as
provided in Article 6 hereof, such Guarantee Obligations (whether or not due
and payable) shall forthwith become due and payable by such Subsidiary
Guarantor for the purpose of the Subsidiary Guarantee.
Section 10.02 Execution and Delivery of Subsidiary Guarantees
To evidence the Subsidiary Guarantees set forth in Section 10.01
hereof, each of the Subsidiary Guarantors agrees that a notation of the
Subsidiary Guarantees substantially in the form included in Exhibit A hereto
shall be endorsed on each Note authenticated and delivered by the Trustee and
that this Indenture shall be executed on behalf of the Subsidiary Guarantors
by the Chairman of the Board, any Vice Chairman, the President or one of the
Vice Presidents of the Subsidiary Guarantors, under a facsimile of its seal
reproduced on this Indenture and attested to by an Officer other than the
Officer executing this Indenture.
Each of the Subsidiary Guarantors agree that the Subsidiary
Guarantees set forth in this Article 10 will remain in full force and effect
and apply to all the Notes notwithstanding any failure to endorse on each
Note a notation of the Subsidiary Guarantees.
If an Officer whose facsimile signature is on a Note no longer
holds that office at the time the Trustee authenticates the Note on which the
Subsidiary Guarantees are endorsed, the Subsidiary Guarantees shall be valid
nevertheless.
The delivery of any Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Subsidiary Guarantees
set forth in this Indenture on behalf of the Subsidiary Guarantors.
Section 10.03 Subsidiary Guarantors May Consolidate, etc., on Certain Terms
(a) Nothing contained in this Indenture or in the Notes shall
prevent any consolidation or merger of a Subsidiary Guarantor with or into
the Company or another Subsidiary Guarantor, or shall prevent the transfer of
all or substantially all of the assets of a Subsidiary Guarantor to the
Company or another Subsidiary Guarantor. Upon any such consolidation,
merger, transfer or sale, the Subsidiary Guarantee of such Subsidiary
Guarantor shall no longer have any force or effect.
(b) Except for a merger or consolidation in which a Subsidiary
Guarantor is sold and its Subsidiary Guarantee is released in compliance with
the provisions of Section 10.04, no Subsidiary Guarantor shall, in a single
transaction or series of related transactions, consolidate or merge with or
into (whether or not such Subsidiary Guarantor is the surviving corporation),
or sell, assign, transfer, lease, convey or otherwise dispose of all or
substantially all of its properties or assets in one or more related
transactions, to another corporation, Person or entity other than the Company
<PAGE>
67
or another Subsidiary Guarantor unless (i) the entity or Person formed by or
surviving any such consolidation or merger (if other than such Subsidiary
Guarantor) or the entity or Person to which such sale, assignment, transfer,
lease, conveyance or other disposition shall have been made assumes all the
Guarantee Obligations of such Subsidiary Guarantor under its Subsidiary
Guarantee and this Indenture pursuant to a supplemental indenture in form and
substance reasonably satisfactory to the Trustee; (ii) immediately after such
transaction no Default or Event of Default exists; (iii) unless such merger
or consolidation involves only Restricted Subsidiaries and the surviving
Person is a Subsidiary Guarantor, the Company would be able to, at the time
of such transaction and after giving pro forma effect thereto as if such
transaction had occurred at the beginning of the applicable four-quarter
period, be permitted to incur at least $1.00 of additional Indebtedness
pursuant to the Interest Coverage Ratio test set forth in the first paragraph
of Section 4.07; and (iv) such Subsidiary Guarantor shall have delivered to
the Trustee an Officers' Certificate and an Opinion of Counsel addressed to
the Trustee, each stating that such consolidation, merger, sale, assignment,
transfer, lease, conveyance or disposition and such supplemental indenture,
if any, comply with this Indenture and that such supplemental indenture is
enforceable. In case of any such consolidation, merger or transfer of assets
and upon the assumption by the successor corporation, by supplemental
indenture, executed and delivered to the Trustee and satisfactory in form to
the Trustee, of the Subsidiary Guarantees endorsed upon the Notes and the due
and punctual performance of all of the covenants and conditions of this
Indenture to be performed by such Guarantor, such successor corporation shall
succeed to and be substituted for such Subsidiary Guarantor with the same
effect as if it had been named herein as a Subsidiary Guarantor. Such
successor corporation thereupon may cause to be signed any or all of the
Subsidiary Guarantees to be endorsed upon all of the Notes issuable hereunder
which theretofore shall not have been signed by the Company and delivered to
the Trustee. All the Subsidiary Guarantees so issued shall in all respects
have the same legal rank and benefit under this Indenture as the Subsidiary
Guarantees theretofore and thereafter issued in accordance with the terms of
this Indenture as though all of such Subsidiary Guarantees had been issued at
the date of the execution hereof.
(c) The Trustee, subject to the provisions of Section 12.04
hereof, shall be entitled to receive an Officers' Certificate and an Opinion
of Counsel as conclusive evidence that any such consolidation, merger, sale
or conveyance, and any such assumption of Guarantee Obligations, comply with
the provisions of this Section 10.03. Such Officers' Certificate and Opinion
of Counsel shall comply with the provisions of Section 12.05.
Section 10.04 Releases
Notwithstanding Section 10.03(b), in the event of (a) a sale or
other disposition of all or substantially all of the assets of any Subsidiary
Guarantor, by way of merger, consolidation or otherwise, or a sale or other
disposition of all (or substantially all) of the Capital Stock of any
Subsidiary Guarantor, or (b) a designation of a Subsidiary Guarantor as an
Unrestricted Subsidiary, which sale or other disposition or which designation
otherwise complies with the terms of this Indenture, then such Subsidiary
Guarantor (in the event of a sale or other disposition, by way of such a
merger, consolidation or otherwise, of all or substantially all of the
Capital Stock of such Subsidiary Guarantor or in the event of a designation
of such Subsidiary Guarantor as an Unrestricted Subsidiary) or the
corporation acquiring the property (in the event of a sale or other
disposition of all or substantially all of the assets of such Subsidiary
Guarantor) shall be released from and relieved of any Guarantee Obligations
under its Subsidiary Guarantee; provided that the Net Cash Proceeds from such
sale or other disposition are applied (or are held for application) in
<PAGE>
68
accordance with the provisions of Section 4.15 hereof. Upon delivery by the
Company to the Trustee of an Officer's Certificate and Opinion of Counsel, to
the effect that such sale or other disposition or that such designation was
made by the Company in accordance with the provisions of this Indenture,
including without limitation Sections 4.08 or 4.09 hereof, as applicable, the
Trustee shall execute any documents reasonably required in order to evidence
the release of any such Subsidiary Guarantor from its Guarantee Obligations
under its Subsidiary Guarantee. Except as provided in Section 10.03(a), any
Subsidiary Guarantor not released from its Guarantee Obligations under its
Subsidiary Guarantee shall remain liable for the full amount of principal of
and interest on the Notes and for the other obligations of any Subsidiary
Guarantor under this Indenture as provided in this Article 10.
Section 10.05 Limitation of Subsidiary Guarantor's Liability
Each Subsidiary Guarantor, and by its acceptance hereof each
Holder, hereby confirms that it is the intention of all such parties that the
Guarantee by such Subsidiary Guarantor pursuant to its Subsidiary Guarantee
not constitute a fraudulent transfer or conveyance for purposes of any
Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent
Transfer Act or any similar federal or state law. To effectuate the
foregoing intention, the Holders and such Subsidiary Guarantor hereby
irrevocably agree that the Guarantee Obligations of such Subsidiary Guarantor
under this Article 10 shall be limited to the maximum amount as will, after
giving effect to all other contingent and fixed liabilities of such
Subsidiary Guarantor and after giving effect to any collections from or
payments made by or on behalf of any other Subsidiary Guarantor in respect of
the Guarantee Obligations of such other Subsidiary Guarantor under this
Article 10, result in the Guarantee Obligations of such Subsidiary Guarantor
under the Subsidiary Guarantee of such Subsidiary Guarantor not constituting
a fraudulent transfer or conveyance.
Section 10.06 Application of Certain Terms and Provisions to the Subsidiary
Guarantors
(a) For purposes of any provision of this Indenture which provides
for the delivery by any Subsidiary Guarantor of an Officers' Certificate
and/or an Opinion of Counsel, the definitions of such terms in Section 1.01
shall apply to such Subsidiary Guarantor as if references therein to the
Company were references to such Subsidiary Guarantor.
(b) Any notice or demand which by any provision of this Indenture
is required or permitted to be given or served by the Trustee or by the
holders of Notes to or on any Subsidiary Guarantor may be given or served as
described in Section 12.02 as if references therein to the Company were
references to such Subsidiary Guarantor.
(c) Upon any demand, request or application by any Subsidiary
Guarantor to the Trustee to take any action under this Indenture, such
Subsidiary Guarantor shall furnish to the Trustee such certificates and
opinions as are required in Section 12.04 hereof as if all references therein
to the Company were references to such Subsidiary Guarantor.
Section 10.07 Subordination of Subsidiary Guarantees
The obligations of each Subsidiary Guarantor under its Subsidiary
Guarantee pursuant to this Article 10 is subordinated in right of payment to
the prior payment in full in cash of all Senior Indebtedness of such
Subsidiary Guarantor on the same basis as the Notes are subordinated to
Senior Indebtedness of the Company. For the purposes of the foregoing
sentence, the Trustee and the Holders shall have the right to receive and/or
<PAGE>
69
retain payments by any of the Subsidiary Guarantors only at such times as
they may receive and/or retain payments in respect of Notes pursuant to this
Indenture, including Article 11 hereof. In the event that the Trustee
receives any Subsidiary Guarantor payment at a time when the Trustee has
actual knowledge that such payment is prohibited by the foregoing sentence,
such Subsidiary Guarantor payment shall be paid over and delivered to the
holders of the Senior Indebtedness of such Subsidiary Guarantor remaining
unpaid, to the extent necessary to pay in full all such Senior Indebtedness.
In the event that a Holder receives any Subsidiary Guarantor payment at a
time when such payment is prohibited by the foregoing sentence, such
Subsidiary Guarantor payment shall be paid over and delivered to the holders
of the Senior Indebtedness of such Subsidiary Guarantor remaining unpaid, to
the extent necessary to pay in full all such Senior Indebtedness.
Each Holder of a Note by its acceptance thereof (a) agrees to and shall
be bound by the provisions of this Section 10.07, (b) authorizes and directs
the Trustee on the Holder's behalf to take such action as may be necessary
and appropriate to effectuate the subordination so provided, and (c) appoints
the Trustee as the Holder's attorney-in-fact for any and all such purposes.
ARTICLE 11
SUBORDINATION
Section 11.01 Agreement to Subordinate
The Company agrees, and each Holder by accepting a Note agrees, that the
payment of principal of, premium, if any and interest, including Additional
Interest, on the Notes is subordinated in right of payment, to the extent and
in the manner provided in this Article, to the prior payment in full in cash
of all Senior Indebtedness, whether outstanding on the date hereof or
hereafter incurred, and that the subordination provisions in Article 11 and
Section 10.07 are for the benefit of the holders of such Senior Indebtedness.
Section 11.02 Liquidation; Dissolution; Bankruptcy
Upon any distribution to creditors of the Company in a liquidation or
dissolution of the Company or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to the Company or its property,
an assignment for the benefit of creditors or any marshalling of the
Company's assets and liabilities, the holders of Senior Indebtedness will be
entitled to receive payment in full in cash of all Obligations due in respect
of such Senior Indebtedness (including Accrued Bankruptcy Interest) before
the Holders of Notes will be entitled to receive any payment with respect to
the Notes, and until all Obligations with respect to Senior Indebtedness are
paid in full in cash, any distribution to which the Holders of Notes would be
entitled shall be made to the holders of Senior Indebtedness (except that
Holders of Notes may receive Permitted Junior Securities and payments made
from the trust described Article 8 so long as the funding of such trust did
not violate the provisions of this Article 11).
Section 11.03 Default on Designated Senior Indebtedness
The Company also may not make any payment upon or in respect of the
Notes (except in Permitted Junior Securities or from the trust described in
Article 8 so long as the funding of such trust did not violate the provisions
of this Article 11) if (i) a default in the payment of the principal of,
<PAGE>
70
premium, if any, or interest on Designated Senior Indebtedness occurs and is
continuing beyond any applicable period of grace or (ii) any other default
occurs and is continuing with respect to Designated Senior Indebtedness that
permits holders of the Designated Senior Indebtedness as to which such
default relates to accelerate its maturity and the Trustee receives a notice
of such default (a "Payment Blockage Notice") from the Company or the holders
of any Designated Senior Indebtedness or a representative acting on behalf of
such holders. Payments on the Notes may and shall be resumed (a) in the case
of a payment default, upon the date on which such default is cured or waived
in writing and (b) in case of a nonpayment default, the earlier of the date
on which such nonpayment default is cured or waived in writing or 179 days
after the date on which the applicable Payment Blockage Notice is received,
unless the maturity of any Designated Senior Indebtedness has been accelerat-
ed. No new period of payment blockage under clause (ii) above may be
commenced unless and until 360 days have elapsed since the effectiveness of
the immediately prior Payment Blockage Notice. No nonpayment default that
existed or was continuing on the date of delivery of any Payment Blockage
Notice to the Trustee shall be, or be made, the basis for a subsequent
Payment Blockage Notice unless such default has been cured or waived for a
period of 90 consecutive days.
Section 11.04 Acceleration of Notes
If payment of the Notes is accelerated because of an Event of
Default, the Company shall promptly notify holders of Senior Indebtedness of
the acceleration.
Section 11.05 When Distribution Must be Paid Over
In the event that the Trustee or any Holder receives any payment of
any Obligations with respect to the Securities at a time when the Trustee or
such Holder, as applicable, has actual knowledge that such payment is
prohibited by Section 11.03 hereof, such payment shall be held by the Trustee
or such Holder, in trust for the benefit of, and shall be paid forthwith over
and delivered, upon written request, to, the holders of Senior Indebtedness
as their interests may appear or their Representative under the indenture or
other agreement (if any) pursuant to which Senior Indebtedness may have been
issued, as their respective interests may appear, for application to the
payment of all Obligations with respect to Senior Indebtedness remaining
unpaid to the extent necessary to pay such Obligations in full in accordance
with their terms, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Indebtedness.
With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform only such obligations on the part of the Trustee as are
specifically set forth in this Article 11, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to
owe any fiduciary duty to the holders of Senior Indebtedness, and shall not
be liable to any such holders if the Trustee shall pay over or distribute to
or on behalf of Holders or the Company or any other Person money or assets to
which any holders of Senior Indebtedness shall be entitled by virtue of this
Article 11, except if such payment is made as a result of the willful
misconduct or gross negligence of the Trustee.
Section 11.06 Notice by Company
The Company shall promptly notify the Trustee and the Paying Agent
of any facts known to the Company that would cause a payment of any
<PAGE>
71
Obligations with respect to the Notes to violate this Article, but failure to
give such notice shall not affect the subordination of the Notes to the
Senior Indebtedness as provided in this Article.
Section 11.07 Subrogation
After all Senior Indebtedness is paid in full and until the Notes
are paid in full, Holders shall be subrogated (equally and ratably with all
other Indebtedness pari passu with the Notes) to the rights of holders of
Senior Indebtedness to receive distributions applicable to Senior
Indebtedness to the extent that distributions otherwise payable to the
Holders have been applied to the payment of Senior Indebtedness. A
distribution made under this Article to holders of Senior Indebtedness that
otherwise would have been made to Holders is not, as between the Company and
Holders, a payment by the Company on the Notes.
Section 11.08 Relative Rights
This Article defines the relative rights of Holders and holders of
Senior Indebtedness. Nothing in this Indenture shall: (1) impair, as between
the Company and Holders, the obligation of the Company, which is absolute and
unconditional, to pay principal of and interest on the Notes in accordance
with their terms; (2) affect the relative rights of Holders and creditors of
the Company other than their rights in relation to holders of Senior
Indebtedness; or (3) prevent the Trustee or any Holder from exercising its
available remedies upon a Default or Event of Default, subject to the rights
of holders and owners of Senior Indebtedness to receive distributions and
payments otherwise payable to Holders.
If the Company fails because of this Article to pay principal of or
interest on a Note on the due date, the failure is still a Default or Event
of Default.
Section 11.09 Subordination May Not Be Impaired by Company
No right of any holder of Senior Indebtedness to enforce the
subordination of the Indebtedness evidenced by the Notes shall be impaired by
any act or failure to act by the Company or any Holder or by the failure of
the Company or any Holder to comply with this Indenture.
Section 11.10 Distribution or Notice to Representative
Whenever a distribution is to be made or a notice given to holders
of Senior Indebtedness, the distribution may be made and the notice given to
their Representative.
Upon any payment or distribution of assets of the Company referred
to in this Article 11, the Trustee and the Holders shall be entitled to rely
upon any order or decree made by any court of competent jurisdiction or upon
any certificate of such Representative or of the liquidating trustee or agent
or other Person making any distribution to the Trustee or to the Holders for
the purpose of ascertaining the Persons entitled to participate in such
distribution, the holders of the Senior Indebtedness and other Indebtedness
of the Company, the amount thereof or payable thereon, the amount or amounts
paid or distributed thereon and all other facts pertinent thereto or to this
Article 11.
<PAGE>
72
Section 11.11 Rights of Trustee and Paying Agent
Notwithstanding the provisions of this Article 11 or any other
provision of this Indenture, the Trustee shall not be charged with knowledge
of the existence of any facts that would prohibit the making of any payment
or distribution by the Trustee, and the Trustee and the Paying Agent may
continue to make payments on the Notes, unless the Trustee shall have
received at its Corporate Trust Office written notice of facts that would
cause the payment of any Obligations with respect to the Notes to violate
this Article. Only the Company or a Representative may give the notice.
Nothing in this Article 11 shall impair the claims of, or payments to, the
Trustee under or pursuant to Section 7.07 hereof.
The Trustee shall be entitled to rely on the delivery to it of a
written notice by a person representing himself to be a holder of Senior
Indebtedness (or a Representative on behalf of such holder) to establish that
such notice has been given by a holder of Senior Indebtedness or a
Representative on behalf of such holder. In the event that the Trustee
determines in good faith that further evidence is required with respect to
the right of any person who is a holder of Senior Indebtedness to participate
in any payment or distribution pursuant to this Article, the Trustee may
request such person to furnish evidence to the reasonable satisfaction of the
Trustee as to the amount of Senior Indebtedness held by such person, the
extent to which such person is entitled to participate in such payment or
distribution and any other facts pertinent to the rights of such person under
this Article, and if such evidence is not furnished the Trustee may defer any
payment to such person pending judicial determination as to the right of such
person to receive such payment or until such time as the Trustee shall be
otherwise satisfied as to the right of such person to receive such payment.
The Trustee in its individual or any other capacity may hold Senior
Indebtedness with the same rights it would have if it were not Trustee. Any
Agent may do the same with like rights.
Section 11.12 Authorization to Effect Subordination
Each Holder of a Note by the Holder's acceptance thereof authorizes
and directs the Trustee on the Holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination as provided in this
Article 11, and appoints the Trustee to act as the Holder's attorney-in-fact
for any and all such purposes. If the Trustee does not file a proper proof
of claim or proof of debt in the form required in any proceeding referred to
in Section 6.09 hereof at least 30 days before the expiration of the time to
file such claim, the agent or agents under the Credit Agreement are hereby
authorized to file an appropriate claim for and on behalf of the Holders of
the Notes.
Section 11.13 Amendments
The provisions of this Article 11 shall not be amended or modified
in a manner adverse to the holder of Designated Senior Indebtedness without
the written consent of the holders of Designated Senior Indebtedness.
<PAGE>
73
ARTICLE 12
MISCELLANEOUS
Section 12.01 Trust Indenture Act Controls
If any provision of this Indenture limits, qualifies or conflicts
with the duties imposed by the TIA, the imposed duties shall control.
Section 12.02 Notices
Any notice or communication by the Company or the Trustee to the
others is duly given if in writing and delivered in Person or mailed by first
class mail (registered or certified, return receipt requested), telex,
telecopier or overnight air courier guaranteeing next day delivery, to the
others' address:
If to the Company:
Foodmaker, Inc.
9330 Balboa Avenue
San Diego, CA 92123
Telephone No.: (619) 571-2121
Telecopier No.: (619) 571-2101
Attn: Treasurer
If to the Trustee:
First Union National Bank
765 Broad Street
Second Floor
Newark, N.J. 07102
Telephone No.: (973) 430-4468
Telecopier No.: (973) 430-2117
Attention: Corporate Trust Department
The Company or the Trustee, by notice to the others may designate
additional or different addresses for subsequent notices or communications.
All notices and communications (other than those sent to Holders)
shall be deemed to have been duly given: at the time delivered by hand, if
personally delivered; when answered back, if telexed; when receipt
acknowledged, if telecopied; and the next Business Day after timely delivery
to the courier, if sent by overnight air courier guaranteeing next day
delivery.
Any notice or communication to a Holder shall be mailed by first
class mail, certified or registered, return receipt requested, or by
overnight air courier guaranteeing next day delivery to its address shown on
the register kept by the Registrar. Any notice or communication shall also
be so mailed to any Person described in TIA Section 313(c), to the extent
required by the TIA. Failure to mail a notice or communication to a Holder or
any defect in it shall not affect its sufficiency with respect to other Holders.
<PAGE>
74
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it shall
mail a copy to the Trustee and each Agent at the same time.
Section 12.03 Communication by Holders of Notes with Other Holders of Notes
Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the Notes. The
Company, the Trustee, the Registrar and anyone else shall have the protection of
TIA Section 312(c).
Section 12.04 Certificate and Opinion as to Conditions Precedent
Upon any request or application by the Company to the Trustee to
take any action under this Indenture, the Company shall furnish to the
Trustee:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set
forth in Section 12.05 hereof) stating that, in the opinion of the
signers, all conditions precedent and covenants, if any, provided for in
this Indenture relating to the proposed action have been satisfied; and
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set
forth in Section 12.05 hereof) stating that, in the opinion of such
counsel, all such conditions precedent and covenants have been
satisfied.
Section 12.05 Statements Required in Certificate or Opinion
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a
certificate provided pursuant to TIA Section 314(a)(4)) shall comply with the
provisions of TIA Section 314(e) and shall include:
(a) a statement that the Person making such certificate or opinion
has read such covenant or condition;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or she has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or
condition has been satisfied; and
(d) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been satisfied; provided,
however, that with respect to matters of fact, an Opinion of Counsel may
rely on an Officers' Certificate or certificate of public officials.
<PAGE>
75
Section 12.06 Rules by Trustee and Agents
The Trustee may make reasonable rules for action by or at a meeting
of Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
Section 12.07 No Personal Liability of Directors, Officers, Employees and
Stockholders
No past, present or future director, officer, employee,
incorporator or stockholder of the Company or the Subsidiary Guarantors, as
such, shall have any liability for any Obligations of the Company or the
Subsidiary Guarantors under the Notes, the Subsidiary Guarantees or this
Indenture or for any claim based on, in respect of, or by reason of, such
Obligations or their creation. Each Holder by accepting a Note waives and
releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes.
Section 12.08 Governing Law
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED
TO CONSTRUE THIS INDENTURE, THE NOTES AND THE SUBSIDIARY GUARANTEES.
Section 12.09 No Adverse Interpretation of Other Agreements
This Indenture may not be used to interpret any other indenture,
loan or debt agreement of the Company or its Subsidiaries or of any other
Person. Any such indenture, loan or debt agreement may not be used to
interpret this Indenture.
Section 12.10 Successors
All agreements of the Company in this Indenture and the Notes shall
bind its successors. All agreements of the Trustee in this Indenture shall
bind its successors.
Section 12.11 Severability
In case any provision in this Indenture or in the Notes shall be
invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
Section 12.12 Counterpart Originals
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
Section 12.13 Table of Contents, Headings, Etc.
The Table of Contents and headings of the Articles and Sections of
this Indenture have been inserted for convenience of reference only, are not
to be considered a part of this Indenture and shall in no way modify or
restrict any of the terms or provisions hereof.
<PAGE>
76
[Signatures on following pages]
<PAGE>
SIGNATURES
Dated as of April 14, 1998 FOODMAKER, INC.
By: CHARLES W. DUDDLES
------------------
Name: Charles W. Duddles
Title: Executive Vice President and
Chief Financial Officer
Attest:
LAWRENCE E. SCHAUF
------------------ (SEAL)
Name: Lawrence E. Schauf
Title: Executive Vice President
and Secretary
Dated as of April 14, 1998 CP DISTRIBUTION CO.
By: CHARLES W. DUDDLES
------------------
Name: Charles W. Duddles
Title: Vice President
LAWRENCE E. SCHAUF
------------------ (SEAL)
Name: Lawrence E. Schauf
Title: Secretary
Dated as of April 14, 1998 CP WHOLESALE CO.
By: CHARLES W. DUDDLES
------------------
Name: Charles W. Duddles
Title: Controller
LAWRENCE E. SCHAUF
------------------ (SEAL)
Name: Lawrence E. Schauf
Title: Secretary
<PAGE>
Dated as of April 14, 1998 FOODMAKER INTERNATIONAL FRANCHISING,
INC.
By: CHARLES W. DUDDLES
------------------
Name: Charles W. Duddles
Title: Vice President
TIMOTHY PICKWELL
---------------- (SEAL)
Name: Timothy Pickwell
Title: Secretary
Dated as of April 14, 1998 JACK IN THE BOX, INC.
By: CHARLES W. DUDDLES
------------------
Name: Charles W. Duddles
Title: Vice President
LAWRENCE E. SCHAUF
------------------ (SEAL)
Name: Lawrence E. Schauf
Title: Secretary
<PAGE>
Dated as of April 14, 1998 FIRST UNION NATIONAL BANK
By: LINDA J. SCHNEIDER
------------------
Name: Linda J. Schneider
Title: Corporate Trust Officer
<PAGE>
EXHIBIT A
(Face of Note)
CUSIP No:[ (144A)]
[ (Reg. S)]
[ (ISIN)]
8 3/8% [Series A] [Series B] Senior Subordinated Notes due 2008
No. $__________
FOODMAKER, INC.
promises to pay to or registered assigns,
the principal sum of Dollars on April 15, 2008
Interest Payment Dates: April 15 and October 15
Record Dates: April 1 and October 1
Dated:
A-1
<PAGE>
FOODMAKER, INC.
By:
Name:
Title:
By:
Name:
Title:
(SEAL)
Certificate of Authentication:
This is one of the [Global] Notes
referred to in the within-mentioned Indenture:
First Union National Bank
By:______________________________
Authorized Signatory
Dated:
A-2
<PAGE>
(Back of Note)
8 3/8% [Series A] [Series B] Senior Subordinated Notes due 2008
[THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE
BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY
CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS
MAY BE REQUIRED PURSUANT TO SECTION 2.06 OF THE INDENTURE, (II) THIS GLOBAL
NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF
THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR
CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL
NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN
CONSENT OF THE COMPANY.]
[UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO
A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE
DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY
SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK,
NEW YORK) ("DTC"), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER
ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS
AN INTEREST HEREIN.](1)
[THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.
PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION
HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS NOT A
U.S. PERSON AND IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT, OR (C) IT IS AN
- ---------------------------------
(1) To be included only on Global Notes deposited with DTC as Depositary.
A-3
<PAGE>
INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2), (3),
OR (7) OF REGULATION D UNDER THE SECURITIES ACT) (AN "INSTITUTIONAL
ACCREDITED INVESTOR"), (2) AGREES THAT IT WILL NOT, WITHIN TWO YEARS AFTER
THE ORIGINAL ISSUANCE OF THE NOTES, RESELL OR OTHERWISE TRANSFER THIS NOTE
EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT,
(C) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH
RULE 904 UNDER THE SECURITIES ACT, (D) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE),
(E) INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT,
PRIOR TO SUCH TRANSFER, FURNISHES TO THE TRUSTEE A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON
TRANSFER OF THIS NOTE (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE
TRUSTEE) AND IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT
OF NOTES OF LESS THAN $100,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE
COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, OR
(F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT,
AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN
CONNECTION WITH ANY TRANSFER OF THIS NOTE WITHIN TWO YEARS AFTER THE ORIGINAL
ISSUANCE OF THE NOTES, THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON
THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS
CERTIFICATE TO THE TRUSTEE. IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL
ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE
TRUSTEE AND THE COMPANY SUCH CERTIFICATIONS, LEGAL OPINIONS, OR OTHER
INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH
TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED
HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES," AND "U.S. PERSON"
HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO
REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING
RESTRICTIONS.]
Capitalized terms used herein shall have the meanings assigned to them
in the Indenture referred to below unless otherwise indicated.
1. Interest. Foodmaker, Inc., a Delaware corporation (the "Company"),
promises to pay interest on the principal amount of this Note at 8 3/8% per
annum from April 14, 1998 until maturity and shall pay the Additional
Interest, if any, payable pursuant to Section 2(d) of the Registration Rights
Agreement referred to below. The Company will pay interest and Additional
A-4
<PAGE>
Interest, if any, semi-annually on April 15 and October 15 of each year, or
if any such day is not a Business Day, on the next succeeding Business Day
(each an "Interest Payment Date"). Interest on the Notes will accrue from
the most recent date to which interest has been paid or, if no interest has
been paid, from the date of issuance; provided that if there is no existing
Default in the payment of interest, and if this Note is authenticated between
a record date referred to on the face hereof and the next succeeding Interest
Payment Date, interest shall accrue from such next succeeding Interest
Payment Date; provided, further, that the first Interest Payment Date shall
be October 15, 1998. The Company shall pay interest (including Accrued
Bankruptcy Interest in any proceeding under any Bankruptcy Law) on overdue
principal and premium, if any, from time to time on demand at the rate then
in effect; it shall pay interest (including Accrued Bankruptcy Interest in
any proceeding under any Bankruptcy Law) on overdue installments of interest
and Additional Interest (without regard to any applicable grace periods) from
time to time on demand at the same rate to the extent lawful. Interest will
be computed on the basis of a 360-day year of 12 30-day months.
2. Method of Payment. The Company will pay interest on the Notes
(except defaulted interest) and Additional Interest to the Persons who are
registered Holders of Notes at the close of business on the April 1 or
October 1 next preceding the Interest Payment Date, even if such Notes are
cancelled after such record date and on or before such Interest Payment Date,
except as provided in Section 2.12 of the Indenture (as defined below) with
respect to defaulted interest. The Notes will be payable as to principal,
premium, interest and Additional Interest at the office or agency of the
Company maintained for such purpose, or, at the option of the Company,
payment of interest and Additional Interest may be made by check mailed to
the Holders at their addresses set forth in the register of Holders, and
provided that payment by wire transfer of immediately available funds will be
required with respect to principal of and interest, premium and Additional
Interest on all Global Notes. Such payment shall be in such coin or currency
of the United States of America as at the time of payment is legal tender for
payment of public and private debts.
3. Paying Agent and Registrar. Initially, First Union National Bank,
the Trustee under the Indenture, will act as Paying Agent and Registrar. The
Company may change any Paying Agent or Registrar without notice to any
Holder. The Company or any of its Subsidiaries may act in any such capacity.
4. Indenture. The Company issued the Notes under an Indenture dated as
of April 14, 1998 ("Indenture") among the Company, the Subsidiary Guarantors
and the Trustee. The terms of the Notes include those stated in the
Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939, as amended (15 U.S. Code Section 77aaa-77bbbb). The Notes
are subject to all such terms, and Holders are referred to the Indenture and
such Act for a statement of such terms.
5. Optional Redemption. The Notes will be redeemable, at the Company's
option, in whole or in part, at any time or from time to time, on or after
April 15, 2003 and prior to maturity, upon not less than 30 nor more than 60
days prior notice mailed by first class mail to each Holder's last
registered address, at the following redemption prices (expressed in
A-5
<PAGE>
percentages of principal amount), plus accrued and unpaid interest and
Additional Interest, if any, to the redemption date (subject to the right of
Holders of record on the relevant regular record date that is on or prior to
the redemption date to receive interest due on an interest payment date), if
redeemed during the 12-month period commencing April 15, of the years set
forth below:
Year Percentage
---- ----------
2003 . . . . . . . . . . . . . . . 104.188%
2004 . . . . . . . . . . . . . . . 102.792%
2005 . . . . . . . . . . . . . . . 101.396%
2006 and thereafter. . . . . . . . 100.000%
In addition, at any time prior to April 15, 2001, the Company may
redeem up to 35% of the principal amount of the Notes with the proceeds of
one or more sales by the Company of its Capital Stock (other than
Disqualified Stock), at any time or from time to time in part, at a
redemption price (expressed as a percentage of principal amount) of 108.375%,
plus accrued and unpaid interest and Additional Interest, if any, to the
redemption date (subject to the rights of Holders of record on the relevant
regular record date that is prior to the redemption date to receive interest
due on an interest payment date); provided that at least $81,250,000
aggregate principal amount of Notes remains outstanding after each such
redemption; and provided further, that such redemption occurs within 90 days
of the date of the closing of each such sale of Capital Stock.
6. Mandatory Redemption. The Company shall not be required to make
mandatory redemption payments with respect to the Notes.
7. Offers to Purchase.
(a) Change of Control. The Company must commence, within 30 days
of the occurrence of a Change of Control, and consummate an Offer to Purchase
for all Notes then outstanding, at a purchase price equal to 101% of the
principal amount thereof, plus accrued interest (if any) to the Payment Date.
(b) Asset Sale. The Company will not, and will not permit any
Restricted Subsidiary to, consummate any Asset Sale, unless (i) the consider-
ation received by the Company or such Restricted Subsidiary is at least equal
to the fair market value of the assets sold or disposed of and (ii) at least
85% of the consideration (excluding contingent liabilities assumed by the
transferee of any such assets) received consists of cash or Temporary Cash
Investments or the assumption of Senior Indebtedness of the Company or a
Subsidiary Guarantor, provided that the Company or such Restricted Subsidiary
is irrevocably released from all liability under such Indebtedness. In the
event and to the extent that the Net Cash Proceeds received by the Company or
any of its Restricted Subsidiaries from one or more Asset Sales occurring on
or after the Closing Date in any period of 12 consecutive months exceed 10%
of Adjusted Consolidated Net Tangible Assets (determined as of the date
closest to the commencement of such 12-month period for which a consolidated
balance sheet of the Company and its Subsidiaries has been filed with the
A-6
<PAGE>
Commission or provided to the Holders pursuant to Section 4.03 of the
Indenture), then the Company shall or shall cause the relevant Restricted
Subsidiary to (i) within 12 months after the date Net Cash Proceeds so
received exceed 10% of Adjusted Consolidated Net Tangible Assets (A) apply an
amount equal to such excess Net Cash Proceeds to permanently repay Senior
Indebtedness of the Company or a Subsidiary Guarantor or (B) invest an equal
amount, or the amount not so applied pursuant to clause (A) (or enter into a
definitive agreement committing to so invest within 12 months after the date
of such agreement), in property or assets (other than current assets) of a
nature or type or that are used in a business (or in a company having
property and assets of a nature or type, or engaged in a business) similar or
related to the nature or type of the property and assets of, or the business
of, the Company and its Restricted Subsidiaries existing on the date of such
investment and (ii) apply (no later than the end of the 12-month period
referred to in clause (i)) such excess Net Cash Proceeds (to the extent not
applied pursuant to clause (i)) as provided in the following paragraph of
Section 4.15 of the Indenture. The amount of such excess Net Cash Proceeds
required to be applied (or to be committed to be applied) during such
12-month period as set forth in clause (i) of the preceding sentence and not
applied as so required by the end of such period shall constitute "Excess
Proceeds."
If, as of the first day of any calendar month, the aggregate amount of
Excess Proceeds not theretofore subject to an Offer to Purchase pursuant to
this covenant totals at least $5,000,000, the Company must commence, not
later than the fifteenth Business Day of such month, an Offer to Purchase to
the Holders of the Notes and, to the extent required by the terms of any Pari
Passu Indebtedness, an Offer to Purchase to all holders of such Pari Passu
Indebtedness, the maximum principal amount of Notes and any such Pari Passu
Indebtedness that may be purchased out of the Excess Proceeds, at an offer
price equal to 100% of the principal amount thereof, plus, in each case,
accrued and unpaid interest and Additional Interest, if any, to the Payment
Date. If the aggreage principal amount of Notes and any such Pari Passu
Indebtedness tendered by holders thereof exceeds the amount of Excess
Proceeds, the Notes and Pari Passu Indebtedness shall be purchased on a pro
rata basis. Upon the completion of any such Offers to Purchase, the amount
of Excess Proceeds shall be reset at zero.
8. Denominations, Transfer, Exchange. The Notes are in registered
form without coupons in denominations of $1,000 and integral multiples of
$1,000. The transfer of Notes may be registered and Notes may be exchanged
as provided in the Indenture. The Registrar and the Trustee may require a
Holder, among other things, to furnish appropriate endorsements and transfer
documents and the Company may require a Holder to pay any taxes and fees
required by law or permitted by the Indenture. The Company need not exchange
or register the transfer of any Note or portion of a Note selected for
redemption, except for the unredeemed portion of any Note being redeemed in
part. Also, it need not exchange or register the transfer of any Notes for a
period of 15 days before a selection of Notes to be redeemed or during the
period between a record date and the corresponding Interest Payment Date.
9. Persons Deemed Owners. The registered Holder of a Note may be
treated as its owner for all purposes.
A-7
<PAGE>
10. Amendment, Supplement and Waiver. Subject to certain exceptions,
the Indenture or the Notes may be amended or supplemented with the consent of
the Holders of at least a majority in principal amount of the then
outstanding Notes, and any existing Default or compliance with any provision
of the Indenture or the Notes may be waived with the consent of the Holders
of a majority in principal amount of the then outstanding Notes. Without the
consent of any Holder of a Note, the Indenture or the Notes may be amended or
supplemented to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Notes in addition to or in place of certificated Notes, to
provide for the assumption of the Company's obligations to Holders of the
Notes in case of a merger or consolidation, to provide for additional
Subsidiary Guarantees as set forth in the Indenture or for the release or
assumption of Subsidiary Guarantees in compliance with the Indenture to make
any change that would provide any additional rights or benefits to the
Holders of the Notes or that does not adversely affect the legal rights under
the Indenture of any such Holder, or to comply with the requirements of the
Commission in order to effect or maintain the qualification of the Indenture
under the TIA.
11. Defaults and Remedies. The Indenture provides that each of the
following constitutes an Event of Default: (a) default in the payment of
principal of (or premium, if any, on) any Note when the same becomes due and
payable at maturity, upon acceleration, redemption or otherwise, whether or
not such payment is prohibited by the provisions described below under
"Ranking"; (b) default in the payment of interest on any Note when the same
becomes due and payable, and such default continues for a period of 30 days,
whether or not such payment is prohibited by the provisions described below
under "Ranking"; (c) default in the performance or breach of the provisions
of the Indenture applicable to mergers, consolidations and transfers of all
or substantially all of the assets of the Company or the failure to make or
consummate an Offer to Purchase in accordance with Section 4.15 or Section
4.16 of the Indenture; (d) the Company or any Subsidiary Guarantor defaults
in the performance of or breaches any other covenant or agreement of the
Company or any Subsidiary Guarantor in the Indenture or under the Notes
(other than a default specified in clause (a), (b) or (c) above) and such
default or breach continues for a period of 30 consecutive days after written
notice by the Trustee or the Holders of 25% or more in aggregate principal
amount of the Notes; (e) there occurs with respect to any issue or issues of
Indebtedness of the Company or any Significant Subsidiary having an
outstanding principal amount of $5,000,000 or more in the aggregate for all
such issues of all such Persons, whether such Indebtedness now exists or
shall hereafter be created, (I) an event of default that has caused the
holder thereof to declare such Indebtedness to be due and payable prior to
its Stated Maturity and such Indebtedness has not been discharged in full or
such acceleration has not been rescinded or annulled within 30 days of such
acceleration and/or (II) the failure to make a principal payment at the final
(but not any interim) fixed maturity and such defaulted payment shall not
have been made, waived or extended within 30 days of such payment default;
(f) any final judgment or order (not covered by insurance) for the payment of
money in excess of $5,000,000 in the aggregate for all such final judgments
or orders against all such Persons (treating any deductibles, self-insurance
or retention as not so covered) shall be rendered against the Company or any
Significant Subsidiary and shall not be paid or discharged, and there shall
be any period of 60 consecutive days following entry of the final judgment or
order that causes the aggregate amount for all such final judgments or orders
A-8
<PAGE>
outstanding and not paid or discharged against all such Persons to exceed
$5,000,000 during which a stay of enforcement of such final judgment or
order, by reason of a pending appeal or otherwise, shall not be in effect;
(g) except as permitted by the Indenture, any Subsidiary Guarantee shall be
held in any judicial proceeding to be unenforceable or invalid or shall cease
for any reason to be in full force and effect in any material respect or any
Subsidiary Guarantor, or any Person acting on behalf of any Subsidiary
Guarantor, shall deny or disaffirm its obligations under its Subsidiary
Guarantee; (h) a court having jurisdiction in the premises enters a decree or
order for (A) relief in respect of the Company or any Significant Subsidiary
in an involuntary case under any applicable Bankruptcy Law now or hereafter
in effect, (B) appointment of a receiver, liquidator, assignee, custodian,
trustee, sequestrator or similar official of the Company or any Significant
Subsidiary or for all or substantially all of the property and assets of the
Company or any Significant Subsidiary or (C) the winding up or liquidation of
the affairs of the Company or any Significant Subsidiary and, in each case,
such decree or order shall remain unstayed and in effect for a period of 60
consecutive days; or (i) the Company or any Significant Subsidiary (A)
commences a voluntary case under any applicable Bankruptcy Law now or
hereafter in effect, or consents to the entry of an order for relief in an
involuntary case under any such law, (B) consents to the appointment of or
taking possession by a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of the Company or any Significant Subsidiary
or for all or substantially all of the property and assets of the Company or
any Significant Subsidiary or (C) effects any general assignment for the
benefit of creditors.
12. Ranking. The Notes and the Subsidiary Guarantees are subordinated
in right of payment, to the extent and in the manner provided in Article 11
and Section 10.07 of the Indenture, to the prior payment in full of all
Senior Indebtedness. The Company agrees, and each Holder by accepting a Note
consents and agrees, to the subordination provided in the Indenture and
authorizes the Trustee to give it effect.
13. Trustee Dealings with Company. The Trustee, in its individual or
any other capacity, may make loans to, accept deposits from, and perform
services for the Company or its Affiliates, and may otherwise deal with the
Company or its Affiliates, as if it were not the Trustee.
14. No Recourse Against Others. A director, officer, employee,
incorporator or stockholder, of the Company, as such, shall not have any
liability for any obligations of the Company under the Notes or the Indenture
or for any claim based on, in respect of, or by reason of, such obligations
or their creation. Each Holder by accepting a Note waives and releases all
such liability. The waiver and release are part of the consideration for the
issuance of the Notes.
15. Authentication. This Note shall not be valid until authenticated
by the manual signature of the Trustee or an authenticating agent.
16. Abbreviations. Customary abbreviations may be used in the name of
a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of
A-9
<PAGE>
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A
(= Uniform Gifts to Minors Act).
17. Additional Rights of Holders of Transfer Restricted Notes. In
addition to the rights provided to Holders of Notes under the Indenture,
Holders of Transferred Restricted Notes shall have all the rights set forth
in the Registration Rights Agreement dated as of the date of the Indenture,
among the Company, the Subsidiary Guarantors and the Placement Agents (the
"Registration Rights Agreement").
18. CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has
caused CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP
numbers in notices of redemption as a convenience to Holders. No
representation is made as to the accuracy of such numbers either as printed
on the Notes or as contained in any notice of redemption and reliance may be
placed only on the other identification numbers placed thereon.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
Foodmaker, Inc.
9330 Balboa Avenue
San Diego, CA 92123
Attention: Treasurer
Telephone No.: (619) 571-2121
A-10
<PAGE>
$175,000,000
REVOLVING CREDIT AGREEMENT
Dated as of April 1, 1998
Among
FOODMAKER, INC.
as Borrower
-- --------
and
THE FINANCIAL INSTITUTIONS NAMED HEREIN
as Initial Lenders
-- ---------------
NATIONSBANK OF TEXAS, N.A.
as Agent
-- -----
NATIONSBANC MONTGOMERY SECURITIES LLC
as Arranger
-- --------
and
CREDIT LYONNAIS LOS ANGELES BRANCH
as Documentation Agent
-- -------------------
<PAGE>
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE I. DEFINITIONS AND ACCOUNTING TERMS . . . . . . . . . . . . . . . 1
Section 1.01. Certain Defined Terms . . . . . . . . . . . . . . . . 1
Section 1.02. Computation of Time Periods . . . . . . . . . . . . . 22
Section 1.03. Accounting Terms . . . . . . . . . . . . . . . . . . . 22
Section 1.04. Other Definitional Provisions . . . . . . . . . . . . 22
ARTICLE II. AMOUNTS AND TERMS OF THE ADVANCES . . . . . . . . . . . . . . 23
Section 2.01. The Advances . . . . . . . . . . . . . . . . . . . . . 23
Section 2.02. Making the Advances . . . . . . . . . . . . . . . . . 23
Section 2.03. Repayment . . . . . . . . . . . . . . . . . . . . . . 27
Section 2.04. Reduction of the Revolving Commitments, Swing Line
Commitment and Letter of Credit Subfacility . . . . . 27
Section 2.05. Prepayments . . . . . . . . . . . . . . . . . . . . . 28
Section 2.06. Interest . . . . . . . . . . . . . . . . . . . . . . . 30
Section 2.07. Fees . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 2.08. Increased Costs, Etc . . . . . . . . . . . . . . . . . 33
Section 2.09. Payments and Computations . . . . . . . . . . . . . . 34
Section 2.10. Taxes . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 2.11. Sharing of Payments, Etc . . . . . . . . . . . . . . . 38
Section 2.12. Use of Proceeds . . . . . . . . . . . . . . . . . . . 39
Section 2.13. Evidence of Debt . . . . . . . . . . . . . . . . . . . 39
ARTICLE III. AMOUNTS AND TERMS OF LETTERS OF CREDIT . . . . . . . . . . . 40
Section 3.01. The Letter of Credit Subfacility . . . . . . . . . . . 40
Section 3.02. Issuance of Letters of Credit . . . . . . . . . . . . 40
Section 3.03. Drawing and Reimbursement . . . . . . . . . . . . . . 41
Section 3.04. Obligations Absolute . . . . . . . . . . . . . . . . . 42
Section 3.05. Letter of Credit Compensation . . . . . . . . . . . . 43
Section 3.06. Use of Letters of Credit . . . . . . . . . . . . . . . 43
ARTICLE IV. CONDITIONS OF LENDING . . . . . . . . . . . . . . . . . . . . 43
Section 4.01. Conditions Precedent to Initial Borrowing . . . . . . 43
Section 4.02. Conditions Precedent to Each Borrowing and Issuance . 47
Section 4.03. Determinations Under Section 4.01 . . . . . . . . . . 48
ARTICLE V. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . 48
Section 5.01. Representations and Warranties of the Borrower . . . . 48
<PAGE>
ARTICLE VI. COVENANTS OF THE BORROWER . . . . . . . . . . . . . . . . . . 54
Section 6.01. Affirmative Covenants . . . . . . . . . . . . . . . . 54
Section 6.02. Negative Covenants . . . . . . . . . . . . . . . . . . 58
Section 6.03. Reporting Requirements . . . . . . . . . . . . . . . . 64
Section 6.04. Financial Covenants . . . . . . . . . . . . . . . . . 66
ARTICLE VII. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . 67
Section 7.01. Events of Default . . . . . . . . . . . . . . . . . . 67
Section 7.02. Actions in Respect of the
Letters of Credit Upon Default . . . . . . . . . . . . 70
ARTILCE VIII. THE AGENT . . . . . . . . . . . . . . . . . . . . . . . . . 70
Section 8.01. Authorization and Action . . . . . . . . . . . . . . . 70
Section 8.02. Agent's Reliance, Etc . . . . . . . . . . . . . . . . 71
Section 8.03. NationsBank and Affiliates . . . . . . . . . . . . . . 71
Section 8.04. Lender Party Credit Decision . . . . . . . . . . . . . 71
Section 8.05. Indemnification . . . . . . . . . . . . . . . . . . . 72
Section 8.06. Successor Agents . . . . . . . . . . . . . . . . . . . 72
ARTICLE IX. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . 73
Section 9.01. Amendments, Etc; Release of Collateral . . . . . . . . 73
Section 9.02. Notices, Etc . . . . . . . . . . . . . . . . . . . . . 74
Section 9.04. Costs and Expenses . . . . . . . . . . . . . . . . . . 74
Section 9.05. Right of Set-off . . . . . . . . . . . . . . . . . . . 76
Section 9.06. Binding Effect . . . . . . . . . . . . . . . . . . . . 76
Section 9.07. Assignments and Participations . . . . . . . . . . . . 76
Section 9.08. Governing Law . . . . . . . . . . . . . . . . . . . . 79
Section 9.09. Execution in Counterparts . . . . . . . . . . . . . . 79
Section 9.10. No Liability of the Issuing Bank . . . . . . . . . . . 79
Section 9.11. Confidentiality . . . . . . . . . . . . . . . . . . . 80
Section 9.12. Waiver of Jury Trial . . . . . . . . . . . . . . . . . 80
SCHEDULES AND EXHIBITS
- ----------------------
Schedules
---------
Schedule I Commitments, and Applicable Lending
Offices
Schedule 1.01(a) Existing Letters of Credit
Schedule 1.01(b) Excluded Asset Sales
Schedule 1.01(c) Existing Liens
Schedule 4.01(c) Surviving Debt
Schedule 4.01(j) Mortgages
Schedule 5.01(b) Capital Stock
ii
<PAGE>
Schedule 5.01(q)(i) Existing Debt
Schedule 5.01(q)(ii) Surviving Debt
Schedule 5.01(r) Owned and Leased Real Property
Schedule 5.01(s) Existing Investments
Schedule 5.01(t) Intellectual Property
Schedule 5.01(u) Other Agreements
Exhibits
--------
Exhibit A Form of Assignment and Acceptance
Exhibit B-1 Form of Notice of Borrowing
Exhibit B-2 Form of Notice of Swing Line Borrowing
Exhibit C Form of Notice of Issuance
Exhibit D-1 Form of Revolving Note
Exhibit D-2 Form of Swing Line Note
Exhibit E Form of Security Agreement
Exhibit F Form of Guaranty
Exhibit G Form of Opinion of Borrower's Counsel
Exhibit H Form of Amendment to Guaranty
Exhibit I-1 Form of Mortgage
Exhibit I-2 Form of Deed of Trust
Exhibit J Form of Amendment to Security Agreement
Exhibit K-1 Form of Organizational Documents -
Corporation
Exhibit K-2 Form of Organizational Documents -
Limited Partnership
iii
<PAGE>
"CREDIT AGREEMENT dated as of April 1, 1998, among FOODMAKER, INC., a
Delaware corporation (the "Borrower"), the financial institutions and other
entities listed on the signature pages hereof as Lenders (the "Initial
Lenders"), NATIONSBANC MONTGOMERY SECURITIES LLC, as arranger for the Lenders
and the Issuing Banks hereunder (the "Arranger"), CREDIT LYONNAIS LOS ANGELES
BRANCH, as documentation agent (the "Documentation Agent"), and NATIONSBANK OF
TEXAS, N.A. ("NationsBank"), as L/C Bank (as hereinafter defined) and as agent
(in such capacity, together with any successor in such capacity appointed
pursuant to Article VII, the "Agent") for the Lenders and the Issuing Banks
hereunder.
PRELIMINARY STATEMENTS
(1) The Borrower has requested, on the terms and conditions set forth
herein, (a) that the Lenders make Revolving Advances (as hereinafter defined) to
the Borrower from time to time in an aggregate principal amount not to exceed at
any time outstanding the aggregate Revolving Commitments (as hereinafter
defined) of the Lenders (less the sum of (i) the aggregate amount of Letter of
Credit Obligations (as hereinafter defined) outstanding at such time, and (ii)
Swing Line Advances (as hereinafter defined) outstanding from time to time), (b)
that the Swing Line Lender (as hereinafter defined) makes Swing Line Advances to
the Borrower from time to time in an aggregate principal amount not to exceed at
any time outstanding $5,000,000 and (c) that the L/C Bank and the other Issuing
Banks (as hereinafter defined) issue Letters of Credit (as hereinafter defined)
for the account of the Borrower from time to time in an aggregate Available
Amount (as hereinafter defined) not to exceed at any time outstanding the L/C
Sublimit (as hereinafter defined).
(2) Subject to the terms and conditions set forth in this Agreement,
(a) the Lenders have agreed severally to make such Revolving Advances to the
Borrower, (b) the Swing Line Lender has agreed to make such Swing Line Advances
to the Borrower, and (c) the L/C Bank has agreed to issue such Letters of Credit
for the account of the Borrower.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, and for other good and valuable
consideration the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
ARTICLE I.
DEFINITIONS AND ACCOUNTING TERMS
Section 1.01. Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"Additional Mortgages" has the meaning specified in Section 6.01(k).
1
<PAGE>
"Advance" means a Revolving Advance, a Swing Line Advance or an L/C
Advance.
"Affiliate" means, as to any Person, any other Person that, directly
or indirectly, controls, is controlled by or is under common control with such
Person or is a director or officer of such Person. For purposes of this
definition, the term "control" (including the terms "controlling," "controlled
by" and "under common control with") of a Person means the possession, direct or
indirect, of the power to vote 5% or more of the Voting Stock of such Person or
to direct or cause the direction of the management and policies of such Person,
whether through the ownership of Voting Stock, by contract or otherwise.
"Agent" has the meaning specified in the recital of parties to this
Agreement.
"Agent's Account" means the account of the Agent maintained by the
Agent with NationsBank at its office at 901 Main Street, Dallas, Texas 75202,
Account No. 1292000883, Attention: Agency Services, Reference: Foodmaker.
"Applicable Lending Office" means, with respect to each Lender, such
Lender's Domestic Lending Office in the case of a Base Rate Advance and such
Lender's Eurodollar Lending Office in the case of a Eurodollar Rate Advance.
"Applicable Margin" means with respect to any Base Rate Advances or
Eurodollar Rate Advances, a percentage per annum determined by reference to the
applicable Total Funded Debt to EBITDA Ratio as set forth below:
Total Funded Debt LIBOR Base Rate
to EBITDA Ratio Margin Margin
------------------ ------ ---------
less than 1:75:1.0 0.625% 0.000%
1.75:1.0 or greater, but less 0.875% 0.000%
than 2.25:1.0
2.25:1.0 or greater, but less 1.125% 0.000%
than 3.00:1.0
3.00:1.0 or greater, but less 1.375% 0.250%
than 3.50:1.0
3.50:1.0 or greater 1.625% 0.500%
provided, however, that, notwithstanding the foregoing, for purposes of
determining the Applicable Margin, the Total Funded Debt to EBITDA Ratio shall
be deemed to be greater than or equal to 3.50 to 1.0 at all times when a Default
has occurred and is continuing based on the Borrower's failure to deliver any
financial statement or compliance certificate in the form required within five
days after the date required for delivery thereof pursuant to Sections 6.03(b)
or 6.03(c), as applicable. For purposes of this Agreement, any change in the
Applicable Margin based on a change in the Total Funded Debt to EBITDA Ratio
shall be effective three Business Days after the date of receipt by the Agent of
the financial statements and compliance certificate required by Sections 6.03(b)
or 6.03(c), as applicable, reflecting such change.
2
<PAGE>
"Arranger" means NationsBanc Montgomery Securities LLC.
"Assignment and Acceptance" means an assignment and acceptance entered
into by a Lender Party and an Eligible Assignee, and accepted by the Agent, in
accordance with Section 9.07 and in substantially the form of Exhibit A hereto.
"Available Amount" of any Letter of Credit means, at any time, the
maximum amount available to be drawn under such Letter of Credit at such time
(assuming compliance at such time with all conditions to drawing).
"Base Rate" means a fluctuating interest rate per annum in effect from
time to time, which rate per annum shall at all times be equal to the highest
of: (a) the rate of interest announced publicly by NationsBank from time to time
as NationsBank's prime rate; and (b) 1/2 of one percent per annum above the
Federal Funds Rate.
"Base Rate Advance" means an Advance that bears interest as provided
in Section 2.06(a).
"Borrower" has the meaning set forth in the recital of parties to this
Agreement.
"Borrower's Account" means the account of the Borrower maintained by
the Borrower with Bank of America at its office at Corporate Support Center
#5693, Concord, CA 94520, Account No. 00502-15249, ABA No. 121000358.
"Borrower's Form 10-K" has the meaning specified in Section 4.01(e).
"Borrowing" means a Revolving Borrowing or a Swing Line Borrowing.
"Business Day" means a day of the year on which banks are not required
or authorized by law to close in Los Angeles, California or Dallas, Texas and,
if the applicable Business Day relates to any Eurodollar Rate Advances, on which
dealings are carried on in the London interbank market.
"Capital Expenditures" means, for any period, the aggregate of all
expenditures (whether paid in cash or accrued as liabilities and including that
portion of Capitalized Leases which is capitalized on a Consolidated balance
sheet of the Borrower and its Subsidiaries) that in conformity with GAAP would
otherwise be classified as capital expenditures; provided, however, that Capital
Expenditures shall not include expenditures in connection with any Permitted
Sale-Leaseback Repurchase.
"Capitalized Leases" has the meaning specified in clause (e) of the
definition of Debt.
"Cash Equivalents" means any of the following, to the extent owned by
the Borrower free and clear of all Liens and having a maturity of not greater
than 360 days from the date of issuance thereof: (a) readily marketable direct
obligations of the Government of the United States or any agency or
instrumentality thereof or obligations unconditionally guaranteed by the full
3
<PAGE>
faith and credit of the Government of the United States, (b) insured
certificates of deposit or bankers' acceptances of or time deposits with any
commercial bank that (i) is a Lender or a member of the Federal Reserve System,
(ii) issues (or the parent of which issues) commercial paper rated as described
in clause (c), (iii) is organized under the laws of the United States or any
State thereof and (iv) has combined capital and surplus of at least $500
million, (c) commercial paper (other than commercial paper issued by or on
behalf of the Borrower or any of its Affiliates) issued by any corporation
organized under the laws of any State of the United States (i) maturing no more
than one year from the date of acquisition thereof and, at the time of
acquisition, rated at least "Prime-1" (or the then equivalent grade) by Moody's
Investors Services or "A-1" (or the then equivalent grade) by Standard & Poor's
Ratings Group, or (ii) maturing not more than 90 days from the date of
acquisition thereof and, at the time of acquisition, rated at least "Prime-2"
(or the then equivalent grade) by Moody's Investors Services or "A-2" (or the
then equivalent grade) by Standard & Poor's Ratings Group, and (d) money market
accounts maintained with any commercial bank satisfying the criteria set forth
in clause (b) above and (e) money market funds organized under the laws of the
United States or any State thereof that invest solely in (X) any of the types of
investments permitted under clauses (a) and (b) above, (Y) commercial paper
maturing no more than one year from the date of acquisition thereof and, at the
time of acquisition, rated at least "Prime-1" (or the then equivalent grade) by
Moody's Investors Services or "A-1" (or the then equivalent grade) by Standard
&
Poor's Ratings Group, or (Z) any combination of the types of investments set
forth in items (X) and (Y) of this clause (e).
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended or supplemented from time to time, and the
regulations promulgated pursuant thereto.
"Change of Control" means that either of the following events have
occurred: (i) any Person or Group becomes the beneficial owner of 50% or more of
the equity interests of the Borrower, on a fully diluted basis, or (ii) any
Person or Group acquires the voting power necessary to elect a majority of the
board of directors of the Borrower, or (iii) a "Change in Control" as defined in
the indenture relating to the senior subordinated notes of the Borrower
described in clause (A) of the definition of "Permitted Subordinated Debt."
"Closing Date" means the date on which each of the conditions in
Section 4.01 is satisfied or waived.
"Collateral" means all "Collateral" referred to in the Collateral
Documents and all other property that is subject to any Lien in favor of the
Agent, the Lenders or the Issuing Bank.
"Collateral Documents" means the Security Agreement, the Mortgages and
any Additional Mortgages.
"Collateral Release Date" has the meaning specified in Section
9.01(b).
4
<PAGE>
"Collateral Release Test" means one or more of the following events:
(i) the senior unsecured Debt of the Borrower shall be rated at least "Baa3" (or
the then equivalent grade) by Moody's Investors Services, or (ii) the senior
unsecured Debt of the Borrower shall be rated at least "BBB-" (or the then
equivalent grade) by Standard & Poor's Ratings Group, or (iii) the Total Funded
Debt to EBITDA Ratio shall be less than or equal to 2.00:1.00 as of the end of
any two consecutive fiscal quarters; provided that, in each case, as of the date
of such event, no Default or Event of Default shall have occurred and be
continuing.
"Commitment" means a Revolving Commitment or a Swing Line Commitment.
"Commitment Fee Percentage" means a percentage per annum determined by
reference to the Total Funded Debt to EBITDA Ratio as set forth below:
Total Funded Debt Commitment Fee
to EBITDA Ratio Percentage
------------------ --------------
less than 1:75:1.0 0.150%
1.75:1.0 or greater, but less 0.200%
than 2.25:1.0
2.25:1.0 or greater, but less 0.250%
than 3.00:1.0
3.00:1.0 or greater, but less 0.325%
than 3.50:1.0
3.50:1.0 or greater 0.400%
provided, however, that, notwithstanding the foregoing, for purposes of
determining the Commitment Fee Percentage, the Total Funded Debt to EBITDA Ratio
shall be deemed to be greater than or equal to 3.50 to 1.0 at all times when a
Default has occurred and is continuing based on the Borrower's failure to
deliver any financial statement or compliance certificate in the form required
within five days after the date required for delivery thereof pursuant to
Sections 6.03(b) or 6.03(c), as applicable. For purposes of this Agreement, any
change in the Commitment Fee Percentage based on a change in the Total Funded
Debt to EBITDA Ratio shall be effective three Business Days after the date of
receipt by the Agent of the financial statements and compliance certificate
required by Sections 6.03(b) and 6.03(c), as applicable, reflecting such change.
"Confidential Information" means information that the Borrower
furnishes to the Agent or any Lender pursuant to this Agreement, the Loan
Documents and the transactions contemplated hereunder and thereunder, but does
not include any such information that is or becomes generally available to the
public other than as a result of a breach by the Agent or any Lender of its
obligations hereunder or that is or becomes available to the Agent or such
Lender from a source other than the Borrower.
"Consolidated" refers to the consolidation of accounts in accordance
with GAAP.
5
<PAGE>
"Consolidated Net Income" means, for any period, the net earnings (or
loss) after taxes of the Borrower and its Subsidiaries on a Consolidated basis
determined for such period in conformity with GAAP.
"Consolidated Net Worth" means the excess of (i) the total assets of
the Borrower and its Subsidiaries determined on a Consolidated basis in
accordance with GAAP, over (ii) all liabilities of the Borrower and its
Subsidiaries determined on a Consolidated basis in accordance with GAAP.
"Conversion", "Convert" and "Converted" each refer to a conversion of
Advances of one Interest Type into Advances of the other Interest Type pursuant
to Section 2.06.
"CRC-I" means CRC-I Limited Partnership, a Massachusetts limited
partnership.
"CRC-II" means CRC-II Limited Partnership, a Massachusetts limited
partnership.
"CRC Excluded Debt" means (a) any Debt existing on the Closing Date of
FM 1993A Corp., a Delaware corporation, CRC-I, CRC-II, FM 1997 Limited
Partnership, a Delaware limited partnership, and FM 1997 Corp., a Delaware
corporation, and (b) any Debt referred to in clause (a) above with respect to
which any Excluded Subsidiary becomes an obligor or a co-obligor; provided, that
the aggregate principal amount for all such Debt outstanding at any time shall
not exceed $70,000,000; provided, further, that in determining the aggregate
amount of CRC Excluded Debt outstanding for purposes of this definition, any
such Debt with respect to which one or more of FM 1993A Corp., CRC-I and CRC-II
are co-obligors shall be included only once with respect to such determination.
"CRC Leases" means (a) the Master Lease between CRC-I and the
Borrower, dated as of December 15, 1993, as amended and supplemented from time
to time to the Closing Date, and (b) the Master Lease between CRC-II and the
Borrower, dated as of December 15, 1993, as amended and supplemented from time
to time to the Closing Date.
"CRC Notes" means the 9.75% Senior Secured Notes Due November 1, 2003
issued by FM 1993A Corp., a Delaware corporation.
"Currency Hedging Agreements" means currency swap agreements, currency
future or option contracts and other similar agreements.
"Debt" of any Person means without duplication, (a) all indebtedness
of such Person for borrowed money, (b) all Obligations of such Person for the
deferred purchase price of property or services (other than payables to trade
creditors and service providers incurred in the ordinary course of such Person's
business and not overdue by more than 60 days (unless being disputed in good
faith)), (c) all Obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments, (d) all Obligations of such Person
created or arising under any conditional sale or other title retention agreement
with respect to property acquired by such Person (even though the rights and
remedies of the seller or lender under such agreement in the event of default
6
<PAGE>
are limited to repossession or sale of such property), (e) (i) all Obligations
of such Person as lessee under the CRC Leases, and (ii) all Obligations of such
Person as lessee under leases that have been or should be, in accordance with
GAAP, recorded as capital leases including, without limitation, the CRC Leases
("Capitalized Leases"), (f) all Obligations, contingent or otherwise, of such
Person under letter of credit facilities, banker's acceptance facilities or
similar facilities, (g) all Obligations of such Person to purchase, redeem,
retire, defease or otherwise make any payment in respect of any capital stock of
or other ownership or profit interest in such Person or any other Person or any
warrants, rights or options to acquire such capital stock, valued, in the case
of Redeemable Preferred Stock, at the greater of its voluntary or involuntary
liquidation preference plus accrued and unpaid dividends (other than Obligations
to pay dividends upon and after declaration of dividends to the extent such
dividends are permitted under Section 6.02(g)), (h) all Obligations of such
Person in respect of Hedge Agreements, (i) all Debt of others referred to in
clauses (a) through (h) above guaranteed directly or indirectly in any manner by
such Person, or in effect guaranteed directly or indirectly by such Person
through an agreement (i) to pay or purchase such Debt or to advance or supply
funds for the payment or purchase of such Debt, (ii) to purchase, sell or lease
(as lessee or lessor) property, or to purchase or sell services, primarily for
the purpose of enabling the debtor to make payment of such Debt or to assure the
holder of such Debt against loss, (iii) to supply funds to or in any other
manner invest in the debtor (including any agreement to pay for property or
services irrespective of whether such property is received or such services are
rendered) or (iv) otherwise to assure a creditor against loss, and (j) all Debt
referred to in clauses (a) through (h) above secured by (or for which the holder
of such Debt has an existing right, contingent or otherwise, to be secured by)
any Lien on property (including, without limitation, accounts and contract
rights) owned by such Person, even though such Person has not assumed or become
liable for the payment of such Debt; provided, however, that, for purposes of
the definition of Debt, the Debt of Borrower and its Subsidiaries shall not
include any CRC Excluded Debt.
"Default" means any Event of Default or any event that would
constitute an Event of Default but for the requirement that notice be given or
time elapse or both.
"Default Rate" has the meaning specified in Section 2.06(d).
"Disclosed Litigation" has the meaning specified in Section 4.01(e).
"Domestic Lending Office" means, with respect to any Lender, the
office of such Lender specified as its "Domestic Lending Office" opposite its
name on Schedule I hereto or in the Assignment and Acceptance pursuant to which
it became a Lender, or such other office of such Lender as such Lender may from
time to time specify to the Borrower and the Agent.
"EBITDA" means, for any period, (i) net income (or net loss) minus any
non-recurring or extraordinary gains plus (ii) to the extent deducted in
determining such net income (or net loss), the sum of (a) interest expense, (b)
income tax expense, (c) depreciation expense, (d) amortization expense, and (e)
non-recurring or extraordinary losses, in each case determined in accordance
with GAAP for such period.
7
<PAGE>
"Eligible Assignee" means (a) any Lender Party and any Affiliate of
any Lender Party, and (b) any commercial bank, savings and loan association,
savings bank, finance company, insurance company, mutual fund or other financial
institution, fund or investor which has been approved in writing (or, in the
case of the Borrower, deemed approved as provided below) by the Borrower and the
Agent as an Eligible Assignee for purposes of this Agreement, provided that in
each such case such approval shall not be unreasonably withheld, and provided,
further, that if (i) the Borrower is requested in writing at any time to approve
any Person as an Eligible Assignee hereunder and the Agent has not received
written notice from the Borrower, within five Business Days after receipt by the
Borrower of such request, that the Borrower does not approve such Person as an
Eligible Assignee, the Borrower shall be deemed to have approved such Person as
an Eligible Assignee, and (ii) such approval of the Borrower shall not be
required if an Event of Default has occurred and is continuing.
"Environmental Action" means any administrative, regulatory or
judicial action, suit, demand, demand letter, claim, notice of non-compliance or
violation, investigation, proceeding, consent order or consent agreement
relating in any way to any Environmental Law or any Environmental Permit
including, without limitation, (a) any claim by any governmental or regulatory
authority for enforcement, cleanup, removal, response, remedial or other actions
or damages pursuant to any Environmental Law and (b) any claim by any third
party seeking damages, contribution, indemnification, cost recovery,
compensation or injunctive relief resulting from Hazardous Materials or arising
from alleged injury or threat of injury to health, safety or the environment.
"Environmental Law" means any federal, state or local law, rule,
regulation, order, writ, judgment, injunction, decree, determination or award
and any and all common law requirements, rules and bases of liability relating
to the environment, health, safety or Hazardous Materials, including, without
limitation, CERCLA, the Resource Conservation and Recovery Act, the Hazardous
Materials Transportation Act, the Clean Water Act, the Toxic Substances Control
Act, the Clean Air Act, the Safe Drinking Water Act, the Atomic Energy Act, the
Federal Insecticide, Fungicide and Rodenticide Act and the Occupational Safety
and Health Act.
"Environmental Permit" means any permit, approval, identification
number, license or other authorization required under any Environmental Law.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder.
"ERISA Affiliate" of any Person means any other Person that for
purposes of Title IV of ERISA is a member of such Person's controlled group, or
under common control with such Person, within the meaning of Section 414 of the
Internal Revenue Code.
"ERISA Event" with respect to any Person means (a) the occurrence of
a reportable event, within the meaning of Section 4043 of ERISA, with respect to
any Plan of such Person or any of its ERISA Affiliates unless the 30-day notice
requirement with respect to such event has been waived by the PBGC; (b) the
provision by the administrator of any Plan of such Person or any of its ERISA
Affiliates of a notice of intent to terminate such Plan, pursuant to Section
8
<PAGE>
4041(a)(2) of ERISA (including any such notice with respect to a plan amendment
referred to in Section 4041(e) of ERISA); (c) the cessation of operations at a
facility of such Person or any of its ERISA Affiliates in the circumstances
described in Section 4062(e) of ERISA; (d) the withdrawal by such Person or any
of its ERISA Affiliates from a Multiple Employer Plan during a plan year for
which it was a substantial employer, as defined in Section 4001(a)(2) of ERISA;
(e) the failure by such Person or any of its ERISA Affiliates to make a payment
to a Plan required under Section 302(f)(1) of ERISA; (f) the adoption of an
amendment to a Plan of such Person or any of its ERISA Affiliates requiring the
provision of security to such Plan, pursuant to Section 307 of ERISA; or (g) the
institution by the PBGC of proceedings to terminate a Plan of such Person or any
of its ERISA Affiliates, pursuant to Section 4042 of ERISA, or the occurrence of
any event or condition described in Section 4042 of ERISA that could constitute
grounds for the termination of, or the appointment of a trustee to administer,
such Plan.
"Eurocurrency Liabilities" has the meaning specified in Regulation D
of the Board of Governors of the Federal Reserve System, as in effect from time
to time.
"Eurodollar Lending Office" means, with respect to any Lender, the
office of such Lender specified as its "Eurodollar Lending Office" opposite its
name on Schedule I hereto or in the Assignment and Acceptance pursuant to which
it became a Lender (or, if no such office is specified, its Domestic Lending
Office), or such other office of such Lender as such Lender may from time to
time specify to the Borrower and the Agent.
"Eurodollar Rate" means, for any Eurodollar Rate Advance for any
Interest Period therefor, an interest rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) equal to the rate per annum obtained by
dividing (a) the rate per annum appearing on Telerate Page 3750 (or any
successor page) as the London interbank offered rate for deposits in U.S.
dollars at approximately 11:00 a.m. (London time) two Business Days prior to the
first day of such Interest Period for a term comparable to such Interest Period
by (b) a percentage equal to 100% minus the Eurodollar Rate Reserve Percentage
for such Interest Period. If for any reason the rate described in the foregoing
clause (a) is not available at the time of determination of the Eurodollar Rate
for any Eurodollar Rate Advances for any Interest Period, the term "Eurodollar
Rate" shall mean, for any such Eurodollar Rate Advances for any such Interest
Period therefor, an interest rate per annum (rounded upwards, if necessary, to
the nearest 1/100 of 1%) equal to the rate per annum obtained by dividing (i)
the rate per annum appearing on Reuters Screen LIBO Page as the London interbank
offered rate for deposits in U.S. dollars at approximately 11:00 a.m. (London
time) two Business Days prior to the first day of such Interest Period for a
term comparable to such Interest Period (provided, however, if more than one
rate is specified on Reuters Screen LIBO Page, the applicable rate shall be the
arithmetic mean of all such rates) by (ii) a percentage equal to 100% minus the
Eurodollar Rate Reserve Percentage for such Interest Period.
"Eurodollar Rate Advance" means an Advance that bears interest as
provided in Section 2.06(b).
9
<PAGE>
"Eurodollar Rate Reserve Percentage" means, for any Interest Period
for any Eurodollar Rate Advance, the reserve percentage applicable two Business
Days before the first day of such Interest Period under regulations issued from
time to time by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement (including, without
limitation, any emergency, supplemental or other marginal reserve requirement)
for a member bank of the Federal Reserve System in New York City with respect to
liabilities or assets consisting of or including Eurocurrency Liabilities (or
with respect to any other category of liabilities that includes deposits by
reference to which the interest rate on Eurodollar Rate Advances is determined)
having a term equal to such Interest Period.
"Events of Default" has the meaning specified in Section 7.01.
"Excluded Asset Sale" means one or more of the following: (i) the sale
of inventory, equipment and other goods in the ordinary course of business of
the Borrower and its Subsidiaries; (ii) the sale of inventory, equipment, other
goods and other assets to franchisees of the Borrower in the ordinary course of
business of the Borrower and its Subsidiaries and consistent with past practice
of the Borrower excluding properties listed on Part I of Schedule 4.01(j); (iii)
the sale of any property or assets, excluding properties listed on Part I of
Schedule 4.01(j), pursuant to a Permitted Sale-Leaseback Transaction; (iv) the
sale, lease, transfer or disposal of any asset or assets by the Borrower or any
of its wholly-owned Subsidiaries to the Borrower or any of its wholly-owned
Solvent Subsidiaries (other than an Excluded Subsidiary or an Inactive
Subsidiary); (v) the sale or other disposition of obsolete or worn out equipment
or other assets in the ordinary course of business of the Borrower and its
Subsidiaries; (vi) the sale, lease, transfer or disposal of properties listed on
Schedule 1.01(b), as amended from time to time in accordance herewith; (vii) the
sale, lease, transfer or disposal of any property listed on Part I of Schedule
4.01(j); provided, however, that, at all times prior to the Collateral Release
Date, such sale, lease, transfer or disposal of properties shall constitute an
Excluded Asset Sale if and only if the Borrower shall prior to such sale add to
Part I of Schedule 4.01(j) an equivalent number of sites, the real estate of
each having a value not less than that of the property for which it is being
substituted and the Agent shall have received prior to or contemporaneously with
such sale (a) evidence satisfactory to the Agent that deeds of trust, trust
deeds and/or mortgages have been or will be contemporaneously duly recorded in
all filing or recording offices that the Agent may deem necessary or desirable
in order to create a valid first and subsisting Lien on the property described
therein in favor of the Agent for the benefit of the Lender Parties and that all
filing and recording taxes and fees have been or will be contemporaneously paid,
and (b) revised versions of Schedule 1.01(b) and Part I of Schedule 4.01(j),
reflecting such deletions and additions and marked to show the date of such
revisions; (viii) the sale, lease, transfer or disposal of assets having a fair
market value not exceeding $5,000,000 in the aggregate for the Borrower and its
Subsidiaries in any fiscal year of the Borrower; provided, however, that for
purposes of clause (viii) no sale, lease, transfer or disposal of assets having
a fair market value of less than $100,000 shall be included in any aggregation
of sales, leases, transfers and disposals thereunder; or (ix) the sale or other
disposition to a franchisee of the Borrower of (a) any restaurant that has been
acquired by the Borrower from a franchisee of the Borrower or (b) any other
restaurant owned or leased by the Borrower, provided that in each fiscal year of
the Borrower the aggregate value of such restaurants of the Borrower sold or
otherwise disposed of pursuant to this clause (ix) during such fiscal year does
not exceed the aggregate value of restaurants acquired by the Borrower from its
franchisees during such fiscal year.
10
<PAGE>
"Excluded Subsidiaries" means (a) FM 1997 Limited Partnership, a
Delaware limited partnership, (b) FM 1997 Corp., a Delaware corporation and (c)
any other special purpose Subsidiary of the Borrower created or to be created
solely for (i) the purpose of such Subsidiary's purchase of estates for years
from CRC-I or CRC-II and (ii) purposes ancillary thereto; provided, that such
estates for years constitute direct or indirect security for the CRC Notes.
"Existing Credit Agreement" means that certain Amended and Restated
Revolving Credit Agreement, dated as of March 15, 1996, among the Borrower, the
banks named therein, Credit Lyonnais New York Branch, as agent, collateral agent
and swing line bank, and Union Bank, as issuing bank, as amended, supplemented
or otherwise modified to the date hereof.
"Existing Letters of Credit" means the letters of credit described on
Schedule 1.01(a) issued under the Existing Credit Agreement.
"Existing Senior Note Indenture" means that certain Indenture, dated
as of March 1, 1992, between the Borrower and the trustee named therein, as
amended by First Supplemental Indenture, dated as of July 28, 1997, pursuant to
which the Existing Senior Notes were issued.
"Existing Senior Notes" means the 9.25% Senior Notes of the Borrower
Due 1999, issued pursuant to the Existing Senior Note Indenture.
"Existing Senior Subordinated Note Indenture" means that certain
Indenture, dated as of March 1, 1992, between the Borrower and the trustee named
therein, pursuant to which the Existing Senior Subordinated Notes were issued.
"Existing Senior Subordinated Notes" means the 9.75% Senior
Subordinated Notes of the Borrower Due 2002, issued pursuant to the Existing
Senior Subordinated Note Indenture.
"Existing Warrants" means the warrants to purchase not more than
100,000 shares of the Borrower's common stock issued and outstanding on the
Closing Date under that certain Warrant Purchase Agreement, dated as of
December 8, 1988.
"Facility" means the Revolving Facility, the Letter of Credit Facility
or the Swing Line Facility.
"Federal Funds Rate" means, for any period, a fluctuating interest
rate per annum equal for each day during such period to the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day that is a Business Day, the average of the quotations for such day for such
transactions received by the Agent from three Federal funds brokers of
recognized standing selected by it.
11
<PAGE>
"Foreign Subsidiary" means any "controlled foreign corporation" within
the meaning of Section 957(a) of the Internal Revenue Code as to which the
Borrower or any of its Subsidiaries is a "United States shareholder" as defined
in Section 951(b) of the Internal Revenue Code.
"Funded Debt" of any Person means, without duplication, (A) Debt of
such Person referred to in clauses (a), (c) and (e) of the definition of "Debt",
and (B) to the extent that the underlying guaranteed Debt would be Debt of the
types referred to in clause (A) of this definition, Debt of such Person referred
to in clause (i) of the definition of "Debt".
"GAAP" has the meaning specified in Section 1.03.
"Group" has the meaning specified in Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder, as in effect on the date hereof.
"Guarantor" means each present and future direct or indirect
Subsidiary of the Borrower, other than the Excluded Subsidiaries and any Foreign
Subsidiary.
"Guaranty" has the meaning specified in Section 4.01(h)(ix), and
includes any amendment to Guaranty delivered hereunder.
"Hazardous Materials" means (a) petroleum or petroleum products,
natural or synthetic gas, asbestos in any form that is or could become friable,
urea formaldehyde foam insulation and radon gas, (b) any substances defined as
or included in the definition of "hazardous substances," "hazardous wastes,"
"hazardous materials," "extremely hazardous wastes," "restricted hazardous
wastes," "toxic substances," "toxic pollutants," "contaminants" or "pollutants,"
or words of similar import, under any Environmental Law and (c) any other
substance exposure to which is regulated under any Environmental Law.
"Headquarters Property" means the real property and improvements
located at 9330 Balboa Avenue, San Diego, California.
"Hedge Agreements" means Interest Rate Contracts and Currency Hedging
Agreements.
"Inactive Foreign Subsidiaries" means Foodmaker Franchising Overseas
Limited, a British Virgin Islands corporation, and Foodmaker International (Hong
Kong), Ltd., a Hong Kong corporation.
"Inactive Subsidiaries" means CP Distribution Co., a Delaware
corporation, CP Wholesale Co., a Delaware corporation, Foodmaker International
Franchising, a Delaware corporation, Jack In The Box, Inc., a New Jersey
corporation, and the Inactive Foreign Subsidiaries.
12
<PAGE>
"Indemnified Party" has the meaning specified in Section 9.04(b).
"Information Memorandum" means the information memorandum dated March
1998 used by the Agent in connection with the syndication of the Commitments.
"Initial Lenders" has the meaning specified in the recital of parties
to this Agreement.
"Insufficiency" means, with respect to any Plan, the amount, if any,
of its unfunded benefit liabilities, as defined in Section 4001(a)(18) of ERISA,
computed using assumptions required by the PBGC.
"Interest Period" has the meaning specified in Section 2.06(b).
"Interest Rate Contracts" means interest rate swap, cap or collar
agreements, interest rate future or option contracts and other similar
agreements.
"Interest Type" refers to the distinction between Advances bearing
interest at the Base Rate and Advances bearing interest at the Eurodollar Rate.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder.
"Investment" in any Person means any loan or advance to such Person,
any purchase or other acquisition of any capital stock, warrants, rights,
options, obligations or other securities of such Person, any capital
contribution to such Person or any other investment in such Person, including,
without limitation, any arrangement pursuant to which the investor incurs Debt
of the types referred to in clauses (i) and (j) of the definition of "Debt" in
respect of such Person; provided, however, that the term "Investment" shall not
include any of (a) advances to customers, suppliers, franchisees or contractors
in the ordinary course of business that are, in conformity with GAAP, recorded
as accounts receivable, prepaid expenses or deposits on the balance sheet of the
Borrower or its Subsidiaries, (b) any obligations of the Borrower or its
Subsidiaries with respect to any CRC Excluded Debt or (c) any Permitted
Refinancing.
"Issue" means, with respect to any Letter of Credit, either issue such
Letter of Credit, extend the expiry of such Letter of Credit (other than any
such extension occurring pursuant to the terms of such Letter of Credit), renew
such Letter of Credit (other than any such renewal occurring pursuant to the
terms of such Letter of Credit), or increase the amount of such Letter of
Credit, and the terms "Issued", "Issuing", and "Issuance" shall have
corresponding meanings.
"Issuing Bank" means the L/C Bank and any other Revolving Lender that
is a commercial bank, acting through a domestic branch, as issuer of a Letter of
Credit.
13
<PAGE>
"Lender Party" means any Lender or any Issuing Bank.
"Lenders" means the Initial Lenders and each Eligible Assignee that
shall become a party hereto pursuant to Section 9.07.
"L/C Advance" means a payment made by an Issuing Bank under a Letter
of Credit.
"L/C Bank" means NationsBank in its capacity as an Issuing Bank.
"L/C Cash Collateral Account" has the meaning specified in Section
7.02.
"L/C Related Documents" has the meaning specified in Section 3.04(a).
"L/C Sublimit" means $25,000,000 as such amount may be reduced
pursuant to Section 2.04.
"Letter of Credit" means any letter of credit issued hereunder.
"Letter of Credit Agreement" has the meaning specified in Section
3.02(a).
"Letter of Credit Facility" means the amount of Letters of Credit the
Issuing Banks may elect to issue pursuant to Section 3.01.
"Letter of Credit Obligations" means, as of any date of determination
with respect to any Letter of Credit, the sum of (a) the then outstanding
Available Amount of such Letter of Credit, and (b) the aggregate amount of the
Unreimbursed Letter of Credit Liability thereunder.
"Letter of Credit Subfacility" has the meaning specified in Section
3.01.
"Lien" means any lien, security interest or other charge or
encumbrance of any kind, or any other type of preferential arrangement,
including, without limitation, the lien or retained security title of a
conditional vendor and any easement, right of way or other encumbrance on title
to real property.
"Loan Documents" means this Agreement, the Notes, the Guaranty, the
Collateral Documents and each Letter of Credit Agreement.
"Loan Parties" means the Borrower, the Guarantors and any other
Subsidiary of the Borrower that is, from time to time, a party to a Loan
Document (including pursuant to Section 6.01(l) hereof).
"Margin Stock" has the meaning specified in Regulation U.
14
<PAGE>
"Material Adverse Change" means any material adverse change in the
business, condition (financial or otherwise), operations, performance,
properties or prospects of the Borrower and its Subsidiaries taken as a whole.
"Material Adverse Effect" means a material adverse effect on (a) the
business, condition (financial or otherwise), operations, performance,
properties or prospects of the Borrower and its Subsidiaries taken as a whole,
(b) the rights and remedies of the Agent or any Lender Party under any Loan
Document or (c) the ability of any Loan Party to perform its Obligations under
any Loan Document to which it is or is to be a party.
"Mortgage" has the meaning specified in Section 4.01(h)(viii).
"Mortgage Policy" has the meaning specified in Section 4.01(h)(viii).
"Multiemployer Plan" of any Person means a multiemployer plan, as
defined in Section 4001(a)(3) of ERISA, to which such Person or any of its ERISA
Affiliates is making or accruing an obligation to make contributions, or has
within any of the preceding six plan years made or accrued an obligation to make
contributions.
"Multiple Employer Plan" of any Person means a single employer plan,
as defined in Section 4001(a)(15) of ERISA, that (a) is maintained for employees
of such Person or any of its ERISA Affiliates and at least one Person other than
such Person and its ERISA Affiliates or (b) was so maintained and in respect of
which such Person or any of its ERISA Affiliates could have liability under
Section 4064 or 4069 of ERISA in the event such plan has been or were to be
terminated.
"Net Cash Proceeds" means, with respect to any sale, lease, transfer
or other disposition of any asset or the sale or issuance of any Debt or capital
stock, any securities convertible into or exchangeable for capital stock or any
warrants, rights or options to acquire capital stock by any Person, the
aggregate amount of cash received from time to time by or on behalf of such
Person in connection with such transaction after deducting therefrom only (a)
reasonable and customary brokerage commissions, underwriting fees and discounts,
legal fees, finder's fees and other similar fees and commissions and (b) the
amount of taxes payable in connection with or as a direct result of such
transaction and (c) the amount of any Debt secured by a Lien on such asset that,
by the terms of such transaction, is required to be repaid upon such
disposition, in each case with respect to the foregoing clauses (a) and (c) to
the extent, but only to the extent, that the amounts so deducted are, at the
time of receipt of such cash, actually paid to a Person that is not an Affiliate
and are properly attributable to such transaction or to the asset that is the
subject thereof; provided, however, that Net Cash Proceeds shall not include any
such cash received by or on behalf of such Person with respect to (i) the
Existing Warrants or (ii) any securities convertible into or exchangeable for
capital stock issued to any officer, director, employee or consultant of such
Person or any warrants, rights or options to acquire capital stock issued to any
officer, director, employee or consultant of such Person to the extent permitted
under 6.02(g).
"Note" means a Revolving Note or a Swing Line Note.
15
<PAGE>
"Notice of Borrowing" means a notice in substantially the form of
Exhibit B-1.
"Notice of Issuance" means a notice in substantially the form of
Exhibit C.
"Notice of Swing Line Borrowing" means either (a) a notice
substantially in the form of Exhibit B-2, or (b) notice by teletransmission or
telephonic notice of the information required by Exhibit B-2.
"Obligation" means, with respect to any Person, any obligation of such
Person of any kind, including, without limitation, any liability of such Person
on any claim, whether or not the right of any creditor to payment in respect of
such claim is reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, disputed, undisputed, legal, equitable, secured or unsecured, and
whether or not such claim is discharged, stayed or otherwise affected by any
proceeding referred to in Section 7.01(f). Without limiting the generality of
the foregoing, the Obligations of the Loan Parties under the Loan Documents
include (a) the obligation to pay principal, interest, Letter of Credit
commissions, charges, expenses, fees, attorneys' fees and disbursements,
indemnities and other amounts payable by any Loan Party under any Loan Document
and (b) the obligation to reimburse any amount in respect of any of the
foregoing that any Lender Party, in its sole discretion, may elect to pay or
advance on behalf of such Loan Party.
"Other Taxes" has the meaning specified in Section 2.10(b).
"PBGC" means the Pension Benefit Guaranty Corporation.
"Permitted CRC Transaction" shall mean any transaction under which
(i) the Borrower or any Excluded Subsidiary purchases from CRC-I, CRC-II or any
Excluded Subsidiary (whether existing as of the Closing Date or formed after the
Closing Date) some or all of the estates for years owned as of the Closing Date
by any of CRC-I, CRC-II or any Excluded Subsidiary or (ii) the Borrower or any
Excluded Subsidiary is or becomes a party to any CRC Lease (whether by
assignment, novation or otherwise).
"Permitted Encumbrances" means: (a) Liens for taxes, assessments and
governmental charges or levies not yet due and payable or which are being
contested in good faith by appropriate proceedings, provided that adequate
reserves with respect thereto are maintained on the books of the Borrower or its
Subsidiaries, as applicable, in conformity with GAAP; (b) Liens imposed by law,
such as materialmen's, mechanics', carriers', workmen's and repairmen's Liens
and other similar Liens arising in the ordinary course of business securing
obligations that are not overdue for a period of more than 30 days or which are
being contested in good faith by appropriate proceedings; (c) Liens, pledges or
deposits to secure obligations under workers' compensation laws or similar
legislation or to secure the performance of bids, trade contracts (other than
for borrowed money), leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature incurred in the
ordinary course of business; (d) easements, rights-of-way, restrictions and
other similar encumbrances incurred in the ordinary course of business which, in
the aggregate, are not substantial in amount and which do not in any case
materially detract from the value of the property subject thereto or materially
16
<PAGE>
interfere with the ordinary conduct of the business of the Borrower or such
Subsidiary; (e) attachment or judgment Liens not giving rise to a Default or
Event of Default; and (f) leases or subleases granted to others not interfering
with the ordinary conduct of business of the Borrower or any of its
Subsidiaries.
"Permitted Liens" means: (a) Permitted Encumbrances; (b) Liens in
favor of a trustee in an indenture relating to the Borrower's public Debt to the
extent such Liens secure customary compensation and reimbursement obligations of
such trustee under such indenture; (c) Liens arising in connection with
obligations under Capitalized Leases permitted hereunder, provided that no such
Liens shall cover or extend to assets other than assets subject to such
Capitalized Leases and the proceeds thereof; (d) any mortgage, encumbrance or
other Lien upon, or security interest in, any property hereafter acquired by the
Borrower or its Subsidiaries, created contemporaneously with such acquisition to
secure or provide for the payment or financing of any part of the purchase price
thereof, or the assumption of any Lien upon, or security interest in, any such
property hereafter acquired existing at the time of such acquisition, or the
acquisition of any such property subject to any Lien without the assumption
thereof or any Permitted Refinancing thereof; provided, that (A) the Debt
secured by any such Lien shall not exceed $5,000,000 individually or $15,000,000
in the aggregate in any fiscal year of the Borrower and (B) each such Lien shall
attach only to the property so acquired and fixed improvements thereon; (e)
existing Liens (not attaching to any Collateral) on properties of the Borrower
or its Subsidiaries constituting direct or indirect security for the CRC Notes
and existing Liens (not attaching to any Collateral) pursuant to the CRC Leases;
(f) existing Liens (not attaching to any Collateral) with respect to sale-
leaseback transactions consummated by the Borrower prior to the Closing Date;
and (g) Liens existing on the date hereof described on Schedule 1.01(c) and
other Liens existing on the date hereof securing Debt in an aggregate principal
amount not to exceed $10,000,000 at any time outstanding.
"Permitted Refinancing" shall mean any refinancing of existing Debt
(other than the Existing Senior Notes) in which (a) the principal amount of Debt
resulting from such refinancing does not exceed the sum of (i) the principal
amount of Debt so refinanced plus (ii) customary fees and expenses incurred in
connection with such refinancing, (b) the maturity of the Debt resulting from
such refinancing does not occur sooner than the maturity of the Debt so
refinanced, (c) (i) Debt ranking subordinate to the Advances and Letter of
Credit Obligations is replaced with other subordinated Debt which constitutes
Permitted Subordinated Debt, (ii) Debt ranking pari passu with the Advances and
Letter of Credit Obligations is replaced with either subordinated Debt which
constitutes Permitted Subordinated Debt or pari passu Debt and (iii) Debt
secured by a Permitted Lien is replaced by Debt with no greater security than
the Debt being replaced, and (d) the direct obligors therefor do not change.
"Permitted Sale-Leaseback Repurchase" means any repurchase by the
Borrower or any of its Subsidiaries of a restaurant formerly sold by the
Borrower or any of its Subsidiaries to a third party and at such time leased
back to the Borrower or such Subsidiary; provided, however, that if the
restaurant subject thereto is not re-sold by the Borrower or any such Subsidiary
to a third party within twenty-four (24) months of such repurchase then (a) such
repurchase as of the end of such twenty-fourth (24th) month shall cease to
17
<PAGE>
qualify as a Permitted Sale-Leaseback Repurchase and (b) the amount of such
repurchase shall constitute a Capital Expenditure deemed to be made in its
entirety on the last day of such twenty-four (24) month period.
"Permitted Sale-Leaseback Transaction" means any sale and leaseback
transaction with any Person providing for the leasing by the Borrower or any of
its Subsidiaries of real or personal property which has been sold by the
Borrower or such Subsidiary for fair value for cash consideration only to such
Person in an aggregate amount of gross proceeds for all such sales in any period
set forth below not to exceed the amount set forth below for such period:
Fiscal Year
Ending In Amount
----------- ------------
1998 $90,000,000
1999 $100,000,000
2000 $120,000,000
2001 $150,000,000
2002 $150,000,000
2003 $150,000,000
"Permitted Subordinated Debt" means (A) senior subordinated notes of
the Borrower due 2008 issued on terms and conditions substantially as set forth
in the Offering Memorandum dated March 27, 1998 and in the draft indenture
relating thereto delivered to the Lender Parties prior to the date hereof (with
no changes to clause (i) of the second paragraph of Section 4.07(a) of such
draft indenture), and (B) any other Debt of any Loan Party that (i) is
subordinated to the Obligations of the Loan Parties under the Loan Documents on
terms and conditions satisfactory to the Required Lenders, (ii) requires no
scheduled principal payments prior to, and has a final maturity date at least 12
months after, the Termination Date, determined as of the date of incurrence, and
(iii) otherwise contains terms and conditions reasonably satisfactory to the
Required Lenders.
"Person" means an individual, partnership, limited liability company,
corporation (including a business trust), joint stock company, trust,
unincorporated association, joint venture or other entity, or a government or
any political subdivision or agency thereof.
"Plan" means a Single Employer Plan or a Multiple Employer Plan.
"Preferred Stock" means, with respect to any corporation, capital
stock issued by such corporation that is entitled to a preference or priority
over any other capital stock issued by such corporation upon any distribution of
such corporation's assets, whether by dividend or upon liquidation.
"Projections" means the Projected Financial Data and Assumptions
contained in Section IX of the Information Memorandum.
"Pro Rata Share" of any amount means, with respect to any Lender at
any time, the product of (a) a fraction the numerator of which is such Lender's
18
<PAGE>
Revolving Commitment (without giving effect to any termination thereof pursuant
to Section 7.01) at such time and the denominator of which is the Revolving
Facility (without giving effect to any termination of Commitments pursuant to
Section 7.01) at such time times (b) such amount.
"Redeemable" means, with respect to any capital stock, Debt or other
right or Obligation, any such right or Obligation that (a) the issuer has
undertaken to redeem at a fixed or determinable date or dates, whether by
operation of a sinking fund or otherwise, or upon the occurrence of a condition
not solely within the control of the issuer or (b) is redeemable at the option
of the holder.
"Redemption Amount" means $125,000,000, which represents the amount
payable by, or on behalf of, the Borrower in order to redeem, repurchase or
repay 100% of the Borrower's Existing Senior Notes; provided that, for purposes
of determining the Unused Revolving Commitment of each Revolving Lender, the
Redemption Amount shall be reduced on each Redemption Deposit Date by an amount
equal to the aggregate principal amount of Existing Senior Notes to be redeemed
on the related Redemption Date (but only to the extent such aggregate principal
amount is deposited with the trustee under, and in accordance with, the Existing
Senior Note Indenture).
"Redemption Date" means a date specified in a Redemption Notice as a
date on which Existing Senior Notes are to be redeemed by the Borrower.
"Redemption Deposit Date" means the last date on which the Redemption
Amount or any portion thereof is required to be deposited by the Borrower with
the trustee or paying agent under the Existing Senior Note Indenture pursuant to
Section 3.04 of the Existing Senior Note Indenture in order to redeem Existing
Senior Notes on any Redemption Date.
"Redemption Notice" means a notice of redemption pursuant to which the
Borrower (or the trustee under the Existing Senior Note Indenture on behalf of
the Borrower) has given irrevocable notice (pursuant to Sections 3.03 and 3.05
of the Existing Senior Note Indenture) to the holders of the Existing Senior
Notes that Existing Senior Notes are to be redeemed by the Borrower on the
Redemption Date specified therein.
"Register" has the meaning specified in Section 9.07(c).
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Required Lenders" means at any time Lender Parties owed or holding
more than 50% of the sum of (a) the aggregate principal amount of the Advances
outstanding at such time and (b) the aggregate Available Amount of all Letters
of Credit outstanding at such time, or, if no such principal amount and no
Letters of Credit are outstanding at such time, Lenders holding more than 50% of
the aggregate Commitments under all the Facilities at such time. For purposes of
this definition, the Available Amount of each Letter of Credit and the aggregate
principal amount of all outstanding Swing Line Advances shall be considered to
be owed to the Revolving Lenders ratably in accordance with their respective
Revolving Commitments.
19
<PAGE>
"Revolving Advance" has the meaning specified in Section 2.01(a).
"Revolving Borrowing" means a borrowing consisting of simultaneous
Revolving Advances of the same Interest Type made by the Revolving Lenders.
"Revolving Commitment" means, (i) with respect to any Revolving Lender
listed on Schedule I, the amount set forth opposite such Lender's name on
Schedule I under the caption "Revolving Commitment," (ii) with respect to any
Revolving Lender not listed on Schedule I hereto, the amount set forth in the
Assignment and Acceptance pursuant to which such Person became a Revolving
Lender hereunder, or (iii) if any of such Lenders has entered into one or more
Assignments and Acceptances, the amount set forth for such Lender in the
Register maintained by the Agent pursuant to Section 9.07(c) as such Lender's
"Revolving Commitment", in the case of each of the foregoing clauses (i), (ii)
and (iii), as such amount may be reduced at or prior to such time pursuant to
Section 2.04.
"Revolving Commitment Termination Date" means March 30, 2003.
"Revolving Facility" means, at any time, the aggregate amount of the
Revolving Lenders' Revolving Commitments at such time.
"Revolving Lender" means any Lender that has a Revolving Commitment.
"Revolving Note" means a promissory note of the Borrower payable to
the order of any Revolving Lender, in substantially the form of Exhibit D-1
hereto, evidencing the aggregate indebtedness of the Borrower to such Lender
resulting from the Revolving Advances made by such Lender.
"Security Agreement" has the meaning specified in Section
4.01(h)(vii).
"Single Employer Plan" of any Person means a single employer plan, as
defined in Section 4001(a)(15) of ERISA, that (a) is maintained for employees of
such Person or any of its ERISA Affiliates and no Person other than such Person
and its ERISA Affiliates or (b) was so maintained and in respect of which such
Person or any of its ERISA Affiliates could have liability under Section 4069 of
ERISA in the event such plan has been or were to be terminated.
"Solvent" and "Solvency" mean, with respect to any Person on a
particular date, that on such date (a) the fair value of the property of such
Person is greater than the total amount of liabilities, including, without
limitation, contingent liabilities, of such Person, (b) the present fair salable
value of the assets of such Person is not less than the amount that will be
required to pay the probable liability of such Person on its debts as they
become absolute and matured, (c) such Person does not intend to, and does not
believe that it will, incur debts or liabilities beyond such Person's ability to
pay as such debts and liabilities mature and (d) such Person is not engaged in
business or a transaction, and is not about to engage in business or a
transaction, for which such Person's property would constitute an unreasonably
small capital. The amount of contingent liabilities at any time shall be
computed as the amount that, in the light of all the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability.
20
<PAGE>
"Subsidiary" of any Person means any corporation, partnership, limited
liability company, joint venture, trust or estate of which (or in which) more
than 50% of (a) the issued and outstanding capital stock having ordinary voting
power to elect a majority of the Board of Directors of such corporation
(irrespective of whether at the time capital stock of any other class or classes
of such corporation shall or might have voting power upon the occurrence of any
contingency) (b) the interest in the capital or profits of such partnership,
limited liability company or joint venture or (c) the beneficial interest in
such trust or estate is at the time directly or indirectly owned or controlled
by such Person, by such Person and one or more of its other Subsidiaries or by
one or more of such Person's other Subsidiaries.
"Surviving Debt" has the meaning specified in Section 4.01(c).
"Surviving Debt Agreement" means any agreement or instrument setting
forth the terms and conditions of any Surviving Debt.
"Swing Line Advance" means an advance by a Swing Line Lender to the
Borrower pursuant to Section 2.01(b).
"Swing Line Borrowing" means a borrowing consisting of simultaneous
Swing Line Advances made by the Swing Line Lender.
"Swing Line Commitment" means, with respect to the Swing Line Lender
at any time, the amount set forth opposite such Lender's name on Schedule I
hereto under the caption "Swing Line Commitment" or, if such Lender has entered
into one or more Assignments and Acceptances with respect to the Swing Line
Commitment, the amount set forth for the Swing Line Lender in the Register
maintained by the Agent pursuant to Section 9.07(c) as such Lender's "Swing Line
Commitment", in each case as such amount may be reduced at or prior to such time
pursuant to Section 2.04.
"Swing Line Facility" means, at any time, the aggregate amount of the
Swing Line Lender's Swing Line Commitment at such time.
"Swing Line Lender" means NationsBank and any assignee of the Swing
Line Commitment which assumes such Swing Line Commitment in accordance with the
terms of Section 9.07.
"Taxes" has the meaning specified in Section 2.10(a).
"Termination Date" means the earlier of March 31, 2003 and the date of
termination in whole of the Revolving Commitments pursuant to Section 2.04 or
7.01.
"Total Funded Debt to EBITDA Ratio" means the ratio of (i) Funded Debt
of the Borrower and its Subsidiaries on a Consolidated basis, to (ii)
Consolidated EBITDA of the Borrower and its Subsidiaries, in each case for the
period of the then most recently ended period of four consecutive fiscal
quarters of the Borrower.
21
<PAGE>
"Unreimbursed Letter of Credit Liability" means, as of any date of
determination with respect to any Letter of Credit, the aggregate amount of all
L/C Advances which have been made by, and not reimbursed to, the Issuing Bank
under such Letter of Credit.
"Unused Revolving Commitment" means, with respect to any Revolving
Lender at any time, (a) such Lender's Revolving Commitment at such time, minus
(b) the sum of (i) the aggregate principal amount of all Revolving Advances of
such Lender outstanding at such time, plus (ii) such Lender's Pro Rata Share of
the aggregate Letter of Credit Obligations outstanding at such time, plus, (iii)
such Lender's Pro Rata share of all Swing Line Advances outstanding at such
time, plus (iv) such Lender's Pro Rata Share of the Redemption Amount in effect
at such time.
"Unused Swing Line Commitment" means, with respect to the Swing Line
Lender at any time, the lesser of (i) the remainder of (a) such Lender's Swing
Line Commitment at such time, minus (b) the aggregate principal amount of all
Swing Line Advances made by such Lender and outstanding at such time, and (ii)
the aggregate Unused Revolving Commitments at such time.
"Voting Stock" means capital stock issued by a corporation, or
equivalent interests in any other Person, the holders of which are ordinarily,
in the absence of contingencies, entitled to vote for the election of directors
(or persons performing similar functions) of such Person, even though the right
so to vote has been suspended by the happening of such a contingency.
"Welfare Plan" means a welfare plan, as defined in Section 3(1) of
ERISA.
"Withdrawal Liability" has the meaning specified in Part I of Subtitle
E of Title IV of ERISA.
Section 1.02. Computation of Time Periods. In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
mean "to but excluding".
Section 1.03. Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with generally
accepted accounting principles consistent with those applied in the preparation
of the financial statements referred to in Section 5.01(f) ("GAAP").
Section 1.04. Other Definitional Provisions. References to Sections
and subsections shall be to Sections and subsections, respectively, of this
Agreement unless otherwise specified. The term "including" means including
without limitation.
22
<PAGE>
ARTICLE II.
AMOUNTS AND TERMS OF THE ADVANCES
Section 2.01. The Advances.
(a) Revolving Advances. Each Revolving Lender severally agrees, on
the terms and conditions hereinafter set forth, to make advances (each a
"Revolving Advance") to the Borrower from time to time on any Business Day
during the period from the Closing Date until the Revolving Commitment
Termination Date in an amount for each such Advance not to exceed such Lender's
Unused Revolving Commitment on such Business Day after giving effect to any
repayment of Swing Line Advances made or to be made with the proceeds thereof
pursuant to a designation therefor set forth by the Borrower in a Notice of
Borrowing for such Borrowing or pursuant to a Notice of Borrowing given by the
Agent in accordance with Section 2.02(f). Each Revolving Borrowing shall be in
an aggregate amount of $5,000,000 or an integral multiple of $1,000,000 in
excess thereof and shall consist of Revolving Advances made by the Lenders
ratably according to their respective Revolving Commitments. Within the limits
of each Revolving Lender's Unused Revolving Commitment in effect from time to
time, the Borrower may borrow under this Section 2.01(a), prepay pursuant to
Section 2.05 and reborrow under this Section 2.01(a).
(b) Swing Line Advances. The Swing Line Lender agrees, on the terms
and conditions hereinafter set forth, to make advances (each a "Swing Line
Advance") to the Borrower from time to time on any Business Day during the
period from the Closing Date until the Termination Date in an amount not to
exceed the Swing Line Lender's Unused Swing Line Commitment on such Business
Day. Each Swing Line Borrowing shall consist of Base Rate Advances and shall be
in an amount equal to $1,000,000 or an integral multiple of $500,000 in excess
thereof. Immediately upon the making of each Swing Line Advance by the Swing
Line Lender, the Swing Line Lender shall be deemed to have sold and transferred
to each Lender, and each Lender shall be deemed to have purchased and received
from the Swing Line Lender, in each case irrevocably and without any further
action by any party, an undivided interest and participation in such Swing Line
Advance and the Obligations of the Borrower under this Agreement in respect
thereof in an amount equal to such Lender's Pro Rata Share of such Swing Line
Advance; provided, however, that (i) no Lender shall be required to fund its
participation in any such Swing Line Advance until demand therefor is made by
the Agent pursuant to Section 2.02(f)(ii) hereof, and (ii) no Lender shall be
entitled to share in any payments of principal or interest in respect of its
participation in any such Swing Line Advance except to the extent set forth in
Section 2.02(f)(ii) hereof with respect to any such participation which has been
funded by such Lender as provided therein. Within the limits of the Swing Line
Lender's Unused Swing Line Commitment in effect from time to time, the Borrower
may borrow under this Section 2.01(b), prepay pursuant to Section 2.05 and
reborrow under this Section 2.01(b).
Section 2.02. Making the Advances.(a) Initial Borrowings. The
initial Borrowings hereunder shall be made on the Closing Date and shall be made
on notice received by the Agent from the Borrower (pursuant to a Notice of
Borrowing) not later than 12:00 noon (Dallas, Texas time) (or such later time
as the Agent may agree) on the Business Day immediately preceding the Closing
23
<PAGE>
Date. Such Notice of Borrowing shall be irrevocable upon receipt by the Agent.
Each Lender shall, before 12:00 noon (Dallas, Texas time) on the Closing Date,
make available for the account of its Applicable Lending Office to the Agent
such Lender's ratable share of such Borrowings by depositing same day funds in
the Agent's Account.
(b) Subsequent Revolving Borrowings. Each Revolving Borrowing
occurring after the Closing Date shall be made on notice received by the Agent
from the Borrower (pursuant to a Notice of Borrowing) not later than 12:00 noon.
(Dallas, Texas time) (a) on the Business Day prior to the date of such Borrowing
if such Borrowing consists of Base Rate Advances, and (b) on the third Business
Day prior to the date of such Borrowing if such Borrowing consists of Eurodollar
Rate Advances. Each such Notice of Borrowing shall be irrevocable upon receipt
by the Agent and, in the case of any Notice of Borrowing for Eurodollar Rate
Advances, the Borrower shall indemnify each Lender against any loss, cost or
expense incurred by such Lender as a result of any failure to fulfill on or
before the date specified by such Notice of Borrowing the applicable conditions
set forth in this Section 2.02 or Article IV, including, without limitation, any
loss, cost or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by such Lender to fund the Advance to be made
by such Lender as a part of such Borrowing when such Advance, as a result of
such failure, is not made on such date.
(c) Swing Line Borrowings. Each Swing Line Borrowing shall be made
on notice received by the Agent from the Borrower (pursuant to a Notice of Swing
Line Borrowing) not later than 1:30 p.m. (Dallas, Texas time) on the date of
such Borrowing. Each such Notice of Swing Line Borrowing shall be irrevocable
upon receipt by the Agent.
(d) Advances by Lenders. If the Agent receives a Notice of
Borrowing, or a Notice of Swing Line Borrowing (or if the Agent gives a Notice
of Borrowing pursuant to Section 2.02(f)) the Agent shall promptly on the
Business Day prior to the date of such Borrowing or, if such Borrowing consists
of Eurodollar Rate Advances, the third Business Day prior to the date of such
Borrowing) give each Lender notice of such Notice of Borrowing or Notice of
Swing Line Borrowing. Each Lender shall (i) before 12:00 noon (Dallas, Texas
time) on the date of such Borrowing in the case of any Revolving Borrowing to be
made on such date, or (ii) before 4:00 p.m. (Dallas, Texas time) on the date of
such Borrowing in the case of a Swing Line Borrowing, make available for the
account of its Applicable Lending Office to the Agent such Lender's ratable
portion of such Borrowing by depositing same day funds in the Agent's Account.
Unless the Agent shall have received written notice from a Revolving Lender
prior to the date of any Revolving Borrowing hereunder that such Lender will not
make available to the Agent such Lender's ratable portion of such Borrowing, the
Agent may assume that such Lender has made such ratable portion available to the
Agent on the date of such Borrowing in accordance with the terms hereof and the
Agent may, in reliance upon such assumption, but shall not be required to, make
available to or for the account of the Borrower on such date a corresponding
amount. If and to the extent that such Lender shall not have so made such
ratable portion available to the Agent and the Agent makes such ratable portion
available to the Borrower, such Lender and the Borrower, without prejudice to
any rights or remedies that the Borrower may have against such Lender, severally
agree to repay to the Agent forthwith on demand such corresponding amount
24
<PAGE>
together with interest thereon, for each day from the date such amount is made
available to or for the account of the Borrower until the date such amount is
repaid to the Agent, at (A) in the case of the Borrower, the interest rate
applicable at the time to the Advances comprising such Borrowing, and (B) in the
case of such Lender, the Federal Funds Rate. If such Lender shall pay to the
Agent such amount, such amount so paid shall constitute such Lender's Advance as
part of the relevant Borrowing for purposes of this Agreement and, to the extent
that the Borrower previously paid such amount to the Agent, the Agent will
refund to the Borrower such amount so paid, but without interest.
(e) Disbursement of Advances. Upon fulfillment of the applicable
conditions set forth in Article IV (which fulfillment the Agent may assume in
the absence of actual knowledge, or notice received from the Borrower or the
Required Lenders, to the contrary), the Agent will make funds for any Borrowing
available to the Borrower by crediting the Borrower's Account (or to such other
accounts as may be designated from time to time in writing by the Borrower to
the Agent and approved by the Agent in writing (such approval not to be
unreasonably withheld)), subject to the Agent's receipt of funds from the
Lenders, and provided that the Agent shall first make a portion of such funds
equal to any outstanding L/C Advance under any Letter of Credit, and any
interest accrued and unpaid thereon to and as of such date, available to the
applicable Issuing Bank for reimbursement of such L/C Advance and payment of
such interest.
(f) Settlement of Swing Line Advances. (i) The Agent may, and upon
request by the Swing Line Lender the Agent shall, at any time and from time to
time, give to the Revolving Lenders and the Borrower a Notice of Borrowing for a
Borrowing of Revolving Advances which are Base Rate Advances on behalf of the
Borrower, in each case in an amount equal to the aggregate amount of Swing Line
Advances then owing by the Borrower (or such lesser amount as the Agent or the
Swing Line Lender shall specify), and the proceeds of which are to be used to
prepay such Swing Line Advances on the date of such Borrowing. Upon receipt of
any such Notice of Borrowing, each Lender (other than the Swing Line Lender)
shall (subject to Section 2.02(f)(iv)), on or before the time specified by the
Agent (which in no event shall be earlier than 11:00 a.m. nor later than 4:00
p.m. (Dallas, Texas time) on the Business Day following the date on which such
Notice of Borrowing is given), make available for the account of its Applicable
Lending Office to the Agent such Lender's Pro Rata Share of such Borrowing by
depositing same day funds in the Agent's Account. Notwithstanding any contrary
provision of this Agreement, (A) the proceeds of any such Borrowing shall be
distributed by the Agent to the Swing Line Lender (subject to Section
2.02(f)(iv)) as a prepayment of all or a portion of the then outstanding Swing
Line Advances, and (B) the outstanding Swing Line Advances of the Swing Line
Lender, in an amount equal to the Swing Line Lender's Pro Rata Share of the
aggregate amount of the Swing Line Advances to be prepaid on such date, shall be
deemed to be prepaid with the proceeds of a Revolving Advance made by the Swing
Line Lender and such portion of the Swing Line Advances deemed to be so prepaid
shall no longer be outstanding as Swing Line Advances but shall be outstanding
as Revolving Advances made by the Swing Line Lender.
25
<PAGE>
(ii) In addition to the right of the Swing Line Lender to require a
Borrowing under Section 2.02(f)(i), the Swing Line Lender may at any time and
from time to time request (by notice to the Agent and the Borrower) the Agent
to, and upon receipt of such request the Agent shall, make demand on each Lender
for payment of its participation in each Swing Line Advance then outstanding,
and upon receipt of any such demand each Lender shall (subject to Section
2.02(f)(iv)) promptly fund such participation by paying to the Agent, for the
ratable account of the Swing Line Lender (subject to Section 2.02(f)(iv)), the
amount of such participation in same day funds. With respect to each such
participation in the Swing Line Advance which is funded by any Lender, the Swing
Line Lender shall promptly pay to the Agent, and the Agent shall promptly pay to
such Lender, in lawful money of the United States and in the kind of funds so
received, an amount equal to such Lender's ratable share of all payments
received by the Swing Line Lender in respect of (A) the principal of such Swing
Line Advance, and (B) interest on such Swing Line Advance for the period from
and after the date on which such participation was funded. If any payment
received by the Swing Line Lender on account of the Swing Line Advance and
distributed to any Lender as a participant under the preceding sentence is
thereafter recovered from the Swing Line Lender in connection with any
bankruptcy or insolvency proceeding relating to the Borrower or otherwise, each
Lender which received such distribution shall, upon demand by the Swing Line
Lender through the Agent, repay to the Swing Line Lender such Lender's ratable
share of the amount so recovered together with such Lender's ratable share
(according to the proportion of (1) the amount of such Lender's required
prepayment to (2) the total amount so recovered) of any interest or other amount
paid or payable by the Swing Line Lender in respect of the total amount so
recovered. The Borrower agrees that any Lender purchasing a participation in
the Swing Line Advance from the Swing Line Lender hereunder may, to the fullest
extent permitted by law, exercise all its rights of payment with respect to such
participation as fully as if such Lender were the direct creditor of the
Borrower in the amount of such participation.
(iii) Anything contained herein to the contrary notwithstanding
(but subject to Section 2.02(f)(iv) below), the obligation of each Lender to
make any Revolving Advance pursuant to Section 2.02(f)(i) or to fund its
participation in any Swing Line Advances pursuant to Section 2.02(f)(ii) shall
be absolute and unconditional and shall not be subject to any conditions set
forth in Article IV hereof or otherwise affected by any circumstance including,
without limitation, (A) any set-off, counterclaim, recoupment, defense or other
right which such Lender may have against the Swing Line Lender or any Loan
Party; (B) the occurrence or continuance of a Default or Event of Default;
(C) any adverse change in the business, condition (financial or otherwise),
operations, performance, properties or prospects of any Loan Party; (D) any
breach of any Loan Document by the Borrower, any other Loan Party or any other
Lender Party; or (E) any other circumstance, happening or event whatsoever,
whether or not similar to any of the foregoing.
(iv) Notwithstanding Section 2.02(f)(iii) above, if at the time that
any Lender is required to make any Revolving Advance or fund any participation
pursuant to Section 2.02(f)(i) or (ii) above, the Borrower would not otherwise
be entitled to obtain a Borrowing as a result of the failure of any of the
conditions set forth in Article IV hereof, the obligation of each Lender to make
any such Revolving Advance or to fund any such participation with respect to any
26
<PAGE>
Swing Line Advance owing to the Swing Line Lender shall be subject to the
condition that at least one of the following is true: (A) the Swing Line Lender
shall have believed in good faith that all conditions under Article IV to the
making of such Swing Line Advance were satisfied at the time such Swing Line
Advance was made, or (B) such Lender shall have had actual knowledge, by receipt
of the statements required pursuant to Section 6.03 or otherwise, that any such
condition had not been satisfied and failed to notify the Swing Line Lender and
the Agent in writing that it had no obligation to make Revolving Advances until
such condition was satisfied (which notice shall be effective as of the date of
receipt by the Swing Line Lender and the Agent), or (C) the satisfaction of any
such condition not satisfied shall have been waived by the Required Lenders
prior to or at the time such Swing Line Advance was made. Anything contained in
this Section 2.02(f) to the contrary notwithstanding, the amount to be
distributed by the Agent to the Swing Line Lender under this Section 2.02(f)
shall be reduced to the extent that any Lender shall refuse to fund its portion
of any Revolving Advance or participation with respect to the Swing Line Lender
as a result of the failure of the conditions set forth above.
(v) The Borrower irrevocably authorizes (A) the Agent to give any
Notice of Borrowing pursuant to Section 2.02(f)(i) (with a copy to the
Borrower), (B) the Lenders to make the Revolving Advances pursuant to such
Notice of Borrowing, and (C) the Agent to distribute the proceeds thereof as
provided herein.
(g) Nature of Lenders' Obligations. The failure of any Lender to
make the Advance to be made by it as part of any Borrowing shall not relieve any
other Lender of its obligation, if any, hereunder to make its Advance on the
date of such Borrowing, but no Lender shall be responsible for the failure of
any other Lender to make the Advance to be made by such other Lender on the date
of any Borrowing.
Section 2.03. Repayment.
(a) Revolving Advances. The Borrower shall repay to each Lender (in
accordance with the provisions of Section 2.09(a)) on the Revolving Commitment
Termination Date the aggregate principal amount of all Revolving Advances owing
to such Lender outstanding on the Revolving Commitment Termination Date.
(b) L/C Advances. The Borrower shall repay each L/C Advance as
provided in Section 3.03.
(c) Swing Line Advances. The Borrower shall repay to the Swing Line
Lender (in accordance with the provisions of Section 2.09(a)) on the Termination
Date the aggregate principal amount of all Swing Line Advances owing to such
Lender outstanding on the Termination Date.
Section 2.04. Reduction of the Revolving Commitments, Swing Line
Commitment and Letter of Credit Subfacility.
(a) Optional Reductions. The Borrower shall have the right, upon at
least three Business Days' notice to the Agent, to terminate in whole or reduce
27
<PAGE>
ratably in part the unused portions of the respective Revolving Commitments of
the Revolving Lenders; provided, however, that (i) each partial reduction shall
be in an amount of $5,000,000 or any multiple of $1,000,000 in excess thereof,
and (ii) the aggregate amount of the Revolving Commitments shall not be reduced
pursuant to this Section 2.04 to an amount less than the sum of (A) the
aggregate principal amount of all Revolving Advances then outstanding, (B) the
aggregate amount of all Letter of Credit Obligations then outstanding, and (C)
the aggregate principal amount of all Swing Line Advances then outstanding.
(b) Mandatory Reductions. The Revolving Facility shall be
automatically and permanently reduced on a pro rata basis on each date on which
prepayment thereof is required to be made (or would be required to be made if
any Revolving Advances were then outstanding) pursuant to Section 2.05(b)(iii)
in an amount equal to the Net Cash Proceeds received by the Borrower or any of
its Subsidiaries in the transaction giving rise to such required prepayment.
Each such reduction of the Revolving Facility shall be made ratably among the
Revolving Lenders in accordance with their Revolving Commitments.
(c) Reduction of Swing Line Commitment. The Swing Line Commitment
of the Swing Line Lender shall be (i) terminated automatically and
simultaneously upon any termination in whole of the Revolving Commitments, and
(ii) reduced by an amount equal to the amount by which, as a result of any
partial reduction of the Revolving Commitments of the Lenders, the aggregate
Revolving Commitments of the Lenders are reduced below $5,000,000.
(d) Reduction of the Letter of Credit Subfacility. The Letter of
Credit Subfacility shall be (i) terminated automatically and simultaneously upon
any termination in whole of the Revolving Commitments, and (ii) reduced by an
amount equal to the amount by which, as a result of any partial reduction of the
Revolving Commitments of the Lenders, the aggregate Revolving Commitments of the
Lenders are reduced below $25,000,000 (any such reduction of the Letter of
Credit Subfacility to be effective automatically and simultaneously with any
such reduction of the Revolving Commitments).
Section 2.05. Prepayments
(a) Optional Prepayments. The Borrower may, upon prior notice to the
Agent (which may be given on the date of prepayment in the case of prepayment of
Swing Line Advances, and which shall be given at least one Business Day in
advance in the case of prepayment of Revolving Advances which consist of Base
Rate Advances and three Business Days in advance in the case of prepayment of
Revolving Advances which are Eurodollar Rate Advances, stating the proposed date
and aggregate principal amount of the prepayment and Interest Type of Advances
to be prepaid (and if such notice is given the Borrower shall), prepay in whole
or in part the outstanding principal of Advances of such Interest Type, together
with in the case of any prepayment of Eurodollar Rate Advances, interest
thereon to the date of such prepayment on the principal amounts prepaid (plus,
in the case of prepayment of Eurodollar Rate Advances prior to the end of the
applicable Interest Period, any additional amount for which the Borrower shall
be obligated pursuant to Section 9.04(c)); provided, however, that each partial
prepayment shall be in an aggregate principal amount of (i) in the case of any
28
<PAGE>
Eurodollar Rate Advance, $5,000,000 or an integral multiple of $1,000,000 in
excess thereof, and (ii) in the case of any Base Rate Advance, $1,000,000 or an
integral multiple of $1,000,000 in excess thereof.
(b) Mandatory Prepayments
(i) Excess Advances. If, at any time, the then outstanding
aggregate principal amount of all Revolving Advances shall exceed the
aggregate amount of the Revolving Commitments of the Lenders at such time
minus the sum of (i) the aggregate amount of the Letter of Credit
Obligations then outstanding and (ii) the aggregate principal amount of the
Swing Line Advances then outstanding, the Borrower shall immediately
prepay, for the ratable account of the Lenders, the outstanding principal
amount of Revolving Advances in an aggregate amount equal to such excess.
If, at any time, the then outstanding aggregate amount of all Swing Line
Advances shall exceed either (i) the Swing Line Commitment of the Swing
Line Lender, or (ii) the aggregate amount of the Revolving Commitments of
the Lenders minus the sum of (A) the aggregate amount of the Letter of
Credit Obligations then outstanding, and (B) the aggregate principal amount
of the Revolving Advances then outstanding, the Borrower shall thereupon
prepay, for the account of the Swing Line Lender, the outstanding principal
amount of Swing Line Advances in an aggregate amount equal to such excess.
(ii) Incomplete Settlement. If any Lender shall for any reason
fail to fund any participation in any Swing Line Advances, or fail to make
any Revolving Advance to be made by it pursuant to Section 2.02(f), the
Borrower shall, on demand by the Agent, prepay the Swing Line Advances then
outstanding in an amount equal to such amount.
(iii) Net Cash Proceeds. The Borrower shall, on the date of
receipt by the Borrower or any of its Subsidiaries of the Net Cash Proceeds
from (A) the sale, lease, transfer or other disposition of any assets of
the Borrower or any of its Subsidiaries (including the sale by the Borrower
or any of its Subsidiaries of the capital stock of any of their respective
Subsidiaries but excluding Excluded Asset Sales), and (B) the incurrence or
issuance by the Borrower or any of its Subsidiaries of any Debt not
permitted under Section 6.02(b) (it being understood that the provisions of
this Section 2.05(b)(iii) shall not be construed to permit the incurrence
of Debt otherwise prohibited by Section 6.02(b)) prepay the aggregate
principal amount of outstanding Revolving Advances in an amount equal to
the amount of such Net Cash Proceeds. Each such prepayment of the
Revolving Advances shall be paid ratably to each Lender in accordance with
the provisions of Section 2.09(a). Notwithstanding any contrary provision
hereof, the Net Cash Proceeds from the issuance or incurrence of Permitted
Subordinated Debt shall not be subject to mandatory prepayment pursuant to
this Section.
(iv) L/C Cash Collateral. If, at any time, the aggregate
Available Amount of all Letters of Credit then outstanding exceeds the L/C
Sublimit in effect at such time, the Borrower shall immediately pay to the
Agent for deposit in the L/C Cash Collateral Account an amount sufficient
to cause the aggregate amount on deposit in such account to equal the
amount of such excess.
29
<PAGE>
(c) Interest Payable on Amounts Prepaid. All prepayments of
Eurodollar Rate Advances under this Section 2.05 shall be made together with
accrued interest to the date of such prepayment on the principal amount prepaid.
Section 2.06. Interest. The Borrower shall pay interest on the
unpaid principal amount of each Advance from the date of such Advance until such
principal is paid in full at the applicable rate set forth below.
(a) Interest on Base Rate Advances. Except to the extent that the
Borrower shall elect to pay interest on all or any part of any Advance made or
to be made to the Borrower under Section 2.01 for any Interest Period pursuant
to subsections (b) and (c) of this Section 2.06, the Borrower shall pay interest
on the unpaid principal amount of each Advance, from the date of such Advance
until such principal amount is paid in full, payable quarterly in arrears on the
last Business Day of each March, June, September and December, commencing
June 30, 1998 and on the Revolving Commitment Termination Date, at a fluctuating
interest rate per annum equal, subject to Section 2.06(d), to the sum of the
Base Rate in effect from time to time plus the Applicable Margin for Base Rate
Advances in effect from time to time.
(b) Interest Periods for Eurodollar Rate Advances. The Borrower may,
pursuant to Section 2.06(c), elect to have the interest on the principal amount
of all or any portion of any Advances made or to be made to the Borrower under
Section 2.01, in each case ratably according to the respective outstanding
principal amounts of Advances owing to each Lender (each such principal amount
owing to a Lender as to which such election has been made being a "Eurodollar
Rate Advance" owing to such Lender) determined and payable for a specified
period (an "Interest Period" for such Eurodollar Rate Advance) in accordance
with subsection (c) below, provided, however, that the Borrower may not (i) make
any such election with respect to any Swing Line Advances, or (ii) have more
than five Eurodollar Rate Advances owing to any Lender outstanding at any one
time. Each Interest Period shall be one, two, three, or six months, at the
Borrower's election pursuant to subsection (c) below, provided, however, that:
(i) the first day of an Interest Period for any Eurodollar Rate
Advance shall be either the last day of any then current Interest Period
for such Advance or, if there shall be no then current Interest Period for
such Advance, any Business Day;
(ii) whenever the last day of any Interest Period would otherwise
occur on a day other than a Business Day, the last day of such Interest
Period shall be extended to occur on the next succeeding Business Day;
provided, however, that if such extension would cause the last day of such
Interest Period to occur in the next following month, the last day of such
Interest Period shall occur on the next preceding Business Day; and
(iii) whenever the first day of any Interest Period occurs on
a day of the month for which there is no numerically corresponding day in
30
<PAGE>
the calendar month that succeeds such initial calendar month by the number
of months equal to the number of months of such Interest Period, such
Interest Period shall end on the last Business Day of such succeeding
calendar month.
(c) Interest on Eurodollar Rate Advances. The Borrower may from time
to time, on the condition that no Event of Default has occurred and is
continuing, and subject to the provisions of Sections 2.06(b) and 2.06(e), elect
to pay interest on all or any portion of any Advances during any Interest Period
therefor at a rate per annum equal to the sum of the Eurodollar Rate for such
Interest Period for such Advances plus the Applicable Margin for Eurodollar Rate
Advances in effect from time to time, by notice, specifying the amount of the
Advances as to which such election is made (which amount shall aggregate at
least $5,000,000 or any multiple of $1,000,000 in excess thereof) and the first
day and duration of such Interest Period, received by the Agent before 12:00
noon (Dallas, Texas time) three Business Days prior to the first day of such
Interest Period. If the Borrower has made such election for Eurodollar Rate
Advances for any Interest Period, the Borrower shall pay interest on the unpaid
principal amount of such Eurodollar Rate Advances during such Interest Period,
payable in arrears on the last day of such Interest Period and, in the case of
any Interest Period which is longer than three months, on each three month
anniversary of the first day of such Interest Period, in each case at a rate
equal, subject to Section 2.06(d), to the sum of the Eurodollar Rate for such
Interest Period for such Eurodollar Rate Advances plus the Applicable Margin for
Eurodollar Rate Advances in effect from time to time during such Interest
Period. On the last day of each Interest Period for any Eurodollar Rate
Advance, the unpaid principal balance thereof shall automatically become and
bear interest as a Base Rate Advance, except to the extent that the Borrower has
elected to pay interest on all or any portion of such amount for a new Interest
Period commencing on such day in accordance with this Section 2.06(c). Each
notice by the Borrower under this Section 2.06(c) shall be irrevocable upon
receipt by the Agent, and the Borrower shall indemnify each Lender against any
out-of-pocket loss, cost or expense incurred by such Lender as a result of any
failure to fulfill on or before the date specified by such notice the applicable
conditions set forth in this Section 2.06(c) or Article IV, including, without
limitation, any out-of-pocket loss, cost or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by such Lender
to fund any such Eurodollar Rate Advance when such Eurodollar Rate Advance, as
a result of such failure, is not made or does not become effective.
(d) Default Interest. Upon the occurrence and during the continuance
of an Event of Default, the Borrower shall, at the dates set forth herein for
the payment of interest and upon demand, (i) pay interest on all Base Rate
Advances and any other amounts owing hereunder not paid when due (other than
then outstanding Eurodollar Rate Advances) at a rate per annum (the "Default
Rate") equal at all times to the rate otherwise applicable to Base Rate Advances
plus 2.00% per annum, and (ii) pay interest on each then outstanding Eurodollar
Rate Advance at a rate per annum equal at all times to the rate otherwise
applicable to such Eurodollar Rate Advance plus 2.00% per annum.
31
<PAGE>
(e) Suspension of Eurodollar Rate Advances.
(i) Illegality. Notwithstanding any other provision of this
Agreement, if the introduction of or any change in or in the interpretation
of any law or regulation shall make it unlawful, or any central bank or
other governmental authority shall assert that it is unlawful, for any
Lender or its Eurodollar Lending Office to perform its obligations
hereunder to make Eurodollar Rate Advances or to continue to fund or
maintain Eurodollar Rate Advances hereunder, then, on notice thereof and
demand therefor by such Lender to the Borrower through the Agent, (i) each
Eurodollar Rate Advance made by such Lender will automatically, upon such
demand, Convert into a Base Rate Advance and (ii) the obligation of such
Lender to make, or to Convert Advances into, Eurodollar Rate Advances shall
be suspended (and such Lender shall make its portion of any Borrowing
available as a Base Rate Advance) until the Agent shall notify the Borrower
that such Lender has determined that the circumstances causing such
suspension no longer exist; provided, however, that, before making any such
demand, such Lender agrees to use reasonable efforts (consistent with its
internal policy and legal and regulatory restrictions) to designate a
different Eurodollar Lending Office if the making of such a designation
would allow such Lender or its Eurodollar Lending Office to continue to
perform its obligations to make Eurodollar Rate Advances or to continue to
fund or maintain Eurodollar Rate Advances and would not, in the judgment of
such Lender, be otherwise disadvantageous to such Lender.
(ii) Other Circumstances. If, with respect to any Eurodollar
Rate Advances, (A) the Administrative Agent shall determine in good faith
(which determination shall be conclusive) that the Eurodollar Rate cannot
be determined in accordance with the definition thereof, or (B) the
Required Lenders notify the Agent that the Eurodollar Rate for any Interest
Period for such Advances will not adequately reflect the cost to such
Lenders of making, funding or maintaining their Eurodollar Rate Advances
for such Interest Period, the Agent shall forthwith so notify the Borrower
and the Lenders, whereupon (i) each such Eurodollar Rate Advance will
automatically, on the last day of the then existing Interest Period
therefor, Convert into a Base Rate Advance and (ii) the obligation of the
Lenders to make, or to Convert Advances into, Eurodollar Rate Advances
shall be suspended until the Agent shall notify the Borrower that such
Lenders have determined that the circumstances causing such suspension no
longer exist.
(iii) Suspension on Event of Default. Upon the occurrence
and during the continuance of any Event of Default, (i) each Eurodollar
Rate Advance will automatically, on the last day of the then existing
Interest Period therefor, convert into a Base Rate Advance and (ii) the
obligation of the Lenders to make, or to convert Advances into, Eurodollar
Rate Advances shall be suspended.
Section 2.07. Fees.
(a) Commitment Fees. The Borrower agrees to pay to the Agent a
commitment fee on the average daily amount of each Lender's Revolving
32
<PAGE>
Commitment less the sum of (i) Revolving Advances made by such Lender and
outstanding from time to time, (ii) such Lender's Pro Rata Share of the
aggregate Letter of Credit Obligations outstanding from time to time, and (iii)
in the case of the Swing Line Lender only, such Lender's Pro Rata Share of any
Swing Line Advances, for the account of such Lender, from the Closing Date in
the case of each Initial Lender and from the effective date specified in the
Assignment and Acceptance pursuant to which it became a Lender in the case of
each other Lender until the Revolving Commitment Termination Date, at the rate
per annum equal to the Commitment Fee Percentage in effect from time to time,
payable in arrears on the last Business Day of each March, June, September and
December, commencing June 30, 1998 and, and on the Revolving Commitment
Termination Date.
(b) Agent's Fees. The Borrower agrees to pay to the Agent, for its
own account, (i) the fees in the amounts and at the times set forth in the
letter dated February 10, 1998 from NationsBank and the Arranger, to the
Borrower, and agreed to and accepted by the Borrower on February 10, 1998, and
(ii) such other fees as may from time to time be agreed between the Borrower and
the Agent.
(c) Absolute Obligation. The Borrower's obligation hereunder to pay
the fees referred to in this Section 2.07 shall be absolute and unconditional
and shall survive the making and repayment of Advances, the termination of all
Letter of Credit Obligations and the termination of this Agreement. All fees
which are due or become due pursuant to this Section 2.07 are nonrefundable.
Section 2.08. Increased Costs, Etc.
(a) Increased Costs. If, due to either (i) the introduction of or
any change in or in the interpretation of any law or regulation or (ii) the
compliance with any guideline or request from any central bank or other
governmental authority (whether or not having the force of law), in any case
occurring on or after the Closing Date, there shall be any increase in the cost
to any Lender Party of agreeing to make or of making, funding or maintaining
Eurodollar Rate Advances or of agreeing to issue or of issuing or maintaining
Letters of Credit (or of agreeing to purchase or purchasing participations
therein) or of agreeing to make or of making or maintaining L/C Advances (or of
agreeing to purchase or purchasing participations therein), then the Borrower
shall from time to time, upon demand by such Lender Party (with a copy of such
demand to the Agent), pay to the Agent for the account of such Lender Party
additional amounts sufficient to compensate such Lender Party for such increased
cost; provided, however, that, before making any such demand, each Lender Party
agrees to use reasonable efforts (consistent with its internal policy and legal
and regulatory restrictions) to designate a different Applicable Lending Office
if the making of such a designation would avoid the need for, or reduce the
amount of, such increased cost and would not, in the reasonable judgment of such
Lender Party, be otherwise disadvantageous to such Lender Party. A certificate
as to the amount of such increased cost, submitted to the Borrower by such
Lender Party, shall be conclusive and binding for all purposes, absent manifest
error.
33
<PAGE>
(b) Capital Requirements. If, due to either (i) the introduction of
or any change in or in the interpretation of any law or regulation or (ii) the
compliance with any guideline or request from any central bank or other
governmental authority (whether or not having the force of law), in any case
occurring on or after the Closing Date, there shall be any increase in the
amount of capital required or expected to be maintained by such Lender Party or
any corporation controlling such Lender Party as a result of or based upon the
existence of such Lender Party's commitment to lend or to issue or purchase
participations in Letters of Credit hereunder and other commitments of such type
or the issuance or maintenance of the Letters of Credit (or similar contingent
obligations), then, upon demand by such Lender Party (with a copy of such demand
to the Agent), the Borrower shall pay to the Agent for the account of such
Lender Party, from time to time as specified by such Lender Party, additional
amounts sufficient to compensate such Lender Party in the light of such
circumstances, to the extent that such Lender Party reasonably determines such
increase in capital to be allocable to the existence of such Lender Party's
commitment to lend or to issue Letters of Credit hereunder or to the issuance or
maintenance of any Letters of Credit. A certificate as to such amounts
submitted to the Borrower by such Lender Party, shall be conclusive and binding
for all purposes, absent manifest error.
(c) Limitations on Borrower's Compensation Obligations.
Notwithstanding any other provision of this Agreement to the contrary, the
Borrower shall not be obligated to make any payment to any Lender Party pursuant
to this Section 2.08 in respect of any amounts or costs accruing in or allocable
to any period prior to the 90th day preceding written demand by such Lender
Party for payment therefor (unless such amounts or costs prior to such 90th day
period result from the retroactive effect of any of the events described in the
foregoing Sections 2.08(a) or 2.08(b) giving rise to such written demand and
which occurred during such 90 day period).
Section 2.09. Payments and Computations.
(a) Payments by Borrower. The Borrower shall make each payment
hereunder and under any other Loan Document to which it is a party, irrespective
of and without condition or deduction for any counterclaim, defense, recoupment
or setoff, in lawful money of the United States and in same day funds delivered
to the Agent not later than 1:00 p.m. (Dallas, Texas time) on the day when due
by deposit of such funds to the Agent's Account. Any payment so delivered to
the Agent after 1:00 p.m. (Dallas, Texas time) on any Business Day, or on any
day which is not a Business Day, shall be deemed received by the Agent on the
next succeeding Business Day. The Agent will promptly after receipt of each
payment cause to be distributed like funds relating to the payment of principal,
interest, commitment fees or letter of credit fees ratably to each Lender for
the account of its Applicable Lending Office, and like funds relating to the
payment of any other amount payable to any Lender or any Issuing Bank (including
payments with respect to Letters of Credit and payments for the account of any
Lender under Sections 2.08, 2.10 or 9.04(c)) to such Lender for the account of
its Applicable Lending Office or to such Issuing Bank, in each case to be
applied in accordance with, and subject to, the terms of this Agreement,
including Section 2.09(e) below. Upon its acceptance of an Assignment and
Acceptance and recording of the information contained therein in the Register
34
<PAGE>
pursuant to Section 9.07(c), from and after the effective date specified in such
Assignment and Acceptance, the Agent shall make all payments hereunder and under
any other Loan Document in respect of the interest assigned thereby to the
Lender assignee thereunder, and the parties to such Assignment and Acceptance
shall make all appropriate adjustments in such payments for periods prior to
such effective date directly between themselves.
(b) Computations. All computations of interest in respect of Base
Rate Advances (and in respect of any other amount payable hereunder other than
interest in respect of Eurodollar Rate Advances and Letter of Credit fees and
commissions) and all computations in respect of commitment fees shall be made by
the Agent on the basis of a year of 365 days or 366 days, as applicable, and all
computations of interest in respect of Eurodollar Rate Advances and all
computations in respect of Letter of Credit fees and commissions shall be made
by the Agent on the basis of a year of 360 days, in each case for the actual
number of days (including the first day but excluding the last day) occurring in
the period for which such interest or fees are payable; provided that if any
Advance is repaid on the same day on which it is made, one day's interest shall
be paid on such Advance. Each determination by the Agent of an interest rate,
fee, commission or discount rate hereunder shall be conclusive and binding for
all purposes, absent manifest error.
(c) Payments Assumed. Unless the Agent shall have received notice
from the Borrower prior to the date on which any payment is due to the Lenders
or any Issuing Bank hereunder that the Borrower will not make such payment in
full, the Agent may assume that the Borrower has made such payment in full to
the Agent on such date and the Agent may, in reliance upon such assumption, but
shall not be required to, cause to be distributed to each Lender or such Issuing
Bank on such due date an amount equal to the amount then due to such Lender or
such Issuing Bank. If and to the extent that the Borrower shall not have so
made such payment in full to the Agent, each Lender and Issuing Bank shall repay
to the Agent forthwith on demand such amount distributed to such Lender or
Issuing Bank together with interest thereon, for each day from the date such
amount is distributed to such Lender or Issuing Bank until the date such Lender
or Issuing Bank repays such amount to the Agent, at the Federal Funds Rate.
(d) Application of Payments Specified by the Borrower. Except as
otherwise specified herein, so long as no Event of Default has occurred and is
continuing, all payments shall be applied as instructed by the Borrower (except
that, unless the Agent otherwise consents, outstanding Swing Line Advances shall
be prepaid before prepayment of any Revolving Advances) if such instructions are
received by the Agent prior to or contemporaneously with receipt of funds
therefor.
(e) Application of Payments Not Otherwise Specified. If the Agent
receives funds for application to the Advances or any Letter of Credit
Obligations or other Obligations of the Borrower under the Loan Documents under
circumstances for which the Loan Documents do not specify the Advances or the
Facility or the Obligations to which, or the manner in which, such funds are to
be applied, the Agent may elect to distribute such funds first, to the Issuing
Banks ratably in payment of the principal of and interest on any outstanding L/C
Advances, second, to the payment of the outstanding Swing Line Advances and
35
<PAGE>
interest thereon, third, to each Lender ratably in accordance with such Lender's
proportionate share of all Advances (other than Swing Line Advances) then
outstanding, in repayment or prepayment of such of the outstanding Advances
(other than Swing Line Advances), and for application to such principal
installments, as the Agent may direct, and thereafter ratably to the Lenders in
repayment or prepayment of any other Obligations of the Borrower then
outstanding under the Loan Documents as the Agent shall direct, provided that if
an Event of Default has occurred and is continuing and the Revolving Commitments
of the Lenders and the Swing Line Commitment of the Swing Line Lender have been
terminated in full, the Agent shall distribute any payments and any proceeds of
any collection, sale or other realization or liquidation of any Collateral
first, to the payment of all costs and expenses of the Agent under the Loan
Documents, second, to the Issuing Banks ratably in payment of the principal of
and interest on any outstanding L/C Advances, third, to the payment of the
outstanding Swing Line Advances and interest thereon, and fourth, to each Lender
ratably in accordance with such Lender's proportionate share of the principal
amount of all Advances (other than Swing Line Advances) and Letter of Credit
Obligations then outstanding, in payment or prepayment of such Obligations owed
to such Lender under the Loan Documents, and for application to such principal
installments (if applicable) as the Agent shall direct.
(f) Payments on Business Days. Whenever any payment hereunder or
under any other Loan Document shall be stated to be due on a day other than a
Business Day, such payment shall be made on the next succeeding Business Day,
and such extension of time shall in such case be included in the computation of
payment of interest and commitment and other fees; provided, however, if such
extension would cause payment of interest on or principal of any Eurodollar Rate
Advance to be made in the next following month, such payment shall be made on
the next preceding Business Day.
(g) Certain Terms. The terms "pay", "paid" or "payment" under this
Agreement shall include prepay, prepaid or prepayment, respectively, under this
Agreement, and the term "due" under this Agreement shall include due by reason
of a mandatory prepayment (including upon an actual or deemed entry of an order
for relief with respect to the Borrower or any Guarantor under the Federal
Bankruptcy Code or upon acceleration).
Section 2.10. Taxes.
(a) Withholding Taxes. Subject to Section 2.10(f), any and all
payments by the Borrower hereunder or under the Notes shall be made, in
accordance with Section 2.09, free and clear of and without deduction for any
and all present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding, in the case
of each Lender Party and the Agent, net income taxes that are imposed by the
United States and franchise taxes and net income taxes that are imposed on such
Lender Party or the Agent by the state or foreign jurisdiction under the laws of
which such Lender Party or the Agent (as the case may be) is organized or any
political subdivision thereof and, in the case of each Lender Party, franchise
taxes and net income taxes that are imposed on such Lender Party by the state or
foreign jurisdiction of such Lender Party's Applicable Lending Office or any
political subdivision thereof (all such non-excluded taxes, levies, imposts,
36
<PAGE>
deductions, charges, withholdings and liabilities being hereinafter referred to
as "Taxes"). If the Borrower shall be required by law to deduct any Taxes from
or in respect of any sum payable hereunder or under any Note to any Lender Party
or the Agent, (i) the sum payable shall be increased as may be necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section 2.10) such Lender Party or the Agent
(as the case may be) receives an amount equal to the sum it would have received
had no such deductions been made, (ii) the Borrower shall make such deductions
and (iii) the Borrower shall pay the full amount deducted to the relevant
taxation authority or other authority in accordance with applicable law.
(b) Other Taxes. In addition, the Borrower shall pay any present or
future stamp, documentary, excise, property or similar taxes, charges or levies
that arise from any payment made hereunder or under the Notes or from the
execution, delivery or registration of, or otherwise with respect to, this
Agreement or the Notes (hereinafter referred to as "Other Taxes").
(c) Indemnification. Subject to Section 2.10(f), the Borrower shall
indemnify each Lender Party and the Agent for the full amount of Taxes and Other
Taxes, and for the full amount of taxes imposed by any jurisdiction on amounts
payable under this Section 2.10, paid by such Lender Party or the Agent (as the
case may be) and any liability (including penalties, additions to tax, interest
and expenses) arising therefrom or with respect thereto. This indemnification
shall be made within 30 days from the date such Lender Party or the Agent (as
the case may be) makes written demand therefor.
(d) Evidence of Payment. Within 30 days after the date of any
payment of Taxes, the Borrower shall furnish to the Agent, at its address
referred to in Section 9.02, the original receipt of payment thereof or a
certified copy of such receipt. In the case of any payment hereunder or under
the Notes by the Borrower through an account or branch outside the United States
or on behalf of the Borrower by a payor that is not a United States person, if
the Borrower determines that no Taxes are payable in respect thereof, the
Borrower shall furnish, or shall cause such payor to furnish, to the Agent, at
such address, an opinion of counsel acceptable to the Agent stating that such
payment is exempt from Taxes. For purposes of this subsection (d) and
subsection (e), the terms "United States" and "United States person" shall have
the meanings specified in Section 7701 of the Internal Revenue Code.
(e) Foreign Lenders and Issuing Banks. Each Lender Party organized
under the laws of a jurisdiction outside the United States shall, on or prior to
the date of its execution and delivery of this Agreement in the case of each
Initial Lender, and on the date of the Assignment and Acceptance pursuant to
which it became a Lender Party in the case of each other Lender Party, and from
time to time thereafter upon the reasonable request in writing by the Borrower
or the Agent (but only so long thereafter as such Lender Party remains lawfully
able to do so), provide the Agent and the Borrower with Internal Revenue Service
form 1001 or 4224, as appropriate, or any successor form prescribed by the
Internal Revenue Service, certifying that such Lender Party is exempt from or
is entitled to a reduced rate of United States withholding tax on payments under
this Agreement or the Notes. If the form provided by a Lender Party at the time
37
<PAGE>
such Lender Party first becomes a party to this Agreement indicates a United
States interest withholding tax rate in excess of zero, withholding tax at such
rate shall be considered excluded from Taxes unless and until such Lender Party
provides the appropriate form certifying that a lesser rate applies, whereupon
withholding tax at such lesser rate only shall be considered excluded from Taxes
for periods governed by such form; provided, however, that, if at the date of
the Assignment and Acceptance pursuant to which a Lender Party assignee becomes
a party to this Agreement, the Lender Party assignor was entitled to payments
under subsection (a) in respect of United States withholding tax with respect to
interest paid at such date, then, to such extent and only to such extent, the
term Taxes shall include (in addition to withholding taxes that may be imposed
in the future or other amounts otherwise includable in Taxes) United States
withholding tax, if any, applicable with respect to the Lender Party assignee on
such date. If any form or document referred to in this Section 2.10(e) requires
the disclosure of information, other than information necessary to compute the
tax payable and information required on the date hereof by Internal Revenue
Service form 1001 or 4224, that the Lender Party reasonably considers to be
confidential, the Lender Party shall give notice thereof to the Borrower and
shall not be obligated to include in such form or document such confidential
information.
(f) Failure to Provide Forms. For any period with respect to which
a Lender Party has failed to provide the Borrower with the appropriate form
described in Section 2.10(e) (other than if such failure is due to a change in
law occurring after the date on which a form originally was required to be
provided or if such form otherwise is not required under Section 2.10(e)), such
Lender Party shall not be entitled to indemnification under Section 2.10(a) or
Section 2.10(c) with respect to Taxes imposed by the United States; provided,
however, that should a Lender Party become subject to Taxes because of its
failure to deliver a form required hereunder, the Borrower shall take such steps
as such Lender Party shall reasonably request to assist such Lender Party to
recover such Taxes.
(g) Change of Applicable Lending Office. Any Lender Party claiming
any additional amounts payable pursuant to this Section 2.10 shall use
reasonable efforts (consistent with its internal policy and legal and regulatory
restrictions) to change the jurisdiction of its Eurodollar Lending Office if the
making of such a change would avoid the need for, or reduce the amount of, any
such additional amounts that may thereafter accrue and would not, in the
reasonable judgment of such Lender Party, be otherwise disadvantageous to such
Lender Party.
(h) Survival. Without prejudice to the survival of any other
agreement of the Borrower hereunder, the agreements and obligations of the
Borrower contained in this Section 2.10 shall survive the payment in full of
principal and interest hereunder and under the Notes.
Section 2.11. Sharing of Payments, Etc. If any Lender Party shall
obtain at any time any payment (whether voluntary, involuntary, through the
exercise of any right of set-off, or otherwise) (a) on account of Obligations
due and payable to such Lender Party hereunder and under the Notes at such time
in excess of its ratable share (according to the proportion of (i) the amount of
such Obligations due and payable to such Lender Party at such time to (ii) the
aggregate amount of the Obligations due and payable to all Lender Parties
hereunder and under the Notes at such time) of payments on account of the
38
<PAGE>
Obligations due and payable to all Lender Parties hereunder and under the Notes
at such time obtained by all the Lender Parties at such time or (b) on account
of Obligations owing (but not due and payable) to such Lender Party hereunder
and under the Notes at such time in excess of its ratable share (according to
the proportion of (i) the amount of such Obligations owing to such Lender Party
at such time to (ii) the aggregate amount of the Obligations owing (but not due
and payable) to all Lender Parties hereunder and under the Notes at such time)
of payments on account of the Obligations owing (but not due and payable) to all
Lender Parties hereunder and under the Notes at such time obtained by all the
Lender Parties at such time, such Lender Party shall forthwith purchase from the
other Lender Parties such participations in the Obligations due and payable or
owing to them, as the case may be, as shall be necessary to cause such
purchasing Lender Party to share the excess payment ratably with each of them;
provided, however, that if all or any portion of such excess payment is
thereafter recovered from such purchasing Lender Party, such purchase from each
other Lender Party shall be rescinded and such other Lender Party shall repay to
the purchasing Lender Party the purchase price to the extent of such other
Lender Party's ratable share (according to the proportion of (i) the purchase
price paid to such Lender Party to (ii) the aggregate purchase price paid to all
Lender Parties) of such recovery together with an amount equal to such Lender
Party's ratable share (according to the proportion of (i) the amount of such
other Lender Party's required repayment to (ii) the total amount so recovered
from the purchasing Lender Party) of any interest or other amount paid or
payable by the purchasing Lender Party in respect of the total amount so
recovered. The Borrower agrees that any Lender Party so purchasing a
participation from another Lender Party pursuant to this Section 2.11 may, to
the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off) with respect to such participation as fully as
if such Lender Party were the direct creditor of the Borrower in the amount of
such participation.
Section 2.12. Use of Proceeds. The proceeds of the Advances shall be
available (and the Borrower agrees that it shall use such proceeds) to repay in
full all amounts outstanding under the Existing Credit Agreement, to redeem the
Existing Senior Notes, to provide working capital for, and finance capital
expenditures by, the Borrower and its Subsidiaries and, subject to the
provisions of this Agreement and the other Loan Documents, for other general
corporate purposes of the Borrower and its Subsidiaries.
Section 2.13. Evidence of Debt.
(a) Maintenance of Accounts by Lenders. Each Lender shall maintain
in accordance with its usual practice an account or accounts evidencing the
indebtedness of the Borrower to such Lender resulting from each Advance owing to
such Lender from time to time, including the amounts of principal and interest
payable and paid to such Lender from time to time hereunder.
(b) Maintenance of Accounts by Agent. The Register maintained by the
Agent pursuant to Section 9.07(c) shall include a control account, and a
subsidiary account for each Lender Party, in which accounts (taken together)
shall be recorded (i) the date and amount of each Borrowing made hereunder, the
Interest Type of the Advances comprising such Borrowing and any Interest Period
applicable thereto, (ii) the terms of each Assignment and Acceptance delivered
39
<PAGE>
to and accepted by it, (iii) the amount of any principal or interest due and
payable or to become due and payable from the Borrower to each Lender Party
hereunder, and (iv) the amount of any sum received by the Agent from the
Borrower hereunder and each Lender Party's share thereof. The entries made in
the Register shall be conclusive and binding for all purposes, absent manifest
error.
ARTICLE III.
AMOUNTS AND TERMS OF LETTERS OF CREDIT
Section 3.01. The Letter of Credit Subfacility. The Borrower may
request any Lender, on the terms and conditions hereinafter set forth, to Issue,
and any such Lender may, if in its sole discretion it elects to do so, and the
L/C Bank shall, if no other Lender elects to do so, Issue standby Letters of
Credit for the account of the Borrower from time to time on any Business Day
during the period after the Closing Date until 30 days prior to the Revolving
Commitment Termination Date (a) in an aggregate Available Amount for all Letters
of Credit (including the Existing Letters of Credit) not to exceed at any time
$25,000,000 (the "Letter of Credit Subfacility"), and (b) in an Available Amount
for each such Letter of Credit not to exceed the Unused Revolving Commitments of
the Lenders on such Business Day. No Letter of Credit shall have an expiration
date (including all rights of the Borrower or the beneficiary to require
renewal) later than 30 days before the Termination Date and one year after the
date of issuance thereof (but a Letter of Credit may, by its terms, be renewable
annually with the consent of the Issuing Bank). As of the Closing Date, each
Existing Letter of Credit shall constitute, for all purposes of this Agreement
and the other Loan Documents, a Letter of Credit issued and outstanding
hereunder and shall, for purposes of Section 3.05, be deemed to be Issued
hereunder on the Closing Date. Within the limits of the Letter of Credit
Subfacility, and subject to the limits referred to above, the Borrower may
request the Issuance of one or more Letters of Credit under this Section 3.01,
repay amounts due resulting from L/C Advances thereunder pursuant to Section
3.03, and request the Issuance of one or more additional Letters of Credit under
this Section 3.01.
Section 3.02. Issuance of Letters of Credit.
(a) Notice of Issuance. Each Letter of Credit shall be Issued
pursuant to a Notice of Issuance, which must be received by the Agent and the
Issuing Bank not later than 12:00 noon (Dallas, Texas time) on the third
Business Day prior to the date of the proposed Issuance of such Letter of Credit
(or such shorter period as may be acceptable to the applicable Issuing Bank).
Each such Notice of Issuance shall specify the requested (i) date of such
Issuance (which shall be a Business Day), (ii) Available Amount of such Letter
of Credit, (iii) expiration date of such Letter of Credit, (iv) name and address
of the beneficiary of such Letter of Credit, and (v) form of such Letter of
Credit, and shall be accompanied by such customary application and agreement for
letter of credit of the Issuing Bank (a "Letter of Credit Agreement") as the
Issuing Bank may specify to the Borrower for use in connection with such
requested Letter of Credit.
40
<PAGE>
(b) Conditions to Issuance. If (i) the requested form of such Letter
of Credit is acceptable to the Agent and the Issuing Bank in the reasonable
discretion of each, (ii) in the case of any Issuing Bank other than the L/C
Bank, such Issuing Bank elects in its sole discretion to Issue the requested
Letter of Credit, and (iii) such Issuing Bank has not received notice from the
Agent or the Required Lenders that the Issuance of such Letter of Credit is not
authorized because such Issuance would not comply with the requirements of
clause (a) or (b) of Section 3.01 or one or more of the conditions set forth in
Section 4.02 has not been satisfied, then such Issuing Bank will, upon
fulfillment of the applicable conditions set forth in Section 4.02 (which
fulfillment such Issuing Bank may assume in the absence of actual knowledge, or
notice received from the Borrower, the Agent or the Required Lenders, to the
contrary) and subject to the provisions of this Article III, make such Letter of
Credit available to the Borrower at its office referred to in Section 9.02 or as
otherwise agreed upon with the Borrower in connection with such Issuance. In
the event and to the extent that the provisions of any Letter of Credit
Agreement shall conflict with this Agreement, the provisions of this Agreement
shall govern.
(c) Reports by Issuing Banks. Each Issuing Bank shall furnish to the
Agent (i) on the fifth Business Day of each month a written report summarizing
Issuance and expiration dates of Letters of Credit Issued by such Issuing Bank
during the preceding month and L/C Advances during such month under all Letters
of Credit Issued by such Issuing Bank, and (ii) two Business Days prior to the
last Business Day of each March, June, September and December, a written report
setting forth the average daily aggregate Available Amount during the preceding
calendar quarter of all Letters of Credit Issued by such Issuing Bank.
Section 3.03. Drawing and Reimbursement. The Borrower agrees to
reimburse the Issuing Bank under each Letter of Credit, within one Business Day
after it has notice of any L/C Advance by such Issuing Bank thereunder, for the
principal amount of such L/C Advance, and shall pay to such Issuing Bank, on
demand, interest on the unreimbursed principal of such L/C Advance at a rate per
annum equal to (a) from the date of such L/C Advance to the first Business Day
after notice thereof has been given to the Borrower, the rate applicable to Base
Rate Advances in effect from time to time, and (b) from and after such first
Business Day, the Default Rate. If the Borrower shall fail to so reimburse the
Issuing Bank within one Business Day after the Borrower receives notice that any
such L/C Advance has been made, then upon demand by the Issuing Bank, and
whether or not a Default has occurred and is continuing or any conditions set
forth in Section 4.02 are satisfied, each Revolving Lender shall purchase from
such Issuing Bank, and such Issuing Bank shall sell and assign to each Revolving
Lender, such Lender's Pro Rata Share of such outstanding L/C Advance as of the
date of such purchase, by making available for the account of such Issuing Bank,
by deposit to the Agent's Account, in same day funds, an amount equal to the
portion of the outstanding principal amount of such L/C Advance to be purchased
by such Lender. Each Revolving Lender agrees to purchase its Pro Rata Share of
an outstanding L/C Advance on (A) the Business Day on which demand therefor is
made by the Issuing Bank which made such L/C Advance, provided notice of such
demand is given not later than 12:00 noon (Dallas, Texas time) on such Business
Day, or (B) the first Business Day next succeeding such demand if notice of such
demand is given after such time. Upon any such assignment by an Issuing Bank to
any Lender of a portion of an L/C Advance, such Issuing Bank represents and
41
<PAGE>
warrants to such Lender that such Issuing Bank is the legal and beneficial owner
of such interest being assigned by it, but makes no other representation or
warranty and assumes no responsibility with respect to such L/C Advance, the
Loan Documents or any Loan Party.
Section 3.04. Obligations Absolute. The Obligations of the Borrower
under Article III of this Agreement, any Letter of Credit Agreement and any
other agreement or instrument relating to any Letter of Credit shall be
unconditional and irrevocable, and shall be paid strictly in accordance with the
terms of this Agreement, such Letter of Credit Agreement and such other
agreement or instrument under all circumstances, including, without limitation,
the following circumstances (it being understood that any such payment by the
Borrower is without prejudice to, and does not constitute a waiver of, any
rights the Borrower might have or might acquire as a result of the payment by
the Issuing Bank of any draft or the reimbursement by the Borrower thereof):
(a) any lack of validity or enforceability of this Agreement, any
Letter of Credit Agreement, any Letter of Credit or any other agreement or
instrument relating thereto (this Agreement and all of the other foregoing
being collectively referred to herein as the "L/C Related Documents");
(b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Obligations of the Borrower in respect of any
L/C Related Document or any other amendment or waiver of or any consent to
departure from all or any of the L/C Related Documents;
(c) the existence of any claim, set-off, defense or other right that
the Borrower or any of its Subsidiaries may have at any time against any
beneficiary or any transferee of a Letter of Credit (or any Persons for whom any
such beneficiary or any such transferee may be acting), any Issuing Bank or any
other Person, whether in connection with the transactions contemplated by the
L/C Related Documents or any unrelated transaction;
(d) any statement or any other document presented under a Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any respect
or any statement therein being untrue or inaccurate in any respect;
(e) payment by any Issuing Bank under a Letter of Credit against
presentation of a draft or certificate that does not strictly comply with the
terms of such Letter of Credit;
(f) any exchange, release or non-perfection of any Collateral or
other collateral, or any release or amendment or waiver of or consent to
departure from any guarantee, for all or any of the Obligations of the Borrower
in respect of the L/C Related Documents; or
(g) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing, including, without limitation, any other
circumstance that might otherwise constitute a defense available to, or a
discharge of, the Borrower or a guarantor.
42
<PAGE>
Section 3.05. Letter of Credit Compensation.
(a) The Borrower shall pay to the Agent:
(i) for the account of the Issuing Bank which Issues a Letter of
Credit, an issuance fee in an amount equal to 1/8 of 1% per annum of the
average daily Available Amount of such Letter of Credit outstanding from
time to time: and
(ii) for the account of each Lender, a letter of credit fee with
respect to each Letter of Credit, in each case in an amount equal to a rate
per annum equal to the Applicable Margin for Eurodollar Rate Advances in
effect from time to time on such Lender's Pro Rata Share of the average
daily Available Amount of such Letter of Credit outstanding from time to
time.
The letter of credit and issuance fees payable under this Section 3.05(a) shall
be payable quarterly in arrears on the last Business Day of each March, June,
September and December, commencing June 30, 1998, and on the Revolving
Commitment Termination Date. For purposes of computing any fees under this
Section 3.05(a), the determination of the maximum amount available to be drawn
under a Letter of Credit at any time shall assume strict compliance with all
conditions for drawing. Any fees paid pursuant to this Section 3.05(a) are
nonrefundable.
(b) The Borrower shall pay to each Issuing Bank, for its own account
and on demand, such other commissions, issuance fees, transfer fees and other
fees, charges and expenses in connection with the Issuance, amendment, transfer,
cancellation or administration of each Letter of Credit as the Borrower and such
Issuing Bank shall agree; provided that in no event shall any Issuing Bank
require, after giving effect to the amounts payable to it pursuant to Section
3.05(a) above (in the case of the Issuance of any Letter of Credit), more than
the standard fees, charges and expenses which it normally charges in connection
with such matters.
Section 3.06. Use of Letters of Credit. Any Letters of Credit Issued
hereunder shall be used solely to support Obligations of the Borrower and its
Subsidiaries not prohibited hereunder.
ARTICLE IV.
CONDITIONS OF LENDING
Section 4.01. Conditions Precedent to Initial Borrowing. The
obligation of each Lender Party to make an Advance on the occasion of the
initial Borrowing is subject to the following conditions precedent:
(a) The Lender Parties shall be satisfied with the corporate and
legal structure and capitalization of each Loan Party and each of its
Subsidiaries, including the terms and conditions of the charter, bylaws and each
class of capital stock of each Loan Party and each such Subsidiary and of each
agreement or instrument relating to such structure or capitalization.
43
<PAGE>
(b) The Borrower (or the trustee under the Existing Senior Note
Indenture on behalf of the Borrower) shall have mailed a Redemption Notice in
respect of Existing Senior Notes in an aggregate principal amount of $75,000,000
to the holders of the Existing Senior Notes, and the Agent shall have been
provided with a copy of such Redemption Notice.
(c) The Lender Parties shall (i) be satisfied that all Funded Debt,
other than the Debt identified on Schedule 4.01(c) and the Existing Senior Notes
("Surviving Debt"), has been prepaid, redeemed or defeased in full or otherwise
satisfied and extinguished, and (ii) shall have received satisfactory evidence
(including, without limitation, a duly executed payoff letter, UCC termination
statements and real property reconveyances) that all liens and security
interests granted pursuant to, or in connection with, the Existing Credit
Agreement and the Security Documents (as defined in the Existing Credit
Agreement) shall be terminated or released contemporaneously with the initial
Borrowing.
(d) There shall have occurred no Material Adverse Change since
September 28, 1997.
(e) There shall exist no action, suit, investigation, litigation or
proceeding affecting any Loan Party or any of their Subsidiaries pending or
threatened before any court, governmental agency or arbitrator that (i) could
have a Material Adverse Effect other than the matters disclosed in the Annual
Report of the Borrower (the "Borrower's Form 10-K") for the fiscal year ended
September 28, 1997 filed with the Securities and Exchange Commission and the
matters disclosed in the preliminary offering memorandum dated March 27, 1998
relating to the senior subordinated notes of the Borrower described in clause
(A) of the definition of "Permitted Subordinated Debt" (the "Disclosed
Litigation") or (ii) purports to affect the legality, validity or enforceability
of this Agreement, any Note, any other Loan Document, or the consummation of the
transactions contemplated hereby, and there shall have been no adverse change in
the status, or financial effect on the Borrower and its Subsidiaries, taken as
a whole, of the Disclosed Litigation from that disclosed in the Borrower's Form
10-K.
(f) The Lenders, the Agent and the Arranger shall have completed a
due diligence investigation of the Borrower and its Subsidiaries in scope, and
with results, satisfactory to the Lenders, the Agent and the Arranger, and
nothing shall have come to the attention of the Lenders, the Agent or the
Arranger during the course of such due diligence investigation to lead them to
believe that the Information Memorandum was or has become misleading, incorrect
or incomplete in any material respect, without limiting the generality of the
foregoing, the Lenders, the Agent and the Arranger shall have been given such
access to the management, records, books of account, contracts and properties of
the Borrower and its Subsidiaries as they shall have requested.
(g) The Borrower shall have paid all accrued fees and expenses of the
Agent and the Lender Parties (including, to the extent invoiced, the accrued
fees and expenses of counsel to the Agent).
(h) The Agent shall have received on or before the day of the initial
Borrowing the following, each dated such day (unless otherwise specified), in
44
<PAGE>
form and substance satisfactory to the Agent (unless otherwise specified) and
(except for the Notes) in sufficient copies for each Lender Party:
(i) The Notes to the order of each Lender, as appropriate.
(ii) Certified copies of the resolutions of the Board of
Directors of the Borrower authorizing this Agreement, the Notes, and of
each other Loan Party approving each Loan Document to which it is or is to
be a party, and of all documents evidencing other necessary corporate
action and governmental approvals, if any, with respect to this Agreement,
the Notes, and each other Loan Document.
(iii) A copy of the charter of the Borrower and each other
Loan Party and each amendment thereto, certified (as of a date reasonably
near the date of the initial Borrowing) by the Secretary of the State of
the State in which each such Person is organized as being a true and
correct copy thereof (except in the case of Jack In The Box, Inc., in which
case such certification shall be provided in a certificate of the Secretary
of Jack In The Box, Inc.).
(iv) A copy of a certificate of the Secretary of State of the
State in which each such Person is organized, dated reasonably near the
date of the initial Borrowing, listing the charter of the Borrower and each
other Loan Party and each amendment thereto on file in such office and
certifying that (A) such amendments are the only amendments to the
Borrower's, or such other Loan Party's charter on file in such office, (B)
the Borrower and each other Loan Party have paid all franchise taxes to the
date of such certificate and (C) the Borrower and each other Loan Party are
duly incorporated and in good standing under the laws of such State.
(v) A certificate of the Borrower and each other Loan Party
signed on behalf of the Borrower and such other Loan Party by its
President, any Vice President, Chief Financial Officer or Treasurer and its
Secretary or any Assistant Secretary, dated the date of the initial
Borrowing (the statements made in which certificate shall be true on and as
of the date of the initial Borrowing), certifying as to (A) the absence of
any amendments to the charter of the Borrower or such other Loan Party
since the date of the Secretary of State's certificate (or the Secretary's
certificate in the case of Jack In The Box, Inc.) referred to in Section
4.01(i)(iv), (B) a true and correct copy of the bylaws of the Borrower and
such other Loan Party as in effect on the date of the initial Borrowing,
(C) the due incorporation and good standing of the Borrower and such other
Loan Party as a corporation organized under the laws of the State of its
jurisdiction of incorporation, and the absence of any proceeding for the
dissolution or liquidation of the Borrower or such other Loan Party, (D)
the truth of the representations and warranties contained in the Loan
Documents as though made on and as of the date of the initial Borrowing and
(E) the absence of any event occurring and continuing, or resulting from
the initial Borrowing, that constitutes a Default.
(vi) A certificate of the Secretary or an Assistant Secretary of
the Borrower and each other Loan Party certifying the names and true
45
<PAGE>
signatures of the officers of the Borrower and such other Loan Party
authorized to sign this Agreement, the Notes, and each other Loan Document
to which they are or are to be parties and the other documents to be
delivered hereunder and thereunder.
(vii) A security agreement in substantially the form of
Exhibit E (as amended from time to time in accordance with its terms, the
"Security Agreement"), duly executed by the Borrower and the Inactive
Subsidiaries (other than the Inactive Foreign Subsidiaries), together with:
(A) certificates representing the Pledged Shares referred
to therein accompanied by undated stock powers executed in blank and
instruments evidencing the Pledged Debt referred to therein indorsed
in blank,
(B) duly executed financing statements in appropriate form
for filing under the Uniform Commercial Code in all jurisdictions that
the Agent may deem necessary or desirable in order to perfect the
Liens created by the Security Agreement, covering the Collateral
described in the Security Agreement,
(C) evidence of the insurance required by the terms of the
Security Agreement, and
(D) evidence that all other action that the Agent may deem
necessary or desirable in order to perfect and protect the Liens
created by the Security Agreement has been taken.
(viii) Deeds of trust, trust deeds and mortgages in
substantially the form of Exhibit I-1 and I-2 and covering the properties
(other than the Headquarters Property) listed on Part I of Schedule 4.01(j)
(as amended from time to time in accordance with their terms, the
"Mortgages"), duly executed by the Borrower in appropriate form for filing
in all filing or recording offices that the Agent may deem necessary or
desirable in order to create a valid and subsisting Lien subject only to
Permitted Liens on the property described therein in favor of the Agent for
the benefit of the Lender Parties, together with:
(A) with respect to the six properties identified on Part
II of Schedule 4.01(j) (other than the Headquarters Property), a
commitment from First American Title Insurance Company to issue
American Land Title Association Lender's Extended Coverage title
insurance policies (the "Mortgage Policies") in form and substance,
with endorsements and in amount acceptable to the Agent, issued,
coinsured and reinsured by title insurers acceptable to the Agent,
insuring the Mortgages covering the six properties listed on Part II
of Schedule 4.01(j) (other than the Headquarters Property) to be valid
and subsisting Liens with the priority set forth in the applicable
Mortgage Policy on the property described therein, free and clear of
all defects (including, but not limited to, mechanics' and
materialmen's Liens) and encumbrances, excepting only Permitted Liens,
and providing for such other affirmative insurance (including
46
<PAGE>
endorsements for future advances under the Loan Documents and for
mechanics' and materialmen's Liens) and such coinsurance and direct
access reinsurance as the Agent may deem necessary or desirable,
(B) such consents and agreements of third parties under
existing deeds of trust (other than the existing deed of trust with
respect to the Headquarters Property), as the Agent may deem necessary
or desirable, and
(C) evidence that all other action that the Agent may deem
necessary or desirable in order to create valid first and subsisting
Liens on the property described in the Mortgages has been taken.
(ix) A guaranty in substantially the form of Exhibit F (as
amended from time to time in accordance with its terms, the "Guaranty"),
duly executed by the Guarantors.
(x) Such financial, business and other information regarding
each Loan Party and their Subsidiaries as the Lender Parties shall have
requested, including, without limitation, information as to possible
contingent liabilities, tax matters, environmental matters, obligations
under ERISA and Welfare Plans, collective bargaining agreements and other
arrangements with employees, annual financial statements dated September
26, 1996 and September 28, 1997 respectively, interim financial statements
dated the end of the most recent fiscal quarter for which financial
statements are available (or, in the event the Lender Parties' due
diligence review reveals material changes since such financial statements,
as of a later date within 45 days of the day of the initial Borrowing), and
the Projections.
(xi) Evidence of insurance naming the Agent as insured and loss
payee with such responsible and reputable insurance companies or
associations, and in such amounts and covering such risks, as is
satisfactory to the Lender Parties.
(xii) A favorable opinion of Gibson, Dunn & Crutcher, LLP,
counsel for the Borrower and the other Loan Parties, in substantially the
form of Exhibit G hereto and as to such other matters as any Lender Party
through the Agent may reasonably request.
(xiii) A favorable opinion of Latham & Watkins, counsel for
the Agent, in form and substance satisfactory to the Agent.
Section 4.02. Conditions Precedent to Each Borrowing and Issuance.
The obligation of each Lender to make an Advance (other than an L/C
Advance and other than a Revolving Advance made by a Revolving Lender pursuant
to Section 2.02(f)) on the occasion of each Borrowing (including the initial
Borrowing), and the right of the Borrower to request a Swing Line Borrowing or
the issuance of Letters of Credit, shall be subject to the further conditions
precedent that on the date of such Borrowing or issuance the following
statements shall be true (and each of the giving of the applicable Notice of
Borrowing, Notice of Swing Line Borrowing or Notice of Issuance and the
47
<PAGE>
acceptance by the Borrower of the proceeds of such Borrowing or of such Letter
of Credit shall constitute a representation and warranty by the Borrower that on
the date of such Borrowing or issuance such statements are true):
(i) the representations and warranties contained in each Loan
Document are correct on and as of the date of such Borrowing or issuance,
before and after giving effect to such Borrowing or issuance and to the
application of the proceeds therefrom, as though made on and as of such
date other than any such representations or warranties that, by their
terms, are specifically made as of a date other than the date of such
Borrowing or issuance; and
(ii) no event has occurred and is continuing, or would result
from such Borrowing or issuance or from the application of the proceeds
therefrom, that constitutes a Default.
Section 4.03. Determinations Under Section 4.01. For purposes of
determining compliance with the conditions specified in Section 4.01, each
Lender Party shall be deemed to have consented to, approved or accepted or to
be satisfied with each document or other matter required thereunder to be
consented to or approved by or acceptable or satisfactory to the Lender Parties
unless an officer of the Agent responsible for the transactions contemplated by
the Loan Documents shall have received notice from such Lender Party prior to
the initial Borrowing specifying its objection thereto and such Lender Party
shall not have made available to the Agent such Lender Party's ratable portion
of such Borrowing.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES
Section 5.01. Representations and Warranties of the Borrower. The
Borrower represents and warrants as follows:
(a) Incorporation, Qualification, Corporate Power and Authority.
Each Loan Party (i) is a corporation duly organized, validly existing and good
standing under the laws of the jurisdiction of its incorporation, (ii) is duly
qualified and in good standing as a foreign corporation in each other
jurisdiction in which it owns or leases property or in which the conduct of its
business requires it to so qualify or be licensed except where the failure to
so qualify or be licensed would not reasonably be expected to have a Material
Adverse Effect and (iii) has all requisite corporate power and authority to own
or lease and operate its properties and to carry on its business as now
conducted and as proposed to be conducted.
(b) Capital Stock. Set forth on Schedule 5.01(b) hereto is a
complete and accurate list, as of the date hereof, of all Subsidiaries of each
Loan Party, showing as of the date hereof (as to each such Subsidiary), the
jurisdiction of its incorporation, the number of shares of each class of capital
stock authorized and outstanding, the percentage of the outstanding shares of
each such class owned (directly or indirectly) by such Loan Party and the number
of shares covered by all outstanding options, warrants, rights of conversion or
purchase and similar rights. All of the outstanding capital stock of all of
such Subsidiaries has been validly issued, is fully paid and non-assessable
(except to the extent such concepts are not applicable to a Foreign Subsidiary)
48
<PAGE>
and is owned by such Loan Party or one or more of its Subsidiaries free and
clear of all Liens, except those created by the Collateral Documents. Each such
Subsidiary (except to the extent such concepts are not applicable to a Foreign
Subsidiary) (i) is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation, (ii) is duly
qualified and in good standing as a foreign corporation in each other
jurisdiction in which it owns or leases property or in which the conduct of its
business requires it to so qualify or be licensed except where the failure to so
qualify or be licensed would not reasonably be expected to have a Material
Adverse Effect and (iii) has all requisite corporate power and authority to own
or lease and operate its properties and to carry on its business as now
conducted and as proposed to be conducted.
(c) Authorization; No Conflict or Violation; Compliance with Laws.
The execution, delivery and performance by each Loan Party of this Agreement,
the Notes, and each other Loan Document to which it is or is to be a party, and
the consummation of the transactions contemplated hereby and thereby (including
the redemption of the Existing Senior Notes as contemplated hereby), are within
such Loan Party's corporate powers, have been duly authorized by all necessary
corporate action, and do not (i) contravene such Loan Party's charter or
by-laws, (ii) violate any law (including, without limitation, the Securities
Exchange Act of 1934 and the Racketeer Influenced and Corrupt Organizations
Chapter of the Organized Crime Control Act of 1970), rule, regulation
(including, without limitation, Regulation X of the Board of Governors of the
Federal Reserve System), order, writ, judgment, injunction, decree,
determination or award, (iii) conflict with or result in the breach of, or
constitute a default under, any contract, loan agreement, indenture, mortgage,
deed of trust, lease or other instrument binding on or affecting any Loan Party,
any of its Subsidiaries or any of their properties or (iv) except for the Liens
created by the Collateral Documents, result in or require the creation or
imposition of any Lien upon or with respect to any of the properties of any Loan
Party or any of its Subsidiaries. Neither any Loan Party nor any of its
Subsidiaries is in violation of any such law, rule, regulation, order, writ,
judgment, injunction, decree, determination or award or in breach of any such
contract, loan agreement, indenture, mortgage, deed of trust, lease or other
instrument, the violation or breach of which is reasonably likely to have a
Material Adverse Effect.
(d) Approvals and Consents. All authorizations, consents, approvals,
registrations, filings, notices, exemptions and licenses with or from, or other
actions, by any governmental authority or regulatory body or any third party
which are necessary for the borrowing hereunder, the grant of security interests
in and liens on the Collateral, the execution and delivery of the Loan
Documents, the redemption of the Existing Senior Notes as contemplated hereby,
the performance by the Loan Parties of their respective obligations hereunder
and thereunder and the exercise by the Agent or the Lender Parties of their
remedies hereunder and thereunder have been effected, obtained or taken and are
in full force and effect, except for those that may be necessary in connection
with the perfection or protection of liens granted pursuant to the Collateral
Documents.
(e) Enforceability. This Agreement has been, and each of the Notes,
and each other Loan Document when delivered hereunder will have been, duly
executed and delivered by each Loan Party party thereto. This Agreement is, and
49
<PAGE>
each of the Notes and each other Loan Document when delivered hereunder will be,
the legal, valid and binding obligation of each Loan Party party thereto,
enforceable against such Loan Party in accordance with its terms, subject to the
effect of bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect relating to or affecting the rights or remedies
of creditors generally and the effect of general principles of equity, whether
enforcement is considered in a proceeding in equity or at law.
(f) Financial Statements. (i) The Consolidated balance sheet of the
Borrower and its Subsidiaries as at September 28, 1997, and the related
Consolidated statement of income and cash flows of the Borrower and its
Subsidiaries for the fiscal year then ended, accompanied by an opinion of
KPMG Peat Marwick, independent public accountants, and the Consolidated
balance sheet of the Borrower and its Subsidiaries as at January 18, 1998,
and the related Consolidated statement of income and cash flows of the
Borrower and its Subsidiaries for the 16 weeks then ended, duly certified
by the chief financial officer or chief accounting officer of the Company,
copies of which have been furnished to the Agent, fairly present, subject,
in the case of said balance sheet as at January 18, 1998, and said
statement of income and cash flows for the 16 weeks then ended, to year-end
audit adjustments, the Consolidated financial condition of the Borrower
and its Subsidiaries as at such dates and the Consolidated results of the
operations of the Borrower and its Subsidiaries for the period ended on
such dates, all in accordance with GAAP applied on a consistent basis, and
since September 28, 1997, there has been no Material Adverse Change.
(ii) The Projections delivered to the Lenders pursuant to
Section 4.01(h)(x) were prepared in good faith on the basis of the
assumptions stated therein, which assumptions were fair in the light of
conditions existing at the time of delivery of such forecasts, and
represented, at the time of delivery, the Borrower's best estimate of its
future financial performance.
(g) Disclosure. Neither the Information Memorandum nor any other
information, exhibit or report furnished by any Loan Party to the Agent or any
Lender Party in connection with the negotiation of the Loan Documents or
pursuant to the terms of the Loan Documents contained any untrue statement of a
material fact or omitted to state a material fact necessary to make the
statements made therein taken as a whole not misleading.
(h) Litigation. There is no action, suit, investigation, litigation
or proceeding affecting any Loan Party or any of their Subsidiaries, including
any Environmental Action, pending or threatened before any court, governmental
agency or arbitrator that (i) would be reasonably likely to have a Material
Adverse Effect other than the Disclosed Litigation or (ii) purports to affect
the legality, validity or enforceability of this Agreement, any Note, or any
other Loan Document or the consummation of the transactions contemplated hereby
or thereby and there has been no adverse change in the status, or financial
effect on any Loan Party or any of their Subsidiaries, of the Disclosed
Litigation from that disclosed in the Borrower's Form 10-K.
(i) Use of Proceeds.
50
<PAGE>
(i) The Borrower is not engaged in the business of extending
credit for the purpose of purchasing or carrying Margin Stock, and no
proceeds of any Advance will be used to purchase or carry any Margin Stock
or to extend credit to others for the purpose of purchasing or carrying any
Margin Stock.
(ii) Following application of the proceeds of each Advance, not
more than 25 percent of the value of the assets (either of the Borrower
only or of the Borrower and its Subsidiaries on a Consolidated basis)
subject to the provisions of Section 5.02(a) or 5.02(e) or subject to any
restriction contained in any agreement or instrument between the Borrower
and any Lender Party or any Affiliate of any Lender Party relating to Debt
and within the scope of Section 6.01(e) will be Margin Stock.
(j) Pension Plans.
(i) Each Loan Party and its ERISA Affiliates has fulfilled the
obligations under the minimum funding standards of ERISA and the Internal
Revenue Code with respect to each Plan and is in substantial compliance in
all material respects with the presently applicable provisions of ERISA and
the Internal Revenue Code with respect to each Plan. Neither any Loan
Party nor any of its ERISA Affiliates has incurred any material liability
under Title IV of ERISA other than a liability to the PBGC for premiums
under Section 4007 of ERISA.
(ii) No ERISA Event has occurred or is reasonably expected to
occur with respect to any Plan of any Loan Party or any of its ERISA
Affiliates that has resulted in or is reasonably likely to result in a
material liability of any Loan Party or any of its ERISA Affiliates.
(iii) Schedule B (Actuarial Information) to the 1996 annual
report (Form 5500 Series) for each Plan of any Loan Party or any of its
ERISA Affiliates, copies of which have been filed with the Internal Revenue
Service and furnished to the Lender Parties, and each subsequent Schedule B
(Actuarial Information) provided to the Lender Parties pursuant to Section
6.03(g), is complete and accurate and fairly presents the funding status of
such Plan, as of the time it was given, and no Loan Party is aware of any
events or conditions since the date of such report that would create a
material adverse change in the funding status of such Plan.
(iv) Neither any Loan Party nor any of its ERISA Affiliates
contributes to, is obligated to contribute to, has contributed to or has
been obligated to contribute to any Multiemployer Plan.
(v) The aggregate Insufficiency of all Plans of the Loan Parties
and their ERISA Affiliates (excluding any Plans which do not have any
Insufficiency) does not exceed $18,254,000 (the amount of the Insufficiency
on the Closing Date) plus $4,000,000.
51
<PAGE>
(vi) The aggregate annualized cost (including, without
limitation, the cost of insurance premiums) with respect to post-retirement
benefits under Welfare Plans for which the Loan Parties and their
Subsidiaries are liable does not exceed $750,000.
(k) No Adverse Conditions. Neither the business nor the properties
of any Loan Party or any of its Subsidiaries are affected by any fire,
explosion, accident, strike, lockout or other labor dispute, drought, storm,
hail, earthquake, embargo, act of God or of the public enemy or other casualty
(whether or not covered by insurance) that would be reasonably likely to have a
Material Adverse Effect.
(l) Compliance with Environmental Laws.
(i) The operations and properties of each Loan Party and each of
its Subsidiaries comply in all material respects with all Environmental
Laws, all necessary Environmental Permits have been obtained and are in
effect for the operations and properties of each Loan Party and its
Subsidiaries, each Loan Party and its Subsidiaries are in compliance in all
material respects with all such Environmental Permits, and no circumstances
exist that would be reasonably likely to (i) form the basis of an
Environmental Action against any Loan Party or any of its Subsidiaries or
any of their properties that could have a Material Adverse Effect or (ii)
cause any such property to be subject to any restrictions on ownership,
occupancy, use or transferability under any Environmental Law.
(ii) None of the properties of any Loan Party or any of its
Subsidiaries is listed or proposed for listing on the National Priorities
List under CERCLA or on the Comprehensive Environmental Response,
Compensation and Liability Information System maintained by the
Environmental Protection Agency or any analogous state list of sites
requiring investigation or cleanup or is adjacent to any such property, and
no underground storage tanks, as such term is defined in 42 U.S.C. 6991,
are located on any property of any Loan Party or any of its Subsidiaries.
(iii) Neither any Loan Party nor any of its Subsidiaries has
transported or arranged for the transportation of any Hazardous Materials
to any location that is listed or proposed for listing on the National
Priorities List under CERCLA or on the Comprehensive Environmental
Response, Compensation and Liability Information System maintained by the
Environmental Protection Agency or any analogous state list, Hazardous
Materials have not been generated, used, treated, handled, stored or
disposed of on, or released or transported to or from, any property of any
Loan Party or any of its Subsidiaries, except for limited quantities
required in connection with the normal operation and maintenance of such
properties and used or stored at such properties in compliance with all
Environmental Laws and Environmental Permits, and all other wastes
generated at any such properties have been disposed of in compliance with
all Environmental Laws and Environmental Permits.
(m) No Burdensome Agreements. Neither any Loan Party nor any of its
Subsidiaries is a party to any indenture, loan or credit agreement or any lease
52
<PAGE>
or other agreement or instrument or subject to any charter or corporate
restriction that would be reasonably likely to have a Material Adverse Effect.
(n) Tax Information.
(i) Each Loan Party and each of its Subsidiaries has filed, has
caused to be filed or has been included in all tax returns (Federal, state,
local and foreign) required to be filed and has paid all taxes shown
thereon to be due, together with applicable interest and penalties.
(ii) As of the date hereof, there are no adjustments to the
state, local and foreign tax liability of the Borrower and its Subsidiaries
proposed by any state, local or foreign taxing authorities (other than
amounts arising from adjustments to Federal income tax returns). No issues
have been raised by such taxing authorities that, in the aggregate, would
be reasonably likely to have a Material Adverse Effect.
(o) No Investment Company. Neither any Loan Party nor any of its
Subsidiaries is an "investment company," or an "affiliated person" of, or
"promoter" or "principal underwriter" for, an "investment company," as such
terms are defined in the Investment Company Act of 1940, as amended. Neither
the making of any Advances, nor the issuance of any Letters of Credit, nor the
application of the proceeds or repayment thereof by the Borrower, nor the
consummation of the other transactions contemplated hereby, will violate any
provision of such Act or any rule, regulation or order of the Securities and
Exchange Commission thereunder.
(p) Solvency. Each Loan Party is, individually and together with its
Subsidiaries, Solvent.
(q) Debt of the Borrower and its Subsidiaries.
(i) Set forth on Schedule 5.01(q)(i) hereto is a complete and
accurate list, as of the date hereof, of all existing Funded Debt (other
than Surviving Debt), showing as of the date hereof the principal amount
outstanding thereunder; the aggregate principal amount of all other Debt
(other than Surviving Debt) as of the date hereof does not exceed $50,000;
(ii) Set forth on Schedule 4.01(c) hereto is a complete and
accurate list of all Surviving Debt, showing as of the date hereof the
principal amount outstanding thereunder.
(r) Owned Real Property.
(i) Set forth on Schedule 5.01(r) hereto is a complete and
accurate list of all real property owned in fee as of the date hereof by
any Loan Party or any of their Subsidiaries, showing as of the date hereof
the street address, county or other relevant jurisdiction, book value
thereof, and state thereof. Borrower has good, record, marketable and
53
<PAGE>
insurable fee simple title to such real property, free and clear of all
Liens, other than Liens of the types described in clauses (a), (b) and (e)
inclusive, of the definition of Permitted Liens.
(ii) Set forth on Schedule 5.01(r) hereto is a complete and
accurate list of all leases of real property under which any Loan Party or
any of their Subsidiaries is the lessee, showing as of the date hereof the
street address and state thereof. Each Loan Party or such Subsidiary has a
valid leasehold interest in such leases of real property, free and clean of
all Liens, other than Liens of the types described in clauses (a) and (b),
inclusive, of the definition of Permitted Liens. To the best knowledge of
the Loan Parties and their Subsidiaries, each such lease is the legal,
valid and binding obligation of the lessor thereof, enforceable in
accordance with its terms.
(s) Investments. Set forth on Schedule 5.01(s) hereto is a complete
and accurate list of all Investments held by any Loan Party or any of their
Subsidiaries, showing as of the date hereof the amount, obligor or issuer and
maturity, if any, thereof.
(t) Intellectual Property. Set forth on Schedule 5.01(t) hereto is
a complete and accurate list of all patents, trademarks, trade names, service
marks and copyrights, and all applications therefor and licenses thereof, of
each Loan Party or any of their Subsidiaries, showing as of the date hereof the
jurisdiction in which registered, the registration number, the date of
registration and the expiration date.
(u) Other Agreements. Schedule 5.01(u) sets forth a complete and
accurate list as of the date hereof of (i) all joint venture and partnership
agreements to which the Borrower or any of its Subsidiaries is a party, and (ii)
all covenants not to compete restricting the Borrower or any of its Subsidiaries
to which the Borrower or any of its Subsidiaries is a part or by which the
Borrower or any of its Subsidiaries is bound.
(v) Inactive Subsidiaries. The book value of all property and other
assets of the Inactive Subsidiaries (other than the Inactive Foreign
Subsidiaries), as of the date hereof, does not exceed $100,000 in the aggregate.
The fair market value of all property and other assets of the Inactive Foreign
Subsidiaries, as of the date hereof, does not exceed $100,000 in the aggregate.
ARTICLE VI.
COVENANTS OF THE BORROWER
Section 6.01. Affirmative Covenants. So long as any Advance shall
remain unpaid, any Letter of Credit shall be outstanding or any Lender shall
have any Commitment hereunder, the Borrower will, unless the Required Lenders
shall otherwise consent in writing:
(a) Compliance with Laws, Etc. Comply, and cause each of its
Subsidiaries to comply, in all material respects, with all applicable laws,
rules, regulations and orders, such compliance to include, without limitation,
compliance with ERISA and the Racketeer Influenced and Corrupt Organizations
Chapter of the Organized Crime Control Act of 1970.
54
<PAGE>
(b) Payment of Taxes, Etc. Pay and discharge, and cause each of its
Subsidiaries to pay and discharge, before the same shall become delinquent, all
taxes, assessments and governmental charges or levies imposed upon it or upon
its property; provided, however, that neither the Borrower nor any of its
Subsidiaries shall be required to pay or discharge any such tax, assessment,
charge or claim that is being contested in good faith and by proper proceedings
and as to which appropriate reserves are being maintained, unless and until any
Lien resulting therefrom in respect of which the amount of the underlying tax,
assessment, charge or claim is more than $1,000,000 attaches to its property and
becomes enforceable against its other creditors.
(c) Compliance with Environmental Laws. Comply, and cause each of
its Subsidiaries and use its best efforts to cause all lessees and other Persons
occupying its properties to comply, in all material respects, with all
Environmental Laws and Environmental Permits applicable to its operations and
properties; obtain and renew all Environmental Permits necessary for its
operations and properties; and conduct, and cause each of its Subsidiaries to
conduct, any investigation, study, sampling and testing, and undertake any
cleanup, removal, remedial or other action necessary to remove and clean up all
Hazardous Materials from any of its properties, in accordance with the
requirements of all Environmental Laws; provided, however, that neither the
Borrower nor any of its Subsidiaries shall be required to undertake any such
cleanup, removal, remedial or other action to the extent that its obligation to
do so is being contested in good faith and by proper proceedings and appropriate
reserves are being maintained with respect to such circumstances.
(d) Maintenance of Insurance. Maintain, and cause each of its
Subsidiaries to maintain, insurance with responsible and reputable insurance
companies or associations in such amounts and covering such risks as is usually
carried by companies engaged in similar businesses and owning similar properties
in the same general areas in which the Borrower or such Subsidiary operates.
(e) Preservation of Corporate Existence, Etc. Preserve and maintain,
and cause each of its Subsidiaries (except for the Inactive Subsidiaries) to
preserve and maintain, its corporate existence, rights (charter and statutory)
and franchises; provided, however, that the Borrower and its Subsidiaries may
consummate any merger or consolidation permitted under Section 6.02(d) and
provided further, neither the Borrower nor any of its Subsidiaries shall be
required to preserve any right or franchise if the Board of Directors of the
Borrower or such Subsidiary shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Borrower or such
Subsidiary, as the case may be, and that the loss thereof is not disadvantageous
in any material respect to the Borrower, such Subsidiary or the Lender Parties.
(f) Visitation Rights. At any reasonable time and from time to time
and with reasonable prior notice, permit the Agent or any of the Lender Parties
or any agents or representatives thereof, to examine and make copies of and
abstracts from the records and books of account of, and visit the properties of,
the Borrower and any of its Subsidiaries, and to discuss the affairs, finances
55
<PAGE>
and accounts of the Borrower and any of its Subsidiaries with any of their
officers or directors and with their independent certified public accountants.
(g) Keeping of Books. Keep, and cause each of its Subsidiaries to
keep, proper books of record and account, in which full and correct entries
shall be made of all financial transactions and the assets and business of the
Borrower and each such Subsidiary in accordance with generally accepted
accounting principles in effect from time to time.
(h) Maintenance of Properties, Etc. Maintain and preserve, and cause
each of its Subsidiaries to maintain and preserve, all of its properties that
are used or useful in the conduct of its business in good working order and
condition, ordinary wear and tear excepted.
(i) Compliance with Terms of Leaseholds. Make all payments and
otherwise perform all obligations in respect of all leases of real property,
keep such leases in full force and effect and not allow such leases to lapse or
be terminated or any rights to renew such leases to be forfeited or canceled,
except in each case, where the failure to do so could not reasonably be expected
to have a Material Adverse Effect.
(j) Transactions with Affiliates. Conduct, and cause each of its
Subsidiaries to conduct, all transactions otherwise permitted under the Loan
Documents with any of their Affiliates on terms that are fair and reasonable and
no less favorable to the Borrower or such Subsidiary than it would obtain in a
comparable arm's-length transaction with a Person not an Affiliate, other than
(i) payments for management advisory services not to exceed $375,000 in the
aggregate, (ii) transactions permitted under Section 6.02(g), (iii) the CRC
Leases and (iv) any Permitted CRC Transaction.
(k) Additional Loan Parties; Additional Collateral. At all times
prior to the Collateral Release Date, substantially concurrently with the
formation or acquisition of any Subsidiary (other than an Excluded Subsidiary or
a Foreign Subsidiary) of the Borrower, the Borrower shall (i) cause such
Subsidiary to guarantee all Obligations of the Borrower hereunder and under the
Notes by executing and delivering to the Agent an amendment to Guaranty in
substantially the form of Exhibit H, (ii) cause such Subsidiary to execute and
deliver to the Agent, an amendment to the Security Agreement, in substantially
the form of Exhibit J (whereby such Subsidiary shall grant a Lien on those of
its assets described in the Security Agreement), (iii) promptly pledge to the
Agent or cause to be pledged to the Agent all of the outstanding capital stock
of such Subsidiary owned by any Loan Party to secure such Loan Party's
Obligations under the Loan Documents, (iv) with respect to any real property in
which such Subsidiary has a fee simple ownership interest, cause such Subsidiary
to execute and deliver such deeds of trust, trust deeds and mortgages
("Additional Mortgages") in appropriate form for filing in all filing or
recording offices that the Agent may deem necessary or desirable to create a
valid first and subsisting Lien on the property described therein in favor of
the Agent for the benefit of the Lender Parties, (v) promptly take, and cause
such Subsidiary and each other Loan Party to take all action necessary or (in
the reasonable opinion of the Agent or the Required Lenders) desirable to
perfect and protect the Liens intended to be created by the Collateral
Documents, as amended pursuant to this Section 6.01(k), and (vi) promptly
56
<PAGE>
deliver to the Agent such opinions of counsel, if any, as the Agent or the
Required Lenders may reasonably require with respect to the foregoing (including
opinions as to enforceability and perfection of security interests). At all
times prior to the Collateral Release Date, substantially concurrently with the
formation or acquisition of any Excluded Subsidiary or Foreign Subsidiary of any
Loan Party, such Loan Party shall promptly pledge to the Agent or cause to be
pledged to the Agent all of the outstanding capital stock of such Subsidiary
(or, if such Subsidiary is a Foreign Subsidiary, 65% of such capital stock)
owned by such Loan Party to secure such Loan Party's obligations under the Loan
Documents. In addition to the foregoing, upon the acquisition by the Borrower
or any other Loan Party (other than an Excluded Subsidiary) on or after the date
hereof and prior to the Collateral Release Date of any fee simple ownership
interest in any real property and, with respect to any real property subject to
any CRC Lease, if the granting of such a Lien shall be permitted under, and
shall not cause a default or event of default under, the transaction documents
relating to the CRC Notes and the CRC Excluded Debt (including without
limitation the CRC Leases, the mortgages on the properties subject to the CRC
Leases executed by the Borrower, and the indenture relating to the CRC Notes),
(i) the applicable Loan Party shall promptly execute and deliver such Additional
Mortgages in appropriate form for filing in all filing or recording offices that
the Agent may deem necessary or desirable to create a valid first and subsisting
Lien on such real property in favor of the Agent for the benefit of the Lender
Parties, (ii) the Borrower shall promptly take, and cause each Loan Party to
take all action necessary or (in the reasonable opinion of the Agent or the
Required Lenders) desirable to perfect and protect the Liens intended to be
created by the Additional Mortgages, and (iii) promptly deliver to the Agent
such opinions of counsel, if any, as the Agent or the Required Lenders may
reasonably require with respect to the foregoing (including opinions as to
enforceability and perfection of security interests); provided, however, that
the obligations of the Borrower and the other Loan Parties as set forth in this
sentence shall not apply to (X) real properties owned by the Borrower on the
Closing Date (other than the CRC Properties) and (Y) real properties acquired by
the Borrower pursuant any Permitted Sale-Leaseback Repurchase (for as long as it
constitutes a Permitted Sale-Leaseback Repurchase) or Permitted Sale-Leaseback
Transactions.
In addition to the foregoing and notwithstanding any contrary
provision hereof or of any other Loan Document, the Borrower shall execute and
deliver to the Agent an Additional Mortgage of not less than second priority
with respect to the Headquarters Property (subject only to the deed of trust
encumbering such property on the date hereof and with no increase in the
principal amount of Debt secured thereby) and shall cause to be delivered to the
Agent a policy of title insurance with respect thereto, in form and substance,
with endorsements and in amount acceptable to the Agent, in each case at the
Borrower's sole cost and expense and not later than 60 days after the date
hereof.
(l) Redemption of Existing Senior Notes. The Borrower shall (i) on
or before April 15, 1998, redeem $75,000,000 in aggregate principal amount of
the Existing Senior Notes, (ii) on or before June 1, 1998, redeem all
outstanding Existing Senior Notes, (iii) on or before October 1, 1998, redeem
all outstanding Existing Senior Subordinated Notes, and (iv) in each case,
provide the Agent with evidence satisfactory to the Agent of such redemption.
57
<PAGE>
(m) Excluded Subsidiaries. Within 60 days of payment in full of the
CRC Notes, the Borrower shall, with respect to each Excluded Subsidiary, (i)
file, or shall cause to be filed, with the appropriate governmental authority a
petition for the dissolution of such Excluded Subsidiary, or (ii) cause such
Excluded Subsidiary to be merged with and into the Borrower; provided, in the
case of clause (ii), such Excluded Subsidiary is Solvent and has no material
liabilities as of the date of such merger.
(n) Organizational Documents. The Borrower shall ensure that the
organizational documents of each Excluded Subsidiary formed or organized on or
after the Closing Date are substantially in the form of the organizational
documents attached hereto as (i) Exhibit K-1, with respect to any such Excluded
Subsidiary that is a corporation, and (ii) Exhibit K-2, with respect to any such
Excluded Subsidiary that is a limited partnership; provided that with respect to
any such Excluded Subsidiary that is neither a corporation nor a limited
partnership, the Borrower shall ensure that the organizational documents of such
Excluded Subsidiary contain substantially the terms and conditions set forth in
Exhibits K-1 and K-2 with only such conforming changes as are necessary to
reflect that such Excluded Subsidiary is a general partnership, limited
liability company, joint venture or trust, as applicable.
Section 6.02. Negative Covenants. So long as any Advance shall
remain unpaid, any Letter of Credit shall be outstanding or any Lender shall
have any Commitment hereunder, the Borrower will not, at any time, without the
written consent of the Required Lenders or, if required under Section 9.01, of
all of the Lenders.
(a) Liens, Etc. Create, incur, assume or suffer to exist, or permit
any of its Subsidiaries to create, incur, assume or suffer to exist, any Lien on
or with respect to any of its assets or properties of any character (including,
without limitation, accounts and the capital stock of the Borrower and any of
its Subsidiaries) whether now owned or hereafter acquired, excluding, however,
from the operation of the foregoing restrictions the following:
(i) Liens created by the Loan Documents;
(ii) Permitted Liens;
(iii) Liens granted by any Excluded Subsidiary permitted by
the organizational documents of such Excluded Subsidiary;
(iv) Liens granted by the Borrower or any of its Subsidiaries
with respect to any Permitted Sale-Leaseback Repurchase, so long as each
such Lien shall attach only to the property acquired with respect to such
Permitted Sale-Leaseback Repurchase;
(v) Liens arising in connection with Permitted Sale-Leaseback
Transactions provided that, with respect to each Permitted Sale-Leaseback
Transaction, such Liens extend only to the property subject to such
Permitted Sale-Leaseback Transaction; and
58
<PAGE>
(vi) the replacement, extension or renewal of any Permitted
Encumbrance, Permitted Lien or any Lien permitted by clauses (i), (ii),
(iii), (iv) or (v) above upon or in the same property theretofore subject
thereto; or the replacement, extension or renewal (without increase in the
amount, or change in any direct or contingent obligor) of the Debt secured
by any Permitted Encumbrance, Permitted Lien or any Lien permitted by
clauses (i), (ii), (iii), (iv) or (v) above.
(b) Debt. Create, incur, assume or suffer to exist, or permit any of
its Subsidiaries to create, incur, assume or suffer to exist, any Debt other
than:
(i) in the case of the Borrower,
(A) Debt under the Loan Documents;
(B) Permitted Subordinated Debt;
(C) Debt in respect of Hedge Agreements entered into in
order to manage existing or anticipated interest rate or exchange rate
risks and not for speculative purposes and subordinated to the rights
of the Lender Parties hereunder in a manner that is acceptable to the
Required Lenders in an aggregate notional amount not to exceed
$50,000,000 at any time outstanding;
(ii) in the case of any of its Subsidiaries (other than any
Excluded Subsidiary or any Inactive Foreign Subsidiary),
(A) Debt owed to the Borrower or to a wholly-owned
Subsidiary of the Borrower; and
(iii) in the case of the Borrower and any of its
Subsidiaries,
(A) Debt secured by Permitted Liens described in clause (c)
or (d) of the definition of Permitted Liens; provided, however, that
the principal amount of any such Debt incurred during any fiscal year
shall not exceed $15,000,000;
(B) the Surviving Debt;
(C) Debt consisting of Capitalized Leases entered into
pursuant to Permitted Sale-Leaseback Transactions;
(D) Debt of the Borrower in an aggregate principal amount
not to exceed $20,000,000 incurred with respect to any Permitted Sale-
Leaseback Repurchase;
(E) Debt of any Excluded Subsidiary permitted by the
organizational documents of such Excluded Subsidiary;
59
<PAGE>
(F) Debt consisting of a Permitted Refinancing;
(G) additional unsecured Debt of the Borrower and its
Subsidiaries not to exceed $25,000,000 at any time outstanding; and
(H) indorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of business;
provided, however, that notwithstanding any contrary provision hereof or of any
other Loan Document, the Borrower shall not incur any Indebtedness (as defined
in the indenture relating to the senior subordinated notes of the Borrower
described in clause (A) of the definition of "Permitted Subordinated Debt"),
other than Debt under the Loan Documents, in reliance upon clause (i) of the
second paragraph of Section 4.07(a) of such indenture or in reliance on any
corresponding provision of any Permitted Refinancing thereof.
(c) Lease Obligations. Create, incur, assume or suffer to exist, or
permit any of its Subsidiaries to create, incur, assume or suffer to exist, any
obligations as lessee under any transaction that is not a Capitalized Lease for
the rental or hire of real or personal property in connection with any sale and
leaseback transaction other than (i) the CRC Leases or (ii) Permitted
Sale-Leaseback Transactions.
(d) Mergers, Etc. Merge into or consolidate with any Person or
permit any Person to merge into it, or permit any of its Subsidiaries to do so,
except as contemplated by Section 6.01(m) and except that (i) any wholly-owned
Solvent Subsidiary (other than an Excluded Subsidiary) of the Borrower may merge
into or consolidate with any other wholly-owned Solvent Subsidiary (other than
an Excluded Subsidiary) of the Borrower provided that, in the case of any such
consolidation, the Person formed by such consolidation shall be a Subsidiary of
the Borrower, and (ii) any of the Borrower's wholly-owned Subsidiaries (other
than an Excluded Subsidiary) that is Solvent may merge into the Borrower.
(e) Sales, Etc. of Assets. Sell, lease, transfer or otherwise
dispose of, or permit any of its Subsidiaries to sell, lease, transfer or
otherwise dispose of, any assets or grant any option or other right to purchase,
lease or otherwise acquire any assets except (i) in a transaction authorized by
Section 6.02(d), (ii) Excluded Asset Sales, (iii) any Permitted CRC Transaction
and (iv) so long as no Default shall occur and be continuing, the grant of any
option or other right to purchase any asset in a transaction which would be
permitted under the provisions of the next preceding clauses (i), (ii) and
(iii).
(f) Investments in Other Persons. Make or hold, or permit any of its
Subsidiaries to make or hold, any Investment in any Person other than
(i) Investments by the Borrower and its Subsidiaries in their
Subsidiaries outstanding on the date hereof and additional investments in
wholly-owned Subsidiaries that are Loan Parties (other than Inactive
Subsidiaries);
60
<PAGE>
(ii) Investments by the Borrower and its Subsidiaries in Excluded
Subsidiaries and Inactive Subsidiaries; provided, however, that the
aggregate Investment by the Borrower and its Subsidiaries in all Excluded
Subsidiaries and Inactive Subsidiaries shall not exceed $3,000,000;
(iii) loans and advances to officers and employees of the
Borrower and its Subsidiaries in the ordinary course of the business of the
Borrower and its Subsidiaries as presently conducted in an aggregate
principal amount not to exceed $2,000,000 at any time outstanding;
(iv) Investments by the Borrower and its Subsidiaries in Cash
Equivalents and in Hedge Agreements permitted under Section 6.02(b)(i)(C);
(v) advances in connection with purchases of equipment and
inventory in the ordinary course of business of the Borrower and its
Subsidiaries as presently conducted, required deposits in connection with
leases and otherwise in the ordinary course of business as presently
conducted in an aggregate principal amount not to exceed $10,000,000 at any
time outstanding and Capital Expenditures otherwise permitted hereunder;
(vi) Investments in joint ventures in an aggregate amount at any
time outstanding not to exceed $4,000,000, subject to Section 6.02(o);
(vii) loans and advances to Jack In The Box franchisees in
the ordinary course of business of the Borrower and its Subsidiaries
consistent with past practice in an aggregate amount at any one time
outstanding not to exceed $5,000,000;
(viii) Investments consisting of Permitted Sale-Leaseback
Repurchases;
(ix) Investments consisting of the assumption of up to $5,000,000
in Debt of the Borrower's franchisees in connection with any purchase of a
restaurant and related assets and assumption of related liabilities from a
franchisee of the Borrower;
(x) Investments consisting of Permitted CRC Transactions; and
(xi) Investments by any Excluded Subsidiary permitted by the
organizational documents of such Excluded Subsidiary; and
(xii) other Investments in an aggregate amount invested not
to exceed $5,000,000.
(g) Dividends, Etc. Declare or pay any dividends, purchase, redeem,
retire, defease or otherwise acquire for value any of its capital stock or any
warrants, rights or options to acquire such capital stock, now or hereafter
outstanding, return any capital to its stockholders as such, make any
distribution of assets, capital stock, warrants, rights, options, obligations or
61
<PAGE>
securities to its stockholders as such or issue or sell any capital stock or any
warrants, rights or options to acquire such capital stock, or permit any of its
Subsidiaries to purchase, redeem, retire, defease or otherwise acquire for value
any capital stock of the Borrower or any warrants, rights or options to acquire
such capital stock or to issue or sell any capital stock or any warrants, rights
or options to acquire such capital stock, except that, so long as no Default
shall have occurred and be continuing, the Borrower may (i) declare and deliver
dividends and distributions payable only in (and to the holders of) common stock
of the Borrower, (ii) the Borrower may issue any stock or stock options or
warrants or derivative rights in respect thereof (including, without limitation,
stock options, restricted stock, stock appreciation rights and phantom stock)
pursuant to any employee benefit plan or program or compensation plan for
officers, employees, directors and consultants, including, without limitation,
employee stock purchase plans, qualified or non-qualified plans of deferred
compensation, 401(K) plans, or similar programs for officers, employees,
directors and consultants, (iii) the Borrower and its Subsidiaries may enter
into any merger or consolidation permitted under Section 6.02(d) and may sell or
otherwise dispose of assets to the extent permitted by Section 6.02(e), (iv) the
Borrower may declare and deliver dividends and distributions payable in cash to
the holders of common stock of the Borrower in an amount up to $10,000,000 per
fiscal year, provided that at the time of declaration thereof and after any such
payment, the Borrower would not be in Default hereunder; and (v) the Borrower
may acquire capital stock of the Borrower, provided that the aggregate purchase
price for any such capital stock in any fiscal year shall not exceed $10,000,000
and that at the time of and immediately after any such acquisition, the Borrower
would not be in Default hereunder.
(h) Change in Nature of Business. Make, or permit any of its
Subsidiaries to make, any material change in the nature of its business as
carried on at the date hereof.
(i) Corporate Organization. (A) Create any Subsidiaries (other than
Excluded Subsidiaries) not in existence on the date hereof; or (B) amend, or
permit any of its Subsidiaries (whether or not existing on the date hereof) to
amend, its certificate or articles of incorporation, bylaws or other
organizational or charter documents.
(j) Accounting Changes. Make or permit, or permit any of its
Subsidiaries to make or permit, any change in accounting policies or reporting
practices, except as required by generally accepted accounting principles.
(k) Prepayments, Etc. of Debt. (i) Prepay, redeem, purchase,
defease or otherwise satisfy prior to the scheduled maturity thereof in any
manner the CRC Excluded Debt or any Debt other than (A) the prepayment of the
Advances in accordance with the terms of this Agreement, (B) regularly scheduled
or required repayments or redemptions of Surviving Debt, (C) the redemption of
the Existing Senior Notes as contemplated hereby and (D) the redemption of the
Existing Senior Subordinated Notes following the issuance of the senior
subordinated notes described in clause (A) of the definition of "Permitted
Subordinated Debt"; (ii) make any payment in violation of any subordination
terms of any Debt; or (iii) amend, modify or change in any manner any term or
condition of any Surviving Debt or Permitted Subordinated Debt in a manner
adverse to the Agent or the Lenders, or permit any of its Subsidiaries to do any
of the foregoing other than to prepay any Debt payable to the Borrower.
62
<PAGE>
(l) Payment Restrictions Affecting Certain Subsidiaries. Enter into,
or permit any of its Subsidiaries (other than any Excluded Subsidiary) to enter
into, any agreement, instrument or other document which directly or indirectly
prohibits or restricts in any manner, or would have the effect of prohibiting or
restricting in any manner, the ability of any of the Borrower's Subsidiaries
(other than any Excluded Subsidiary) to (i) pay dividends or make any other
distributions in respect of its capital stock or any other equity interest or
participation in its profits owned by the Borrower or any of its Subsidiaries,
or pay or repay any Debt owed to the Borrower or any of its Subsidiaries, (ii)
make loans or advances to the Borrower, or (iii) transfer any of its properties
or assets to the Borrower or any of its Subsidiaries; provided, however, that
the foregoing provisions shall not restrict any encumbrances or restrictions:
(A) existing on the Closing Date in any agreements in effect on the Closing
Date, and any modifications, extensions, refinancings, renewals, substitutions
or replacements of such agreements, provided that the encumbrances and
restrictions in any such modifications, extensions, refinancings, renewals,
substitutions or replacements are no less favorable in any material respect to
the Lender Parties than those encumbrances or restrictions that are then in
effect and that are being modified, extended, refinanced, renewed, substituted
or replaced; (B) existing under or by reason of applicable law; (C) existing
with respect to any Person or the property or assets of such Person acquired by
the Borrower or any Subsidiary thereof, existing at the time of such acquisition
and not incurred in contemplation thereof, which encumbrances or restrictions
are not applicable to any Person or the property or assets of any Person other
than such Person or the property or assets of such Person so acquired, and any
modifications, extensions, refinancings, renewals, substitutions or replacements
of such agreements, provided that the encumbrances and restrictions in any such
modifications, extensions, refinancings, renewals, substitutions or replacements
are no less favorable in any material respect to the Lender Parties than those
encumbrances or restrictions that are then in effect and that are being
modified, extended, refinanced, renewed, substituted or replaced; and (D) in the
case of clause (iii) above, (X) that restrict in a customary manner the
subletting, assignment or transfer of any property or asset that is a lease,
license, conveyance or contract or similar property or asset, (Y) existing by
virtue of any transfer of, agreement to transfer, option or right with respect
to, or Lien on, any property or assets of the Company or any Subsidiary thereof
(other than any Excluded Subsidiary) not otherwise prohibited hereby or (Z)
arising or agreed to in the ordinary course of business, not relating to any
Debt, and that do not, individually or in the aggregate, detract from the value
of property or assets of the Borrower or any Subsidiary thereof (other than any
Excluded Subsidiary) in any manner material to the Borrower or any Subsidiary
thereof (other than any Excluded Subsidiary). Nothing contained in this Section
6.02(l) shall prevent the Borrower or any Subsidiary thereof from (1) creating,
incurring, assuming or suffering to exist any Liens otherwise permitted by
Section 6.02(a) or (2) restricting the sale or other disposition of property or
assets of the Borrower or its Subsidiaries that secure Debt of the Borrower or
any of its Subsidiaries to the extent such Liens and such Debts are permitted
hereunder.
(m) Negative Pledge. From and after the Collateral Release Date,
enter into or permit any of its Subsidiaries (other than any Excluded
Subsidiary) to enter into any agreement prohibiting or conditioning the creation
or assumption of any Lien upon any of its property or assets other than any
agreement (i) in favor of the Agent and the Lender Parties or (ii) in connection
with any Surviving Debt and any Debt of a Subsidiary outstanding on the date
63
<PAGE>
such Subsidiary first becomes a Subsidiary; provided that this Section 6.02(m)
shall not apply to restrictions under Capitalized Leases with respect to the
property subject thereto or to Debt secured by Liens of the type described in
clause (d) of the definition of Permitted Liens, provided such restrictions are
by their terms effective only against the assets subject to such Liens.
(n) Partnerships. Become a general partner in any general or limited
partnership (other than an Excluded Subsidiary), or permit any of its
Subsidiaries (other than an Excluded Subsidiary) to become a general partner in
any general or limited partnership, other than any Subsidiary the sole assets of
which consist of its interest in such partnership.
Section 6.03. Reporting Requirements. So long as any Advance shall
remain unpaid, any Letter of Credit shall be outstanding or any Lender shall
have any Commitment hereunder, the Borrower will, unless the Required Lenders
shall otherwise consent in writing, furnish (or, in the case of the items set
forth in Section 6.03(g), make available) to the Lender Parties:
(a) Default Notice. As soon as possible and in any event within two
days after the occurrence of each Default continuing on the date of such
statement, a statement of the chief financial officer or treasurer of the
Borrower setting forth details of such Default and the action that the Borrower
has taken and proposes to take with respect thereto
(b) Quarterly Financials. As soon as available and in any event
within 45 days after the end of each of the first three quarters of each fiscal
year of the Borrower, Consolidated balance sheets of the Borrower and its
Subsidiaries as of the end of such quarter and Consolidated statements of income
and cash flows of the Borrower and its Subsidiaries for the period commencing
at the end of the previous fiscal year and ending with the end of such quarter,
setting forth in each case in comparative form the corresponding figures for the
corresponding period of the preceding fiscal year, all in reasonable detail and
duly certified (subject to year-end audit adjustments) by the chief financial
officer or chief accounting officer of the Borrower as having been prepared in
accordance with GAAP, together with (i) a certificate of said officer stating
that the representations and warranties in Section 5.01 are true and correct in
all material respects as of the date of such certificate and that no Default has
occurred and is continuing or, if a Default has occurred and is continuing, a
statement as to the nature thereof and the action that the Borrower has taken
and proposes to take with respect thereto and (ii) a schedule in form
satisfactory to the Agent of the computations used by the Borrower in
determining compliance with the covenants contained in Sections 6.02(a), (b),
(c), (e), (f) and (g) and Sections 6.04(a) through (e) inclusive.
(c) Annual Financials. As soon as available and in any event within
90 days after the end of each fiscal year of the Borrower, a copy of the annual
audit report for such year for the Borrower and its Subsidiaries, including
therein Consolidated balance sheets of the Borrower and its Subsidiaries as of
the end of such fiscal year and Consolidated statements of income and cash flows
of the Borrower and its Subsidiaries for such fiscal year, in each case
accompanied by an opinion acceptable to the Required Lenders of KPMG Peat
Marwick or other independent public accountants of recognized standing
acceptable to the Required Lenders, together with (i) a certificate of the chief
64
<PAGE>
financial officer or chief accounting officer of the Borrower stating that the
representations and warranties in Section 5.01 are true and correct in all
material respects as of the date of such certificate, no Default has occurred
and is continuing or, if a default has occurred and is continuing, a statement
as to the nature thereof and the action that the Borrower has taken and proposes
to take with respect thereto, and (ii) a schedule in form satisfactory to the
Agent of the computations used by the chief financial officer of the Borrower in
determining, as of the end of such financial year, compliance with the covenants
contained in Sections 6.02(a), (b), (c), (e), (f) and (g) and Sections 6.04(a)
through (e) inclusive.
(d) Annual Forecasts. As soon as available and in any event no later
than 30 days following the end of each fiscal year of the Borrower, forecasts
prepared by management of the Borrower, in form satisfactory to the Agent, of
income statements and cash flow statements for each four week period for the
fiscal year following such fiscal year then ended and a projected year-end
balance sheet and on an annual basis for each fiscal year thereafter until the
Termination Date.
(e) ERISA Events. Promptly and in any event within ten days after
any Loan Party or any of its ERISA Affiliates knows or has reason to know that
any ERISA Event with respect to any Loan Party or any of its ERISA Affiliates
has occurred, a statement of the chief financial officer of the Borrower
describing such ERISA Event and the action, if any, that such Loan Party or such
ERISA Affiliate has taken and proposes to take with respect thereto.
(f) Plan Terminations. Promptly and in any event within ten days
after receipt thereof by any Loan Party or any of its ERISA Affiliates, copies
of each notice from the PBGC stating its intention to terminate any Plan of any
Loan Party or any of its ERISA Affiliates or to have a trustee appointed to
administer any such Plan.
(g) Plan Annual Reports. Promptly and in any event within 30 days
after the filing thereof with the Internal Revenue Service, copies of each
Schedule B (Actuarial Information) to the annual report (Form 5500 Series) with
respect to each Plan of each Loan Party or any of its ERISA Affiliates.
(h) Litigation. Promptly after the commencement thereof, notice of
all actions, suits, investigations, litigation and proceedings before any court
or governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, affecting any Loan Party or any of its
Subsidiaries of the type described in Section 4.01(e), and promptly after the
occurrence thereof, notice of any significant adverse change in the status or
the financial effect on any Loan Party or any of their Subsidiaries of the
Disclosed Litigation from that disclosed in the Borrower's Form 10-K; provided,
that such notice would not, in the opinion of counsel to the Borrower,
constitute a waiver of the attorney-client privilege with respect to any matter
related to such litigation.
(i) Press Releases; Securities Reports. Concurrently with the
sending or filing thereof, copies of all (i) press releases, (ii) proxy
statements, financial statements and reports that any Loan Party or any of its
Subsidiaries sends to its stockholders, and (iii) regular, periodic and special
reports, and all registration statements, that any Loan Party or any of its
65
<PAGE>
Subsidiaries files with the Securities and Exchange Commission (including any
reports on Forms 10-K or 10-Q) or any governmental authority that may be
substituted therefor, or with any national securities exchange.
(j) Creditor Reports. Promptly after the furnishing thereof, copies
of any statement or report furnished to any other holder of the securities of
any Loan Party or of any of its Subsidiaries pursuant to the terms of any
indenture, loan or credit or similar agreement and not otherwise required to be
furnished to the Lender Parties pursuant to any other clause of this Section
6.03.
(k) Environmental Conditions. Promptly after the occurrence thereof,
notice of any condition or occurrence on any property of any Loan Party or any
of its Subsidiaries that results in a material noncompliance by any Loan Party
or any of its Subsidiaries with any Environmental Law or Environmental Permit or
would be reasonably likely to (i) form the basis of an Environmental Action
against any Loan Party or any of its Subsidiaries or such property that could
have a Material Adverse Effect or (ii) cause any such property to be subject to
any restrictions on ownership, occupancy, use or transferability under any
Environmental Law.
(l) Other Information. Such other information respecting the
business, condition (financial or otherwise), operations, performance,
properties or prospects of any Loan Party or any of its Subsidiaries as any
Lender Party may from time to time reasonably request.
Section 6.04. Financial Covenants. So long as any Advance shall
remain unpaid, any Letter of Credit shall be outstanding or any Lender shall
have any Commitment hereunder, the Borrower will, unless the Required Lenders
otherwise consent in writing:
(a) Net Worth. Maintain a Consolidated Net Worth of not less than an
amount equal to the sum of: (i) $90,045,000, plus, (ii) 50% of the Consolidated
Net Income arising or otherwise attributable to periods commencing on or after
January 18, 1998, plus (iii) 100% of the Net Cash Proceeds of the sale or
issuance by the Borrower or any of its Subsidiaries of any capital stock, any
securities convertible into or exchangeable for such capital stock or any
warrants, rights or options to acquire such capital stock, plus (iv) 100% of the
excess of Consolidated total assets over Consolidated total liabilities of or
attributable to any Person or business acquired or formed on or after the
Closing Date.
(b) Fixed Charge Coverage Ratio. Maintain, for each period of four
consecutive fiscal quarters ending as of the last day of any fiscal quarter, a
ratio of Consolidated EBITDA plus rental expense under leases of real or
personal, or mixed, property during such period to the sum of (i) interest
expense of the Borrower and its Subsidiaries on, and amortization of debt
discount in respect of, all Debt during such period plus (ii) rental expense of
the Borrower and its Subsidiaries under leases of real or personal, or mixed,
property during such period plus (iii) principal amounts of all Debt payable
during such period by the Borrower and its Subsidiaries of not less than
1.25:1.00 at any time.
66
<PAGE>
(c) Funded Debt to EBITDA Ratio. Maintain as at the end of any
period of four consecutive fiscal quarters ending during a test period set forth
below a ratio of Funded Debt of the Borrower and its Subsidiaries on a
Consolidated basis to Consolidated EBITDA of not more than the amount set forth
below for each period set forth below:
Fiscal Quarter
Ending On Ratio
----------------------- ---------
Closing Date through and
including July 11, 1999 3.75:1.00
July 12, 1999 through and
including July 8, 2001 3.50:1.00
July 9, 2001 through and
including the Termination Date 3.00:1.00
provided, however, that, notwithstanding anything to the contrary herein, at
any time on or after the Collateral Release Date, the Borrower will maintain a
ratio of Funded Debt of the Borrower and its Subsidiaries on a Consolidated
basis to Consolidated EBITDA of not greater than 3.00:1.00 at any time.
(d) Capital Expenditures. Not make, or permit any of its
Subsidiaries to make, any Capital Expenditures that would cause the aggregate of
all such Capital Expenditures made by the Borrower and its Subsidiaries in any
period set forth below to exceed the amount set forth below for such period:
Fiscal Year Amount
----------- ------------
1998 $115,000,000
1999 $125,000,000
2000 $140,000,000
2001 $160,000,000
2002 $166,000,000
2003 $166,000,000
The Borrower and its Subsidiaries may carry forward to the next
succeeding fiscal year only (but not to subsequent fiscal years) the amount by
which the actual Capital Expenditures of the Borrower and its Subsidiaries in
any fiscal year are less than the Capital Expenditures amount set forth above as
permitted in such fiscal year; provided, however, that the maximum amount that
may be carried forward to the next succeeding fiscal year shall be $10,000,000.
ARTICLE VII.
EVENTS OF DEFAULT
Section 7.01. Events of Default. If any of the following events
("Events of Default") shall occur and be continuing:
67
<PAGE>
(a) the Borrower shall fail to pay any principal of any Advance when
the same becomes due and payable; or any Loan Party shall fail to make any
interest or any other payment under any Loan Document within three days after
such interest or other amount becomes due and payable; or
(b) any representation or warranty made by any Loan Party (or any of
its officers) under or in connection with any Loan Document shall prove to have
been incorrect in any material respect when made or deemed made; or
(c) the Borrower shall fail to perform or observe any term, covenant
or agreement contained in Section 6.02 or 6.04; or
(d) any Loan Party shall fail to perform any other term, covenant or
agreement contained in any Loan Document on its part to be performed or observed
if such failure shall remain unremedied for 10 days after written notice thereof
shall have been given to the Borrower by the Agent or any Lender Party; or
(e) any Loan Party or any of its Subsidiaries shall fail to pay any
principal of, premium or interest on or any other amount payable in respect of
any Debt that is outstanding in a principal or notional amount of at least
$5,000,000 in the aggregate (but excluding Debt outstanding hereunder) of such
Loan Party or such Subsidiary (as the case may be), when the same becomes due
and payable (whether by scheduled maturity, required prepayment, acceleration,
demand or otherwise); or any other event shall occur or condition shall exist
under any agreement or instrument relating to any such Debt, if the effect of
such event or condition is to accelerate, or to permit the acceleration of, the
maturity of such Debt or otherwise to cause, or to permit the holder thereof to
cause, such Debt to mature; or any such Debt shall be declared to be due and
payable or required to be prepaid or redeemed (other than by a regularly
scheduled required prepayment or redemption), purchased or defeased, or an offer
to prepay, redeem, purchase or defease such Debt shall be required to be made,
in each case prior to the stated maturity thereof; or
(f) any Loan Party or any of its Subsidiaries shall generally not pay
its debts as such debts become due, or shall admit in writing its inability to
pay its debts generally, or shall make a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against any Loan Party or
any of its Subsidiaries seeking to adjudicate it a bankrupt or insolvent, or
seeking liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors, or seeking the
entry of an order for relief or the appointment of a receiver, trustee, or other
similar official for it or for any substantial part of its property; or any Loan
Party or any of its Subsidiaries shall take any corporate action to authorize
any of the actions set forth above in this subsection (f); or
(g) any judgment or order for the payment of money in excess of
$5,000,000 (to the extent not paid or fully covered by insurance) shall be
rendered against any Loan Party or any of its Subsidiaries and either (i)
enforcement proceedings shall have been commenced by any creditor upon such
judgment or order or (ii) there shall be any period of 60 consecutive days
68
<PAGE>
during which a stay of enforcement of such judgment or order, by reason of a
pending appeal or otherwise, shall not be in effect; or
(h) any non-monetary judgment or order shall be rendered against any
Loan Party or any of its Subsidiaries that could have a Material Adverse Effect,
and there shall be any period of 60 consecutive days during which a stay of
enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; or
(i) any provision of any Loan Document after delivery thereof
pursuant to Section 4.01 shall for any reason cease to be valid and binding on
or enforceable against any Loan Party to it, or any such Loan Party shall so
state in writing; or
(j) any Collateral Document after delivery thereof pursuant to
Section 4.01 shall, after the making of all appropriate filings or notifications
necessary to create a perfected Lien thereon, for any reason (other than
pursuant to the terms thereof) cease to create a valid and perfected Lien with
the priority required by the applicable Collateral Document on the Collateral
purported to be covered thereby; or
(k) a Change of Control shall occur; or
(l) any ERISA Event shall have occurred with respect to a Plan of any
Loan Party or any of its ERISA Affiliates and the liability of the Loan Parties
and their ERISA Affiliates related to such ERISA Event and any and all other
ERISA Events which shall have occurred and then exist with respect to any Plans
of the Loan Parties and their ERISA Affiliates exceeds (i) $18,254,000 (the
amount of the Insufficiency on the Closing Date) plus $4,000,000 to the extent
such liability relates to the Insufficiency of the Plans, or (ii) $2,000,000 in
all other circumstances; or
(m) any Loan Party or any of its ERISA Affiliates shall have been
notified by the sponsor of a Multiemployer Plan of any Loan Party or any of its
ERISA Affiliates that it has incurred Withdrawal Liability to such Multiemployer
Plan in an amount that, when aggregated with all other amounts required to be
paid to Multiemployer Plans by the Loan Parties and their ERISA Affiliates as
Withdrawal Liability (determined as of the date of such notification), exceeds
$2,000,000 or requires payments exceeding $1,000,000 per annum; or
(n) any Loan Party or any of its ERISA Affiliates shall have been
notified by the sponsor of a Multiemployer Plan of any Loan Party or any of its
ERISA Affiliates that such Multiemployer Plan is in reorganization or is being
terminated, within the meaning of Title IV of ERISA, and as a result of such
reorganization or termination the aggregate annual contributions of the Loan
Parties and their ERISA Affiliates to all Multiemployer Plans that are then in
reorganization or being terminated have been or will be increased over the
amounts contributed to such Multiemployer Plans for the plan years of such
Multiemployer Plans immediately preceding the plan year in which such
reorganization or termination occurs by an amount exceeding $2,000,000,
69
<PAGE>
then, and in any such event, the Agent (i) shall at the request, or may with the
consent, of the Required Lenders, by notice to the Borrower, declare the
obligation of each Lender to make Advances and of the any Issuing Bank to issue
Letters of Credit to be terminated, whereupon the same shall forthwith
terminate, and (ii) shall at the request, or may with the consent, of the
Required Lenders, by notice to the Borrower, declare the Notes, all interest
thereon and all other amounts payable under this Agreement and the other Loan
Documents to be forthwith due and payable, whereupon the Notes, all such
interest and all such amounts shall become and be forthwith due and payable,
without presentment, demand, protest or further notice of any kind, all of which
are hereby expressly waived by the Borrower; provided, however, that in the
event of an actual or deemed entry of an order for relief with respect to any
Loan Party or any of its Subsidiaries under the Federal Bankruptcy Code, (x) the
obligation of each Lender Party to make Advances and of the Issuing Bank to
issue Letters of Credit shall automatically be terminated and (y) the Notes, all
such interest and all such amounts shall automatically become and be due and
payable, without presentment, demand, protest or any notice of any kind, all of
which are hereby expressly waived by the Borrower.
Section 7.02. Actions in Respect of the Letters of Credit Upon
Default. If any Event of Default shall have occurred and be continuing, the
Agent may, irrespective of whether it is taking any of the actions described in
Section 7.01 or otherwise, make demand upon the Borrower to, and forthwith upon
such demand the Borrower will, pay to the Agent on behalf of the Lender Parties
in same day funds at the Agent's office designated in such demand, for deposit
to a non-interest bearing account established by the Agent for such purposes or
for purposes of Section 2.05(b)(iv) (the "L/C Cash Collateral Account"), an
amount equal to the aggregate Available Amount of all Letters of Credit then
outstanding (and the Borrower hereby grants to the Agent, for the ratable
benefit of the Agent and each Lender Party, a continuing security interest in
all amounts at any time on deposit in the L/C Cash Collateral Account to secure
all Letter of Credit Obligations from time to time outstanding and all other
Obligations hereunder). If at any time the Agent determines that any funds held
in the L/C Cash Collateral Account are subject to any right or claim of any
Person other than the Agent and the Lender Parties or that the total amount of
such funds is less than the aggregate Available Amount of all Letters of Credit,
the Borrower will, forthwith upon demand by the Agent, pay to the Agent, as
additional funds to be deposited and held in the L/C Cash Collateral Account, an
amount equal to the excess of (a) such aggregate Available Amount over (b) the
total amount of funds, if any, then held in the L/C Cash Collateral Account that
the Agent determines to be free and clear of any such right and claim.
ARTICLE VIII.
THE AGENT
Section 8.01. Authorization and Action. Each Lender Party hereby
appoints and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers and discretion under this Agreement and the other Loan
Documents as are delegated to the Agent by the terms hereof and thereof,
together with such powers and discretion as are reasonably incidental thereto.
As to any matters not expressly provided for by the Loan Documents (including,
without limitation, enforcement or collection of the Notes, the Agent shall not
70
<PAGE>
be required to exercise any discretion or take any action, but shall be required
to act or to refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of the Required Lenders, and such
instructions shall be binding upon all Lender Parties and all holders of Notes;
provided, however, that the Agent shall not be required to take any action that
exposes the Agent to personal liability or that is contrary to this Agreement or
applicable law. The Agent agrees to give to each Lender Party prompt notice of
each notice given to it by the Borrower pursuant to the terms of this Agreement.
Section 8.02. Agent's Reliance, Etc. Neither the Agent nor any of
its directors, officers, agents or employees shall be liable for any action
taken or omitted to be taken by it or them under or in connection with the Loan
Documents, except for its or their own gross negligence or willful misconduct.
Without limitation of the generality of the foregoing, the Agent: (i) may treat
the payee of any Note as the holder thereof until the Agent receives and accepts
an Assignment and Acceptance entered into by the Lender that is the payee of
such Note, as assignor, and an Eligible Assignee, as assignee, as provided in
Section 9.07; (ii) may consult with legal counsel (including counsel for any
Loan Party), independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken in good faith by
it in accordance with the advice of such counsel, accountants or experts; (iii)
makes no warranty or representation to any Lender Party and shall not be
responsible to any Lender Party for any statements, warranties or
representations made in or in connection with the Loan Documents; (iv) shall not
have any duty to ascertain or to inquire as to the performance or observance of
any of the terms, covenants or conditions of any Loan Document on the part of
any Loan Party or to inspect the property (including the books and records) of
any Loan Party; (v) shall not be responsible to any Lender Party for the due
execution, legality, validity, enforceability, genuineness, sufficiency or value
of any Loan Document or any other instrument or document furnished pursuant
hereto or thereto; and (vi) shall incur no liability under or in respect of any
Loan Document by acting upon any notice, consent, certificate or other
instrument or writing (which may be by telegram, telecopy, cable or telex)
believed by it to be genuine and signed or sent by the proper party or parties.
Section 8.03. NationsBank and Affiliates. With respect to its
Commitments, the Advances made by it and the Notes issued to it, NationsBank
shall have the same rights and powers under the Loan Documents as any other
Lender Party and may exercise the same as though it were not the Agent; and the
terms "Lender", "Lenders", "Lender Party" or "Lender Parties" shall, unless
otherwise expressly indicated, include NationsBank in its individual capacity.
NationsBank and its affiliates may accept deposits from, lend money to, act as
trustee under indentures of, accept investment banking engagements from and
generally engage in any kind of business with, any Loan Party, any of its
Subsidiaries and any Person who may do business with or own securities of any
Loan Party or any such Subsidiary, all as if NationsBank were not the Agent and
without any duty to account therefor to the Lender Parties.
Section 8.04. Lender Party Credit Decision. Each Lender Party
acknowledges that it has, independently and without reliance upon the Agent or
any other Lender Party and based on the financial statements referred to in
Section 5.01 and such other documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
71
<PAGE>
Agreement. Each Lender Party also acknowledges that it will, independently and
without reliance upon the Agent or any other Lender Party and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement.
Section 8.05. Indemnification. Each Lender Party severally agrees to
indemnify the Agent and the Arranger (to the extent not promptly reimbursed by
the Borrower) from and against such Lender Party's ratable share of any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever that may be
imposed on, incurred by, or asserted against the Agent or the Arranger in any
way relating to or arising out of the Loan Documents or any action taken or
omitted by the Agent or the Arranger under the Loan Documents; provided,
however, that no Lender Party shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the Agent's or the Arranger's
gross negligence or willful misconduct. Without limitation of the foregoing,
each Lender Party agrees to reimburse each of the Agent and the Arranger
promptly upon demand for its ratable share of any costs and expenses payable by
the Borrower under Section 9.04, to the extent that the Agent and the Arranger
are not promptly reimbursed for such costs and expenses by the Borrower. For
purposes of this Section 8.05, the Lender Parties' respective ratable shares of
any amount shall be determined, at any time, according to the sum of (a) the
aggregate principal amount of the Advances (other than L/C Advances) outstanding
at such time and owing to the respective Lender Parties, (b) their respective
Pro Rata Shares of the aggregate Letter of Credit Obligations outstanding at
such time, plus (c) their respective Unused Revolving Commitments at such time.
The failure of any Lender Party to reimburse the Agent or the Arranger promptly
upon demand for its ratable share of any amount required to be paid by the
Lender Parties to the Agent or the Arranger as provided herein shall not relieve
any other Lender Party of its obligation hereunder to reimburse the Agent or the
Arranger, as applicable, for its ratable share of such amount, but no Lender
Party shall be responsible for the failure of any other Lender Party to
reimburse the Agent or the Arranger for such other Lender Party's ratable share
of such amount.
Section 8.06. Successor Agents. The Agent may resign at any time by
giving written notice thereof to the Lender Parties and the Borrower and may be
removed at any time with or without cause by the Required Lenders. Upon any
such resignation or removal, the Required Lenders shall have the right to
appoint a successor Agent. If no successor Agent shall have been so appointed
by the Required Lenders, and shall have accepted such appointment, within 30
days after the retiring Agent's giving of notice of resignation or the Required
Lenders' removal of the retiring Agent, then the retiring Agent may, on behalf
of the Lender Parties, appoint a successor Agent, which shall be a commercial
bank organized under the laws of the United States or of any State thereof and
having a combined capital and surplus of at least $250,000,000. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent and upon
the execution and filing or recording of such financing statements, or
amendments thereto, and such amendments or supplements to the Mortgages, and
such other instruments or notices, as may be necessary or desirable, or as the
Required Lenders may request, in order to continue the perfection of the Liens
72
<PAGE>
granted or purported to be granted by the Collateral Documents, such successor
Agent shall succeed to and become vested with all the rights, powers,
discretion, privileges and duties of the retiring Agent, and the retiring Agent
shall be discharged from its duties and obligations under the Loan Documents.
After any retiring Agent's resignation or removal hereunder as Agent, the
provisions of this Article VIII shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent under this Agreement.
ARTICLE IX.
MISCELLANEOUS
Section 9.01. Amendments, Etc; Release of Collateral.
(a) Amendments. No amendment or waiver of any provision of this
Agreement or the Notes, nor consent to any departure by the Borrower therefrom,
shall in any event be effective unless the same shall be in writing and signed
by the Required Lenders (and, in the case of any such amendment, the Borrower),
and then such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given; provided, however, that (a) no
amendment, waiver or consent shall, unless in writing and signed by all the
Lender Parties, do any of the following at any time: (i) waive any of the
conditions specified in Section 4.02 or, in the case of the initial Borrowing,
4.01, (ii) change the percentage of the Commitments or of the aggregate unpaid
principal amount of the Notes that shall be required for the Lender Parties or
any of them to take any action hereunder, (iii) release all or substantially all
of the Collateral (except pursuant to Section 9.01(b)) or release any Guarantor
from its obligations under the Guaranty or (iv) amend this Section 9.01 or amend
Section 2.05, and (b) no amendment, waiver or consent shall, unless in writing
and signed by the Required Lenders and each Lender that has a Commitment under
the Facility affected by such amendment, waiver or consent, (i) increase the
Commitments of such Lender or subject such Lender to any additional obligations,
(ii) reduce the principal of, or interest on, the Notes held by such Lender or
any fees or other amounts payable hereunder to such Lender, or (iii) postpone
any date fixed for any payment of principal of, or interest on, the Notes held
by such Lender or any fees or other amounts payable hereunder to such Lender;
provided further that no amendment, waiver or consent shall, unless in writing
and signed by the Swing Line Lender or the Issuing Bank, as the case may be, in
addition to the Lenders required above to take such action, affect the rights or
obligations of the Swing Line Lender or of the Issuing Bank, as the case may be,
under this Agreement; and provided further that no amendment, waiver or consent
shall, unless in writing and signed by the Agent in addition to the Lenders
required above to take such action, affect the rights or duties of the Agent
under this Agreement or any Note.
(b) Release of Collateral. Anything contained in this Agreement or
any of the other Loan Documents to the contrary notwithstanding, upon delivery
of a certificate of the chief financial officer of the Borrower certifying that
one or more of the Collateral Release Tests has been satisfied and the written
request of the Borrower, the Collateral Documents shall be terminated, and all
collateral pledged under the Collateral Documents shall be released, without
further action on the part of the Agent or any Lender Party (the date of such
release, the "Collateral Release Date"). Any release of collateral pledged
73
<PAGE>
under the Collateral Documents in accordance with the provisions of this Section
9.01(b) shall be deemed to be a release of such pledged collateral upon the
approval thereof by all of the Lender Parties for purposes of the Loan
Documents. In connection with any such release, the Agent shall, upon request,
at the Borrower's expense, execute all such further documents and instruments as
may be reasonably requested by the Borrower in order to more fully evidence or
effect such release.
Section 9.02. Notices, Etc. All notices and other communications
provided for hereunder shall be in writing (including telegraphic, telecopy,
telex or cable communication) and mailed, telegraphed, telecopied, telexed,
cabled or delivered, if to the Borrower, at its address at Foodmaker, Inc.,
9330 Balboa Avenue, San Diego, California 92123-1516, Telecopier No.
(619) 571-2101, Attn: Treasurer, with a courtesy copy to the Borrower at
Telecopier No. (619) 277-9791, Attn: Treasurer and a courtesy copy to Andrew E.
Bogen, Gibson, Dunn & Crutcher LLP, 333 South Grand Ave., Los Angeles, CA
90071; if to any Initial Lender, at its Domestic Lending Office specified
opposite its name on Schedule I hereto; if to any other Lender, at its Domestic
Lending Office specified in the Assignment and Acceptance pursuant to which it
became a Lender; and if to the Agent, at its address at 901 Main Street, Dallas,
Texas 75202, Telecopier No.: (214) 508-2118, Attn: Donna Cornell, Agency
Services, with a copy to NationsBank, 444 South Flower Street, Suite 4100, Los
Angeles, California 90071-2901, Telecopier No. (213) 624-5815, Attn: George V.
Hausler; or, as to each party, at such other address as shall be designated by
such party in a written notice to the other parties. All such notices and
communications shall, when mailed, telegraphed, telecopied, telexed or cabled,
be effective when deposited in the mails, delivered to the telegraph company,
transmitted by telecopier, confirmed by telex answerback or delivered to the
cable company, respectively, except that notices and communications to the Agent
pursuant to Article II, III, IV or VIII shall not be effective until received
by the Agent.
Section 9.03. No Waiver; Remedies. No failure on the part of any
Lender Party or the Agent to exercise, and no delay in exercising, any right
hereunder, under any Note or under any other Loan Document shall operate as a
waiver thereof; nor shall any single or partial exercise of any such right
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
Section 9.04. Costs and Expenses.
(a) The Borrower agrees to pay on demand (i) all reasonable costs and
expenses of the Agent and the Arranger in connection with the preparation,
execution, delivery, syndication, administration, modification and amendment of
the Loan Documents (including, without limitation, (A) all due diligence,
transportation, computer, duplication, appraisal, audit, insurance, consultant,
search, filing and recording fees and expenses and (B) the reasonable fees and
expenses of counsel for the Agent and the Arranger with respect thereto, with
respect to advising each of the Agent and the Arranger as to its rights and
responsibilities, or the perfection, protection or preservation of rights or
interests, under the Loan Documents, with respect to negotiations with any Loan
Party or with other creditors of any Loan Party or any of its Subsidiaries
arising out of any Default or any events or circumstances that may give rise to
74
<PAGE>
a Default and with respect to presenting claims in or otherwise participating in
or monitoring any bankruptcy, insolvency or other similar proceeding involving
creditors' rights generally and any proceeding ancillary thereto) and (ii) all
costs and expenses of the Agent, the Arranger, each Lender and each Issuing Bank
in connection with the enforcement of the Loan Documents, whether in any action,
suit or litigation, any bankruptcy, insolvency or other similar proceeding
affecting creditors' rights generally or otherwise (including, without
limitation, the reasonable fees and expenses of counsel for the Agent, the
Arranger and each Lender Party with respect thereto).
(b) The Borrower agrees to indemnify and hold harmless the Agent, the
Arranger, each Lender, each Issuing Bank and each of their Affiliates and their
officers, directors, employees, agents and advisors (each, an "Indemnified
Party") from and against any and all claims, damages, losses, liabilities and
expenses (including, without limitation, reasonable fees and expenses of
counsel) that may be incurred by or asserted or awarded against any Indemnified
Party, in each case arising out of or in connection with or by reason of, or in
connection with the preparation for a defense of, any investigation, litigation
or proceeding arising out of, related to or in connection with (i) this
Agreement or any other Loan Document, the actual or proposed use of the proceeds
of any Advance or of any Letter of Credit issued hereunder or any of the
transactions contemplated hereby (including the redemption of the Existing
Senior Notes as contemplated hereby) or by the other Loan Documents, or (ii) the
actual or alleged presence of Hazardous Materials on any property of any Loan
Party or any of its Subsidiaries or any Environmental Action relating in any way
to any Loan Party or any of its Subsidiaries, in each case whether or not such
investigation, litigation or proceeding is brought by any Loan Party, its
directors, shareholders or creditors or an Indemnified Party or any Indemnified
Party is otherwise a party thereto and whether or not the transactions
contemplated hereby are consummated, except to the extent such claim, damage,
loss, liability or expense is found in a final, non-appealable judgment by a
court of competent jurisdiction to have resulted from such Indemnified Party's
gross negligence or willful misconduct. The Borrower also agrees not to assert
any claim against the Agent, the Arranger, any Lender Party, any of their
affiliates, or any of their respective directors, officers, employees, attorneys
and 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 or in any other Loan Document or the actual or proposed use
of the proceeds of the Advances.
(c) If any payment of principal of, or Conversion of, any Eurodollar
Rate Advance is made by the Borrower to or for the account of a Lender Party
other than on the last day of the Interest Period for such Advance, as a result
of a payment or conversion pursuant to Section 2.05 or 2.06, acceleration of the
maturity of the Notes pursuant to Section 7.01, or for any other reason, or by
an Eligible Assignee to a Lender Party other than on the last day of the
Interest Period for such Advance upon an assignment of rights and obligations
under this Agreement pursuant to a demand by the Borrower pursuant to Section
9.07(a), the Borrower shall, upon demand by such Lender Party (with a copy of
such demand to the Agent), pay to the Agent for the account of such Lender Party
any amounts required to compensate such Lender Party for any additional out-of-
pocket losses, costs or expenses that it may reasonably incur as a result of
such payment, including, without limitation, any out-of-pocket loss, cost or
75
<PAGE>
expense incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by any Lender Party to fund or maintain such Advance.
(d) If any Loan Party fails to pay when due any costs, expenses or
other amounts payable by it under any Loan Document, including, without
limitation, fees and expenses of counsel and indemnities, such amount may be
paid on behalf of such Loan Party by the Agent or any Lender Party, in its sole
discretion and the Borrower shall reimburse the Agent or such Lender Party on
demand for any amounts so paid with interest thereon at the Default Rate from
the date of such payment until so reimbursed.
Section 9.05. Right of Set-off. Upon (a) the occurrence and during
the continuance of any Event of Default and (b) the making of the request or the
granting of the consent specified by Section 7.01 to authorize the Agent to
declare the Notes due and payable pursuant to the provisions of Section 7.01,
each Lender Party and each of is Affiliates is hereby authorized at any time and
from time to time, to the fullest extent permitted by law, to set off and
otherwise apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any time owing
by such Lender Party or such Affiliate to or for the credit or the account of
the Borrower against any and all of the Obligations of the Borrower now or
hereafter existing under this Agreement and the Note or Notes held by such
Lender Party, irrespective of whether such Lender Party shall have made any
demand under this Agreement or such Note or Notes and although such obligations
may be unmatured. Each Lender Party agrees promptly to notify the Borrower
after any such set-off and application; provided, however, that the failure to
give such notice shall not affect the validity of such set-off and application.
The rights of each Lender Party and its Affiliates under this Section are in
addition to other rights and remedies (including, without limitation, other
rights of set-off) that such Lender Party and its Affiliates may have.
Section 9.06. Binding Effect. This Agreement shall become effective
when it shall have been executed by the Borrower and the Agent and when the
Agent shall have been notified by each Bank that such Bank has executed it and
thereafter shall be binding upon and inure to the benefit of the Borrower, the
Agent and each Lender Party and their respective successors and assigns, except
that the Borrower shall not have the right to assign its rights hereunder or any
interest herein without the prior written consent of the Lender Parties.
Section 9.07. Assignments and Participations.
(a) Each Lender Party may and, if demanded by the Borrower (which
demand may only be made within 30 days after a demand by such Lender Party
pursuant to Section 2.08(a), 2.08(b) or 2.10 upon at least 10 Business Days'
notice to such Lender Party and the Agent), will assign to one or more banks or
other entities all or a portion of its rights and obligations under this
Agreement (including, without limitation, all or a portion of its Commitment or
Commitments, the Advances owing to it and the Note or Notes held by it);
provided, however, that (i) each such assignment shall be of a uniform, and not
a varying, percentage of all rights and obligations under and in respect of all
of the Facilities, (ii) except in the case of an assignment to a Person that,
immediately prior to such assignment, was a Lender Party or an assignment of all
76
<PAGE>
of a Lender Party's rights and obligations under this Agreement, the amount of
the Commitment of the assigning Lender Party being assigned pursuant to each
such assignment (determined as of the date of the Assignment and Acceptance with
respect to such assignment) shall in no event be less than $10,000,000, (iii)
each such assignment shall be to an Eligible Assignee, (iv) each such assignment
made as a result of a demand by the Borrower pursuant to this Section 9.07(a)
shall be arranged by the Borrower after consultation with the Agent and shall be
either an assignment of all of the rights and obligations of the assigning
Lender Party under this Agreement or an assignment of a portion of such rights
and obligations made concurrently with another such assignment or other such
assignments that together cover all of the rights and obligations of the
assigning Lender Party under this Agreement, (v) no Lender Party shall be
obligated to make any such assignment as a result of a demand by the Borrower
pursuant to this Section 9.07(a) unless and until such Lender Party shall have
received one or more payments from either the Borrower or one or more Eligible
Assignees in an aggregate amount at least equal to the aggregate outstanding
principal amount of the Advances owing to such Lender Party, together with
accrued interest thereon to the date of payment of such principal amount and all
other amounts payable to such Lender Party under this Agreement, and (vi) the
parties to each such assignment shall execute and deliver to the Agent, for its
acceptance and recording in the Register, an Assignment and Acceptance, together
with any Note or Notes subject to such assignment and a processing and
recordation fee of $3,500. Upon such execution, delivery, acceptance and
recording, from and after the effective date specified in such Assignment and
Acceptance, (x) the assignee thereunder shall be a party hereto and, to the
extent that rights and obligations hereunder have been assigned to it pursuant
to such Assignment and Acceptance, have the rights and obligations of a Lender
Party hereunder and (y) the Lender Party assignor thereunder shall, to the
extent that rights and obligations hereunder have been assigned by it pursuant
to such Assignment and Acceptance, relinquish its rights and be released from
its obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender Party's
rights and obligations under this Agreement, such Lender Party shall cease to be
a party hereto).
(b) By executing and delivering an Assignment and Acceptance, the
Lender Party assignor thereunder and the assignee thereunder confirm to and
agree with each other and the other parties hereto as follows: (i) other than
as provided in such Assignment and Acceptance, such assigning Lender Party makes
no representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or any other Loan Document or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of, or the perfection or
priority of any lien or security interest created or purported to be created
under or in connection with, this Agreement or any other Loan Document or any
other instrument or document furnished pursuant hereto or thereto; (ii) such
assigning Lender Party makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or any
other Loan Party or the performance or observance by any Loan Party of any of
its obligations under any Loan Document or any other instrument or document
furnished pursuant thereto; (iii) such assignee confirms that it has received a
copy of this Agreement, together with copies of the financial statements
referred to in Section 5.01 and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
such Assignment and Acceptance; (iv) such assignee will, independently and
77
<PAGE>
without reliance upon the Agent, such assigning Lender Party or any other Lender
Party and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under this Agreement; (v) such assignee confirms that it is an Eligible
Assignee; (vi) such assignee appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers and discretion under
the Loan Documents as are delegated to the Agent by the terms hereof, together
with such powers and discretion as are reasonably incidental thereto; and
(vii) such assignee agrees that it will perform in accordance with their terms
all of the obligations which by the terms of this Agreement are required to be
performed by it as a Lender or Issuing Bank, as the case may be.
(c) The Agent shall maintain at its address referred to in Section
9.02 a copy of each Assignment and Acceptance delivered to and accepted by it
and a register for the recordation of the names and addresses of the Lender
Parties and the Commitment under each Facility of, and principal amount of the
Advances owing under each Facility to, each Lender Party from time to time (the
"Register"). The entries in the Register shall be conclusive and binding for
all purposes, absent manifest error, and the Borrower, the Agent and the Lender
Parties may treat each Person whose name is recorded in the Register as a Lender
Party hereunder for all purposes of this Agreement. The Register shall be
available for inspection by the Borrower or any Lender Party at any reasonable
time and from time to time upon reasonable prior notice.
(d) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender Party and an assignee, together with any Note or Notes subject
to such assignment, the Agent shall, if such Assignment and Acceptance has been
completed and is in substantially the form of Exhibit A hereto, (i) accept such
Assignment and Acceptance, (ii) record the information contained therein in the
Register and (iii) give prompt notice thereof to the Borrower. Within five
Business Days after its receipt of such notice, the Borrower, at its own
expense, shall execute and deliver to the Agent in exchange for the surrendered
Note or Notes a new Note to the order of such Eligible Assignee in an amount
equal to the Commitment assumed by it under a Facility pursuant to such
Assignment and Acceptance and, if the assigning Lender Party has retained a
Commitment hereunder under such Facility, a new Note to the order of the
assigning Lender Party in an amount equal to the Commitment retained by it
hereunder. Such new Note or Notes shall be in an aggregate principal amount
equal to the aggregate principal amount of such surrendered Note or Notes, shall
be dated the effective date of such Assignment and Acceptance and shall
otherwise be in substantially the form of Exhibit D-1 or D-2 hereto, as
applicable.
(e) Each Lender Party may sell participations in or to all or a
portion of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitments, the Advances owing to it and
the Note or Notes held by it); provided, however, that (i) such Lender Party's
obligations under this Agreement (including, without limitation, its
Commitments) shall remain unchanged, (ii) such Lender Party shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) such Lender Party shall remain the holder of any such Note for all
purposes of this Agreement, (iv) the Borrower, the Agent and the other Lender
78
<PAGE>
Parties shall continue to deal solely and directly with such Lender Party in
connection with such Lender Party's rights and obligations under this Agreement,
and (v) no participant under any such participation shall have any right to
approve any amendment or waiver of any provision of any Loan Document, or any
consent to any departure by any Loan Party therefrom, except to the extent that
such amendment, waiver or consent would reduce the principal of, or interest on,
the Notes or any fees or other amounts payable hereunder, in each case to the
extent subject to such participation, postpone any date fixed for any payment of
principal of, or interest on, the Notes or any fees or other amounts payable
hereunder, in each case to the extent subject to such participation, release all
or substantially all of the Collateral (other than pursuant to Section 9.01(b))
or release any Guarantor from its obligations under the Guaranty.
(f) Any Lender Party may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
9.07, disclose to the assignee or participant or proposed assignee or
participant, any information relating to the Borrower furnished to such Lender
Party by or on behalf of the Borrower; provided, however, that, prior to any
such disclosure, the assignee or participant or proposed assignee or participant
shall agree to preserve the confidentiality of any Confidential Information
received by it from such Lender Party.
(g) Notwithstanding any other provision set forth in this Agreement,
any Lender Party may at any time create a security interest in all or any
portion of its rights under this Agreement (including, without limitation, the
Advances owing to it and the Note or Notes held by it) in favor of any Federal
Reserve Bank in accordance with Regulation A of the Board of Governors of the
Federal Reserve System.
Section 9.08. Governing Law. THIS AGREEMENT AND THE NOTES SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
CALIFORNIA.
Section 9.09. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
Section 9.10. No Liability of the Issuing Bank. The Borrower assumes
all risks of the acts or omissions of any beneficiary or transferee of any
Letter of Credit with respect to its use of such Letter of Credit. Neither the
Issuing Bank nor any of its officers or directors shall be liable or responsible
for: (a) the use that may be made of any Letter of Credit or any acts or
omissions of any beneficiary or transferee in connection therewith; (b) the
validity, sufficiency or genuineness of documents, or of any endorsement
thereon, even if such documents should prove to be in any or all respects
invalid, insufficient, fraudulent or forged; (c) payment by the Issuing Bank
against presentation of documents that do not comply with the terms of a Letter
79
<PAGE>
of Credit, including failure of any documents to bear any reference or adequate
reference to the Letter of Credit; or (d) any other circumstances whatsoever in
making or failing to make payment under any Letter of Credit, except that the
Borrower shall have a claim against the Issuing Bank, and the Issuing Bank shall
be liable to the Borrower, to the extent of any direct, but not consequential,
damages suffered by the Borrower that the Borrower proves were caused by (i) the
Issuing Bank's willful misconduct or gross negligence in determining whether
documents presented under any Letter of Credit comply with the terms of the
Letter of Credit or (ii) the Issuing Bank's willful failure to make lawful
payment under a Letter of Credit after the presentation to it of a draft and
certificates strictly complying with the terms and conditions of the Letter of
Credit. In furtherance and not in limitation of the foregoing, the Issuing Bank
may accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary.
Section 9.11. Confidentiality. Except as may be required to enforce
the rights and duties established hereunder and under the other Loan Documents
(including establishing and maintaining the perfection and priority of the
security interests in the Collateral), neither the Agent nor any Lender Party
shall disclose any Confidential Information to any Person without the consent of
the Borrower, other than (a) to the Agent's or such Lender Party's Affiliates
and their officers, directors, employees, agents and advisors and to actual or
prospective Eligible Assignees and participants, and then only on a confidential
basis, (b) as required by any law, rule or regulation or judicial process and
(c) as requested or required by any state, federal or foreign authority or
examiner regulating banks or banking.
Section 9.12. Waiver of Jury Trial. EACH OF THE BORROWER, THE AGENT,
THE ISSUING BANK AND THE LENDERS HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT
OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE LOAN DOCUMENTS, THE
ADVANCES, ANY LETTER OF CREDIT OR THE ACTIONS OF THE AGENT OR ANY LENDER PARTY
IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.
80
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
FOODMAKER, INC.
By: HAROLD L. SACHS
---------------
Name: Harold L. Sachs
---------------
Title: Treasurer
---------------
NATIONSBANK OF TEXAS, N.A.,
as Agent
By: GEORGE V. HAUSLER
-----------------
Name: George V. Hausler
-----------------
Title: Vice President
-----------------
CREDIT LYONNAIS LOS ANGELES
BRANCH,
as Documentation Agent
By: DIANNE M. SCOTT
---------------
Name: Dianne M. Scott
---------------
Title: Vice President and Manager
--------------------------
Issuing Bank
------------
NATIONSBANK OF TEXAS, N.A.,
as L/C Bank
By: GEORGE V. HAUSLER
-----------------
Name: George V. Hausler
-----------------
Title: Vice President
-----------------
<PAGE>
Initial Lenders
---------------
NATIONSBANK OF TEXAS, N.A.,
as Initial Lender
By: GEORGE V. HAUSLER
-----------------
Name: George V. Hausler
-----------------
Title: Vice President
-----------------
CREDIT LYONNAIS LOS ANGELES
BRANCH,
as Initial Lender
By: DIANNE M. SCOTT
---------------
Name: Dianne M. Scott
---------------
Title: Vice President and Manager
--------------------------
ROYAL BANK OF CANADA,
as Initial Lender
By: JOHN LUSTGARTEN
---------------
Name: John Lustgarten
---------------
Title: Manager
---------------
UNION BANK OF CALIFORNIA, N.A.,
as Initial Lender
By: ANN M. YASUDA
-------------
Name: Ann M. Yasuda
-------------
Title: Vice President
--------------
U.S. BANK NATIONAL ASSOCIATION,
as Initial Lender
By: JANET JORDAN
------------
Name: Janet Jordan
------------
Title: Vice President
--------------
<PAGE> BANK ONE, TEXAS, N.A.,
as Initial Lender
By: WYATT DICKSON
-------------
Name: Wyatt Dickson
-------------
Title: Assistant Vice President
------------------------
CIBC INC.,
as Initial Lender
By: CHRISTOPHER KLECZKOWSKI
-----------------------
Name: Christopher Kleczkowski
-----------------------
Title: Executive Director
-----------------------
CIBC Oppenheimer Corp., AS AGENT
THE FUJI BANK, LTD.,
LOS ANGELES AGENCY,
as Initial Lender
By: MASAHITO FUKUDA
---------------
Name: Masahito Fukuda
---------------
Title: Joint General Manager
---------------------
SANWA BANK CALIFORNIA,
as Initial Lender
By: LARRY D. HART
-------------
Name: Larry D. Hart
-------------
Title: Vice President
--------------
NATEXIS BANQUE - BFCE,
as Initial Lender
By: IAIN A. WHYTE
-------------
Name: Iain A. Whyte
-------------
Title: Vice President
--------------
JOAN M. FARRELL
---------------
Joan M. Farrell
---------------
Assistant Vice President
------------------------
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
FISCAL YEAR THRU SECOND QUARTER CONTAINS 28 WEEKS
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-27-1998
<PERIOD-START> SEP-29-1997
<PERIOD-END> APR-12-1998
<CASH> 81,590
<SECURITIES> 0
<RECEIVABLES> 9,943
<ALLOWANCES> 3,043
<INVENTORY> 18,974
<CURRENT-ASSETS> 157,195
<PP&E> 683,293
<DEPRECIATION> 216,286
<TOTAL-ASSETS> 750,471
<CURRENT-LIABILITIES> 208,610
<BONDS> 346,524
<COMMON> 407
0
0
<OTHER-SE> 134,660
<TOTAL-LIABILITY-AND-EQUITY> 750,471
<SALES> 587,157
<TOTAL-REVENUES> 653,683
<CGS> 199,205
<TOTAL-COSTS> 514,053
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 19,206
<INCOME-PRETAX> 67,621
<INCOME-TAX> 21,600
<INCOME-CONTINUING> 46,021
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 46,021
<EPS-PRIMARY> 1.17
<EPS-DILUTED> 1.14
</TABLE>
