=================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
(Mark One)
X Quarterly report pursuant to Section 13 or 15(d) of the
- Securities Exchange Act of 1934 for the quarterly period
ended June 30, 1995.
_ Transition report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 for the transition
period from _____________ to _______________.
Commission File Number 0-15782
SHOWBIZ PIZZA TIME, INC.
(Exact name of registrant as specified in its charter)
Kansas 48-0905805
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
P.O. Box 152077
4441 West Airport Freeway
Irving, Texas 75015
(Address of principal executive offices,
including zip code)
(214) 258-8507
(Registrant's telephone number,
including area code)
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
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 _ No _
At June 30, 1995, an aggregate of 12,215,177 shares of the
registrant's Common Stock, par value of $.10 each (being the
registrant's only class of common stock), were outstanding.
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
ShowBiz Pizza Time, Inc.:
Page
----
Consolidated balance sheets as of June 30, 1995
(unaudited) and December 30, 1994 .................. 2
Consolidated statements of earnings for the three
months ended June 30, 1995
and July 1, 1994 (unaudited)........................ 3
Consolidated statements of earnings for the
six months ended June 30, 1995
and July 1, 1994 (unaudited)........................ 4
Consolidated statement of shareholders' equity
for the six months ended
June 30, 1995 (unaudited)........................... 5
Consolidated statements of cash flows for the six
months ended June 30, 1995
and July 1, 1994 (unaudited)........................ 6
Notes to consolidated financial statements............. 7
<PAGE> 1
SHOWBIZ PIZZA TIME, INC.
CONSOLIDATED BALANCE SHEETS
JUNE 30, 1995 AND DECEMBER 30, 1994
(Thousands, except share data)
ASSETS
<TABLE>
June 30, December 30,
1995 1994
-------- -----------
(unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents . . . . . . . . . . . $ 4,733 $ 2,381
Accounts receivable, including receivables
from related parties of $311 and $416,
respectively . . . . . . . . . . . . . . . . 2,985 3,361
Current portion of notes receivable,
including receivables from
related parties of $364 and
$300, respectively . . . . . . . . . . . . . 792 529
Inventories . . . . . . . . . . . . . . . . . . 3,274 3,107
Prepaid expenses. . . . . . . . . . . . . . . . 3,029 2,900
Current portion of
deferred tax asset . . . . . . . . . . . . . 1,084 3,583
------- -------
Total current assets. . . . . . . . . . . 15,897 15,861
------- -------
Investments in related parties. . . . . . . . . . 778 699
------- -------
Property and equipment . . . . . . . . . . . . . 131,408 130,190
------- -------
Deferred tax asset. . . . . . . . . . . . . . . . 31,168 29,414
------- -------
Other assets:
Notes receivable, less current portion,
including receivables from related
parties of $2,358 and
$1,708, respectively . . . . . . . . . . . . 7,272 6,705
Deferred charges,
less amortization . . . . . . . . . . . . . 2,787 2,083
Other. . . . . . . . . . . . . . . . . . . . . 3,406 3,356
-------- --------
13,465 12,144
-------- --------
$ 192,716 $ 188,308
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt. . . . . . . $ 77 $ 10,060
Accounts payable and accrued liabilities . . . 29,538 26,545
-------- --------
Total current liabilities. . . . . . . . 29,615 36,605
------- --------
Long-term debt, less current
portion . . . . . . . . . . . . . . . . . . . . . 29,102 19,947
------- -------
Deferred credits. . . . . . . . . . . . . . . . . . 3,284 3,025
------- -------
Other liabilities . . . . . . . . . . . . . . . . . 1,411 1,314
------- -------
Redeemable preferred stock, $60 par value,
redeemable for $2,974 in 2005. . . . . . . . . . . 1,953 1,902
------ -------
Shareholders' equity:
Common stock, $.10 par value; authorized
30,000,000 shares; 14,287,961 and
14,337,235 shares issued,
respectively . . . . . . . . . . . . . . . . . 1,429 1,434
Capital in excess of par value . . . . . . . . . 154,512 156,532
Retained earnings . . . . . . . . . . . . . . . 6,226 5,012
Deferred compensation. . . . . . . . . . . . . . (4,553) (7,200)
Less treasury shares of 2,072,784
at both dates, at cost . . . . . . . . . . . . (30,263) (30,263)
------- -------
127,351 125,515
------- -------
$ 192,716 $ 188,308
======= ========
</TABLE>
See notes to consolidated financial statements.
<PAGE> 2
SHOWBIZ PIZZA TIME, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
(Thousands, except per share data)
Three Months Three Months
Ended Ended
June 30, 1995 July 1, 1994
-------------- -------------
<TABLE>
<S> <C> <C>
Food and beverage revenues. . . . . . . . . . . $ 42,862 $ 45,421
Games and merchandise revenues. . . . . . . . . 18,773 17,487
Franchise fees and royalties. . . . . . . . . . 807 1,087
Joint venture income (loss) . . . . . . . . . . (6) 24
-------- -------
62,436 64,019
-------- -------
Costs and expenses:
Costs of sales . . . . . . . . . . . . . . . 33,553 33,161
Selling, general and administrative
expenses, including related party expenses
of $32 in both periods . . . . . . . . . . 11,163 12,225
Depreciation and amortization. . . . . . . . 5,487 6,148
(Gain) loss on property
transactions. . . . . . . . . . . . . . . 110 (3,504)
Other operating expenses . . . . . . . . . . 13,553 13,460
------- -------
63,866 61,490
------- -------
Operating income (loss) . . . . . . . . . . . . (1,430) 2,529
------- -------
Other income (expenses):
Interest income, including related
party income of $48 and $52,
respectively . . . . . . . . . . . . . . . 207 156
Interest expense . . . . . . . . . . . . . . (740) (430)
------- -------
(533) (274)
------- -------
Income (loss) before income taxes . . . . . . . . (1,963) 2,255
------- -------
Income taxes:
Current expense . . . . . . . . . . . . . . . . 137 198
Deferred (benefit) expense. . . . . . . . . . . (920) 809
------- -------
(783) 1,007
------- -------
Net income (loss) . . . . . . . . . . . . . . . . $ (1,180) $ 1,248
======= =======
Earnings per common and common equivalent share:
Primary:
Net income (loss). . . . . . . . . . . . . . . $ (.10) $ .10
======= =======
Weighted average shares outstanding. . . . . . 12,079 11,989
======= =======
Fully diluted:
Net income (loss) . . . . . . . . . . . . . . $ (.10) $ .10
======= =======
Weighted average shares outstanding. . . . . . 12,091 11,989
======= =======
</TABLE>
See notes to consolidated financial statements.
<PAGE> 3
SHOWBIZ PIZZA TIME, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
(Thousands, except per share data)
<TABLE>
Six Months Six Months
Ended Ended
June 30, 1995 July 1, 1994
-------------- ------------
<S> <C> <C>
Food and beverage revenues. . . . . . . . . . . $ 92,728 $ 100,567
Games and merchandise revenues 40,323 37,391
Franchise fees and royalties. . . . . . . . . . 1,853 2,320
Joint venture income. . . . . . . . . . . . . . 54 111
------- -------
134,958 140,389
------- -------
Costs and expenses:
Costs of sales. . . . . . . . . . . . . . . . 70,954 71,154
Selling, general and administrative
expenses, including related party expenses
of $63 in both periods. . . . . . . . . . . . 22,460 24,315
Depreciation and amortization . . . . . . . . . 10,851 12,432
(Gain) loss on property
transactions. . . . . . . . . . . . . . . . . 39 (3,494)
Other operating expenses. . . . . . . . . . . . 27,334 27,709
------- -------
131,638 132,116
------- -------
Operating income . . . . . . . . . . . . . . . . 3,320 8,273
------- -------
Other income (expenses):
Interest income, including related
party income of $97 and $99,
respectively . . . . . . . . . . . . . . . . 436 255
Interest expense . . . . . . . . . . . . . . . (1,453) (792)
------- -------
(1,017) (537)
------- -------
Income before income taxes . . . . . . . . . . . 2,303 7,736
------- -------
Income taxes:
Current expense . . . . . . . . . . . . . . . . 525 696
Deferred expense. . . . . . . . . . . . . . . . 393 2,367
------- -------
918 3,063
------- -------
Net income. . . . . . . . . . . . . . . . . . . . $ 1,385 $ 4,673
======= =======
Earnings per common and common equivalent share:
Primary:
Net income . . . . . . . . . . . . . . . . . . $ .10 $ .37
======= =======
Weighted average shares
outstanding . . . . . . . . . . . . . . . . . 12,094 12,280
======= ========
Fully diluted:
Net income . . . . . . . . . . . . . . . . . . $ .10 $ .37
======= ========
Weighted average shares
outstanding. . . . . . . . . . . . . . . . . 12,112 12,280
======= =======
</TABLE>
See notes to consolidated financial statements.
<PAGE> 4
SHOWBIZ PIZZA TIME, INC.
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
(Unaudited)
(Thousands, except per share data)
<TABLE>
Common Capital in Deferred Treasury
Stock Excess of Retained Compen- Stock
Shares Par Value Par Value Earnings sation Shares Cost
-------- ---------- ---------- -------- ------- ------ -----
<S> <C> <C> <C> <C> <C> <C> <C>
Balances,
December
30, 1994....14,337 $1,434 $156,532 $5,012 $(7,200) 2,073 $(30,263)
Net income.. 1,385
Redeemable preferred
stock accretion....... (52)
Redeemable preferred
stock dividends,
$2.40 per share....... (119)
Stock options
exercised....11 1 68
Tax expense from the
exercise of stock
options and stock
grants.............. (351)
Stock grants
forfeited..(60) (6) (1,737) 1,737
Amortization of
deferred 910
compensation----- ------ -------- ------- ------- ------ ------
Balances,
June 30,
1995..... 14,288 $1,429 $154,512 $6,226 $(4,553) 2,073 $(30,263)
====== ====== ======== ====== ======= ===== =======
</TABLE>
See notes to consolidated financial statements.
<PAGE> 5
SHOWBIZ PIZZA TIME, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Thousands)
<TABLE>
Six Months Six Months
Ended Ended
June 30, 1995 July 1, 1994
------------- ------------
<S> <C> <C>
Operating activities:
Net income ................................ $ 1,385 $ 4,673
Adjustments to reconcile net income to
cash provided by operations:
Depreciation and amortization............. 10,851 12,432
Deferred tax expense...................... 393 2,367
(Gain) loss on property transactions...... 39 (3,494)
Compensation expense under
stock grant plan........................ 910 1,367
Other..................................... 260 347
Net change in receivables, inventory,
prepaids, payables and
accrued liabilities..................... 3,075 617
------ -------
Cash provided by operations........... 16,913 18,309
------ -------
Investing activities:
Purchases of property and equipment...... (11,866) (15,365)
Proceeds from disposition of
property and equipment................. 6,725
Additions to notes receivable............ (2,046) (1,109)
Payments received on notes receivable.... 1,215 1,476
Change in investments, deferred
charges and other assets............... (1,064) (1,097)
------- -------
Cash used in investing activities..... (13,761) (9,370)
------- -------
Financing activities:
Payments on line of credit............... (29,200) (4,360)
Proceeds from debt and line of credit.... 28,400 7,910
Reduction of capital lease obligations .. (28) (21)
Exercise of stock options................ 69 238
Treasury stock acquired.................. (13,513)
Redeemable preferred stock dividends..... (119) (119)
Other.................................... 78 13
------- -------
Cash used in financing activities..... (800) (9,852)
------- -------
Increase (decrease) in cash
and cash equivalents .................... 2,352 (913)
Cash and cash equivalents,
beginning of period...................... 2,381 4,511
------- -------
Cash and cash equivalents,
end of period............................ $ 4,733 $ 3,598
======== ========
</TABLE>
See notes to consolidated financial statements.
<PAGE> 6
SHOWBIZ PIZZA TIME, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 1995 AND JULY 1, 1994
(Unaudited)
1. Interim financial statements:
In the opinion of management, the accompanying financial statements for the
periods ended June 30, 1995 and July 1, 1994 reflect all adjustments
(consisting only of normal recurring adjustments except as referred to in
Note 5) necessary to present fairly the Company's financial condition,
results of operations and cash flows.
Certain information and footnote disclosures normally included in the
consolidated financial statements prepared in accordance with generally
accepted accounting principles have been omitted. The unaudited consolidated
financial statements referred to above should be read in conjunction with the
financial statements and notes thereto included in the Company's Form 10-K
filed with the Securities and Exchange Commission for the year ended December
30, 1994. Results of operations for the periods ended June 30, 1995 and July
1, 1994 are not necessarily indicative of the results for the year.
2. Earnings per common and common equivalent share:
Earnings per common and common equivalent share were computed based on
the weighted average number of common and common equivalent shares outstanding
during the period. Net income available per common share has been adjusted for
the items indicated below, and earnings per common and common equivalent
share were computed as follows (thousands, except per share data):
<TABLE>
Three Months Ended Six Months Ended
June 30, July 1, June 30, July 1,
1995 1994 1995 1994
------- ------- ------- -------
<S> <C> <C> <C> <C>
Net income (loss)............. $ (1,180) $ 1,248 $ 1,385 $ 4,673
Accretion of redeemable
preferred stock............. (27) (26) (52) (51)
Redeemable preferred
stock dividends............. (59) (59) (119) (119)
------- ------- ------- -------
Adjusted income (loss)
applicable to common and
common equivalent shares.... $ (1,266) $ 1,163 $ 1,214 $ 4,503
======== ======== ======== =======
Primary:
Weighted average number
of common shares
outstanding.............. 12,026 11,887 12,056 12,169
Common stock equivalents:
Stock purchase options... 53 102 38 111
------- ------- ------- -------
Weighted average number
of shares outstanding...... 12,079 11,989 12,094 12,280
======= ======= ======= =======
Earnings (loss) per
common and common
equivalent share.......... $ (.10) $ .10 $ .10 $ .37
======= ======= ======= =======
Fully diluted:
Weighted average number
of common shares
outstanding............... 12,026 11,887 12,056 12,169
Common stock equivalents:
Stock purchase options... 65 102 56 111
------ ------ ------- ------
Weighted average number of shares
outstanding.............. 12,091 11,989 12,112 12,280
====== ====== ====== ======
Earnings (loss) per common
and common equivalent
share....................$ (.10) $ .10 $ .10 $ .37
======= ======= ======= ======
</TABLE>
<PAGE> 7
SHOWBIZ PIZZA TIME, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 1995 AND JULY 1, 1994
(Unaudited)
3. Income taxes:
Income taxes have been provided at the expected annual federal tax rate
during the year (35% for 1995) plus an estimated provision for state income
taxes and state franchise taxes.
4. Supplemental cash flow information:
<TABLE>
Six Months Six Months
Ended Ended
June 30, 1995 July 1, 1994
------------- ------------
<S> <C> <C>
Cash paid during the year for:
Interest . . . . . . . . . . . . . . . . . $ 1,433 $ 736
Income taxes . . . . . . . . . . . . . . . 353 1,053
Supplemental schedule of noncash
investing and financing activities:
Notes received in connection
with the disposition of
property and equipment . . . . . . . . . . . 4,650
Investment received in connection
with the disposition of property
and equipment. . . . . . . . . . . . . . . . . 438
</TABLE>
5. Significant transactions:
During the second quarter of 1995, the Company refinanced its previous credit
facility of $30.8 million expiring January 1996 with an increased facility of
$33 million. The new credit facility consists of certain term notes
totalling $18 million with annual interest of 10.02% maturing in 2001, and
certain term notes totalling $10 million with annual interest equal to the
London Interbank Offered Rate ("LIBOR") plus 3.5% maturing in 2000. In
addition, the Company has a $5 million line of credit with annual interest
provided at prime plus 1/2 %, or at the Company's option, LIBOR plus 3% and
matures June 1997. No amount is outstanding under the line of credit at June
30, 1995. The Company is required to comply with certain ratio tests during
the terms of the loan agreements.
During the first quarter of 1995, the Company changed its estimate of the
useful lives of certain fixed assets as follows:
<TABLE>
Previous New
Lives Lives
--------- -------
<S> <C> <C>
Land and improvements. . . . . . . . . . . . 0-10 0-20
Leasehold improvements . . . . . . . . . . . 4-15 4-20
Buildings and improvements . . . . . . . . . 4-25 4-25
Furniture, fixtures
and improvements. . . . . . . . . . . . . 2-10 2-15
Property based under capital leases. . . . . 10-15 10-15
</TABLE>
<PAGE> 8
SHOWBIZ PIZZA TIME, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 1995 AND JULY 1, 1994
(Unaudited)
5. Significant transactions (cont.):
As a result of this change, income before income taxes
increased $576,000, net income was increased $346,000 and earnings
per share increased $.03 in the second quarter of 1995. In the
first six months of 1995, income before income taxes increased
approximately $1.1 million, net income increased $685,000 and
earnings per share increased $.05.
During the first quarter of 1995, the Company's Chairman of the
Board and Chief Executive Officer forfeited 60,000 shares of
unvested common stock of the Company previously awarded to him
under the Company's stock grant plan. As a result of this
forfeiture, deferred compensation and capital in excess of par
value were reduced by approximately $1.7 million. Amortization of
the remaining deferred compensation is provided by the straight-
line method over the remaining term of the employment agreement.
<PAGE> 9
Item 2: Management's Discussion and Analysis of Financial
Condition and Results of Operations
Results of Operations
Second Quarter 1995 Compared to Second Quarter 1994
---------------------------------------------------
Revenues for the second quarter of 1995 decreased 2.5% to $62.4
million from $64.0 million in the second quarter of 1994 primarily
due to the sale of the Company's Monterey's Tex-Mex Cafe
restaurants effective May 5, 1994. Revenues from the Company's
Monterey's Tex-Mex Cafe restaurants were $1.5 million in the second
quarter of 1994. Revenue generated by the Company's Chuck E.
Cheese's restaurants declined slightly to $62.4 million in the
second quarter of 1995 from $62.5 million in 1994 due to a decline
in comparable store sales of 2.4% between the periods.
The Company incurred an operating loss of $1.4 million in the
second quarter of 1995 compared to operating income of $2.5 million
in the second quarter of 1994. Included in operating income in
1994 is a gain of $5.5 million related to the sale of the Company's
Monterey's Tex-Mex Cafe restaurants and a $1.9 million loss
associated with the valuation of fixed assets used in certain Chuck
E. Cheese's restaurants. The decline in comparable store sales and
operating margins in the Company's Chuck E. Cheese's restaurants
also contributed to the decline in operating income. A material
portion of operating costs are fixed resulting in an erosion of
operating margins at lower sales levels.
A summary of the results of operations of the Company as a
percentage of revenues for the two quarters is shown below.
<TABLE>
Three Months Ended
June 30, 1995 July 1, 1994
------------ ------------
<S> <C> <C>
Revenue . . . . . . . . . . . . . . . . . 100.0% 100.0%
------- -------
Costs and expenses:
Cost of sales . . . . . . . . . . . . . 53.7 51.8
Selling, general
and administrative. . . . . . . . . . 17.9 19.1
Depreciation and amortization 8.8 9.6
(Gain) loss on property
transactions. . . . . . . . . . . . . .2 (5.5)
Other operating expenses 21.7 21.0
------- -------
102.3 96.0
------- -------
Operating income (loss) . . . . . . . . . (2.3)% 4.0%
======= =======
</TABLE>
Revenues
--------
Revenues from the Company's Chuck E. Cheese's restaurants
declined to $62.4 million in the second quarter of 1995 from $62.5
million in the second quarter of 1994 primarily due to a decline of
2.4% in comparable store sales of such restaurants which were
opened during all of the second quarters of both 1995 and 1994.
The Company opened one new restaurant in the first quarter of 1995
and 12 new restaurants throughout 1994. Management believes that
several factors may have contributed to the comparable store sales
decline including increased competition and to a lesser extent,
the impact of newly opened Company restaurants on comparable store
sales of existing restaurants in certain markets. Menu prices
were comparable between the two periods.
Costs and Expenses
------------------
Costs and expenses as a percentage of revenues increased to
102.3% in the second quarter of 1995 from 96.0% in the second
quarter of 1994.
<PAGE> 10
Cost of sales increased as a percentage of revenues to 53.7% in
the second quarter of 1995 from 51.8% in the comparable period of
1994. Cost of food, beverage, prize and merchandise items for
Chuck E. Cheese's restaurants as a percentage of restaurant sales
decreased to 18.4% in the second quarter of 1995 from 18.5% in the
second quarter of 1994 primarily due to an increase in game sales
as a percentage of total restaurant sales. Labor expenses for
Chuck E. Cheese's restaurants as a percentage of restaurant sales
increased to 32.1% during the second quarter of 1995 from 30.3% in
the second quarter of 1994 primarily due to increased labor rates,
reduced management turnover and the decline in the comparable store
sales.
Selling, general and administrative expenses as a percentage of
revenues decreased to 17.9% in the second quarter of 1995 from
19.1% in the comparable period of 1994 primarily due to a decline
in corporate overhead costs.
Depreciation and amortization expenses as a percentage of
revenues decreased to 8.8% in the second quarter of 1995 from 9.6%
in the second quarter of 1994. Preopening expense declined due to
the write-off of all unamortized preopening expense in the fourth
quarter of 1994 resulting from a change in the estimated future
benefit of such expenses. Depreciation expense declined due to the
sale of Monterey's Tex-Mex Cafe restaurants in May 1994 and a
change effected in the first quarter of 1995 in the estimated
useful lives of certain fixed assets based on a review of
historical asset utilization. As a result of this change,
depreciation expense decreased approximately $576,000 in the second
quarter of 1995.
Other operating expenses increased as a percentage of revenues
to 21.7% in the second quarter of 1995 from 21.0% in the second
quarter of 1994 primarily due to increased rent costs as a
percentage of revenues and the decline in comparable store sales.
The Company had a loss on property transactions of $110,000 in
the second quarter of 1995 compared to a net gain on property
transactions of $3.5 million in the second quarter of 1994. In the
second quarter of 1994, the Company recognized a gain of $5.5
million from the sale of substantially all of the assets of its
Monterey's Tex-Mex Cafe restaurants on May 5, 1994. The gain was
partially offset by a loss of approximately $1.9 million in the
second quarter of 1994. The loss was a result of the Company's
decision to close one Chuck E. Cheese's restaurant and the decline
in fair value of the fixed assets of eight Chuck E. Cheese's
restaurants due to the Company's decision not to renew the leases
as a result of the deterioration of site characteristics. The
Company will consider possible relocation of some of the
restaurants. The Company provided for a loss on property
transactions of approximately $110,000 in the second quarter of
1995 compared to a loss of $100,000 in the second quarter of 1994
due to the replacement of certain assets in conjunction with the
enhancement of facilities and entertainment packages of
restaurants.
Operating Income (Loss)
-----------------------
As a result of the changes in revenues and expenses discussed
above, the Company had an operating loss of $1.4 million in the
second quarter of 1995 compared to operating income of $2.5 million
in the second quarter of 1994. Included in operating income are the
operations of Monterey's Tex-Mex Cafe restaurants through May 5,
1994. Operating income in the second quarter of 1994 for
Monterey's Tex-Mex Cafe restaurants was $5.6 million, including a
gain on property transactions of $5.5 million.
Net Income (Loss)
-----------------
Interest expense increased to $740,000 in the second quarter of
1995 from $430,000 in the second quarter of 1994 due primarily to
an increase in interest rates and the Company's average outstanding
debt since the second quarter of 1994. The Company had a net loss
of $1.2 million in the second quarter of 1995 compared to net
income of $1.2 million in the second quarter of 1994 due to the
changes in revenues and expenses discussed above. The Company's
primary and fully diluted loss per share was $.10 per share in the
second quarter of 1995 compared to earnings per share of $.10 per
share in the second quarter of 1994.
<PAGE> 11
First Six Months of 1995 Compared to First Six Months of 1994
--------------------------------------------------------------
Revenues decreased 3.9% to $135.0 million in the first six
months of 1995 from $140.4 million in the comparable period of
1994. Revenues generated by the Company's Chuck E. Cheese's
restaurants increased to $135.0 million in the first six months of
1995 from $134.2 million in the first six months of 1994 due to the
net addition of one Company restaurant in the first six months of
1995 and 12 new restaurants in 1994. Comparable store sales from
the Company's Chuck E. Cheese's restaurants declined 2.8% between
the periods. Revenues from the Company's Monterey's Tex-Mex Cafe
restaurants were $6.2 million in the first six months of 1994.
Operating income decreased to $3.3 million in the first six
months of 1995 from $8.3 million in the first six months of 1994.
Included in operating income in 1994 is a gain of $5.5 million
related to the sale of the Company's Monterey's Tex-Mex Cafe
restaurants and a $1.9 million loss associated with the valuation
of fixed assets used in certain Chuck E. Cheese's restaurants. The
decline in comparable store sales and operating margins in the
Company's Chuck E. Cheese's restaurants also contributed to the
decline in operating income. A material portion of operating costs
are fixed resulting in an erosion of operating margins at lower
sales levels.
A summary of the results of operations of the Company as a
percentage of revenues for the six month periods is shown below.
<TABLE>
Six Months Ended
---------------------------------
June 30, 1995 July 1, 1994
------------- ------------
<S> <C> <C>
Revenue . . . . . . . . . . . . 100.0% 100.0%
------- -------
Costs and expenses:
Cost of sales . . . . . . . . 52.6 50.7
Selling, general and
administrative . . . . . . 16.6 17.3
Depreciation and
amortization . . . . . . . 8.0 8.9
(Gain) loss on property
transactions. . . . . . . . . (2.5)
Other operating expenses . . . 20.3 19.7
------- -------
97.5 94.1
-------- -------
Operating income. . . . . . . . . 2.5% 5.9%
======== =======
</TABLE>
Revenues
--------
Revenues from the Company's Chuck E. Cheese's restaurants
increased to $135.0 million in the first six months of 1995 from
$134.2 million in the first six months of 1994 primarily due to new
restaurant development which occurred throughout 1994 and January
1995. Comparable store sales of such restaurants which were open
during all of the first six months of both 1995 and 1994 declined
by 2.8% between the two periods. Management believes that several
factors may have contributed to the comparable store sales decline
including increased competition and to a lesser extent, the impact
of newly opened restaurants on comparable store sales of existing
restaurants in certain markets. Menu prices were comparable between
the two periods.
Costs and Expenses
------------------
Costs and expenses as a percentage of revenues increased to
97.5% in the first six months of 1995 from 94.1% in the first six
months of 1994.
<PAGE> 12
Cost of sales increased as a percentage of revenues to 52.6% in
the first six months of 1995 from 50.7% in the comparable period of
1994. Cost of food, beverage, prize and merchandise items for
Chuck E. Cheese's restaurants as a percentage of restaurant sales
decreased to 18.2% in the first six months of 1995 from 18.3% in
the first six months of 1994 primarily due to an increase in game
sales as a percentage of total restaurant sales. Labor expenses
for Chuck E. Cheese's restaurants as a percentage of restaurant
sales increased to 31.2% during the first six months of 1995 from
29.1% in the first six months of 1994 primarily due to increased
labor rates, reduced management turnover and the decline in the
comparable store sales.
Selling, general and administrative expenses as a percentage of
revenues decreased to 16.6% in the first six months of 1995 from
17.3% in the comparable period of 1994 primarily due to a reduction
in corporate overhead expenses.
Depreciation and amortization expenses as a percentage of
revenues decreased to 8.0% in the first six months of 1995 from
8.9% in the comparable period of 1994. Preopening expense declined
due to the write-off of all unamortized preopening expense in the
fourth quarter of 1994 resulting from a change in the estimated
future benefit of such expenses. Depreciation expense declined due
to the sale of Monterey's Tex-Mex Cafe restaurants in May 1994 and
a change effected in the first quarter of 1995 in the estimated
useful lives of certain fixed assets based on a review of
historical asset utilization. As a result of this change,
depreciation expense decreased approximately $1.1 million in the
first six months of 1995.
Other operating expenses increased as a percentage of revenues
to 20.3% in the first six months of 1995 from 19.7% in the first
six months of 1994 primarily due to increased rent as a percentage
of revenues and the decline in comparable store sales. This was
slightly offset by a decrease in insurance costs as a percentage of
revenues between the periods.
The Company had a net loss on property transactions of $39,000
in the first six months of 1995 compared to a net gain on property
transactions of $3.5 million in the first six months of 1994. In
the first six months of 1994, the Company recognized a gain of $5.5
million from the sale of substantially all of the assets of its
Monterey's Tex-Mex Cafe restaurants on May 5, 1994. The gain was
partially offset by a loss of approximately $1.9 million in the
first six months of 1994. The loss was a result of the Company's
decision to close one Chuck E. Cheese's restaurant and the decline
in fair value of the fixed assets of eight Chuck E. Cheese's
restaurants due to the Company's decision not to renew the leases
as a result of the deterioration of site characteristics. The
Company will consider possible relocation of some of the
restaurants. The Company provided for a loss on property
transactions of approximately $139,000 in the first six months of
1995 compared to a loss of $100,000 in the first six months of 1994
due to the replacement of certain assets in conjunction with the
enhancement of facilities and entertainment packages of
restaurants. In the first six months of 1995, the Company
recognized a gain of $100,000 related to the sale of assets held
for resale.
Operating Income
----------------
As a result of the changes in revenues and expenses discussed
above, operating income declined to $3.3 million in the first six
months of 1995 from $8.3 million in the first six months of 1994.
Included in operating income are the operations of Monterey's Tex-
Mex Cafe restaurants through May 5, 1994. Operating income in the
first six months of 1994 for Monterey's Tex-Mex Cafe restaurants
was $5.9 million, including a gain on property transactions of $5.5
million.
Net Income
----------
Interest expense increased to $1.5 million in the first six
months of 1995 from $792,000 in the first six months of 1994 due
primarily to an increase in interest rates and the Company's
average outstanding debt between the periods. The Company's net
income decreased to $1.4 million in the first six months of 1995
from $4.7 million in the first six months of 1994 due to the
changes in revenues and expenses discussed above. The Company's
primary and fully diluted earnings per share decreased to $.10 per
share in the first six months of 1995 from $.37 per share in the
first six months of 1994.
<PAGE> 13
Financial Condition, Liquidity and Capital Resources
Cash provided by operations decreased to $16.9 million in the
first six months of 1995 from $18.3 million in the comparable
period of 1994. Cash outflows from investing and financing
activities for the first six months of 1995 were $13.8 million and
$800,000, respectively. The Company's primary requirements for
cash relate to planned capital expenditures and debt service. The
Company expects that it will satisfy such requirements from cash
provided by operations and funds available under its line of credit
or additional borrowings.
In June 1995, the Company refinanced its previous credit
facility of $30.8 million expiring in January 1996 with an
increased facility of $33 million. The new credit facility
consists of certain term notes totalling $18 million with
annual interest of 10.02% maturing in 2001 and certain term
notes totalling $10 million with annual interest equal to the London
Interbank Offered Rate ("LIBOR") plus 3.5% maturing in 2000.
In addition, the Company has obtained a $5 million line of credit
due June 1997 with interest provided at prime plus 1/2%, or at the
Company's option, LIBOR plus 3%. The Company is currently in
negotiations for additional borrowings between $5 and $7 million.
The Company is required to comply with certain financial ratio
tests during the terms of the loan agreements.
The Company believes that the success of its facility and
entertainment enhancement program in addition to new restaurant
development will continue to be significant factors in its ability
to generate increased revenues over the foreseeable future.
The Company continues to evolve and expand its efforts to
significantly enhance its Chuck E. Cheese's locations.
This "repositioning" program is being carried out on a market by
market basis and involves: an improved exterior identity, a
facility upgrade, an expanded free ball-crawl with tubes and
tunnels suspended from or reaching to the ceiling, and an
enhancement of the variety and number of games and rides offered to
its guests. The Company completed 21 restaurants under this
program in 1994 and has currently completed an additional 27
restaurants during 1995. The average sales growth in these
restaurants during the periods following their repositioning
compared to the same periods of the prior year has increased
approximately 20% after giving effect to average sales trends
experienced during the three month periods prior to their
repositioning. The Company currently intends to reposition
substantially all of the Company restaurants by the end of 1996.
The Company anticipates that the repositioning of the remaining
restaurants will cost on the average approximately $300,000 per
restaurant. However, this amount can vary significantly at a
particular restaurant depending on several factors, including
the restaurant's square footage, date of the most recent remodel
and the existing assets at the restaurant. In the event certain
site characteristics considered essential to the success of a
restaurant deteriorate, the Company will consider closing the
restaurant or relocating the restaurant to a more desirable site.
The Company is implementing several strategies designed to
strengthen the sales vitality of its existing unit base in what
management believes is a competitive market. The Company is
refining its marketing plan; the Company has accelerated its
commitment of capital to existing stores; and the Company is
currently limiting its 1995 new restaurant development to ensure
that the sales vitality of the Company's existing restaurant base
is given immediate priority. The Company believes that certain
operating costs could increase as a result of implementing its
strategies designed to strengthen existing unit sales. If the
declines in comparable store sales of the Company's Chuck E.
Cheese's restaurants experienced since 1992 continue to be
experienced over a longer term, an adverse impact on the Company's
operating margins and results of operations could continue.
The Company is involved in a number of lawsuits. The Company
presently believes that it will continue to incur expense to defend
against and resolve such litigation, and anticipates that it will
satisfy such expense with cash flow from operations. (Refer to
Item 1. Legal Proceedings).
<PAGE> 14
The Company believes it will realize substantial benefit from
utilization of approximately $73 million in net operating loss
carryforwards to reduce its federal income tax liability. Such net
operating loss carryforwards expire from years 1999 through 2002.
Although the use of such carryforwards could, under certain
circumstances, be limited, the Company is presently unaware of the
occurrence of any event which would result in the imposition of
such limitation. The Company has adopted an amendment to its
Restated Articles of Incorporation which is intended to prevent
changes in ownership of its common stock that would cause such
limitation. In addition, the Company has investment tax credit,
job tax credit and alternative minimum tax credit carryforwards of
approximately $7 million expiring from years 1997 through 2008.
Tax credit carryforwards can be utilized by the Company only after
all net operating loss carryforwards have been realized. If the
Company's results of operations continue to decline, a portion of
the net operating loss and tax credit carryforwards could expire
prior to utilization resulting in a charge against income. Taxable
income for the five years ending December 30, 1994 was $62 million.
Based on the early results of the repositioned restaurants and the
Company's current plans to reposition substantially all of its
Company owned restaurants by the end of 1996, the Company projects
future taxable income levels sufficient to realize its net
operating loss and tax credit carryforwards prior to their
expiration after considering an allowance of $1.1 million for the
estimated expiration of tax credit carryforwards in 1997.
<PAGE> 15
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
-----------------------------
In December 1991, the Company, The Hallwood Group Incorporated,
("Hallwood"), Integra-A Hotel and Restaurant Company ("Integra"),
and their individual directors were named defendants in two
separate but related lawsuits brought in the 14th and 134th
District Courts of Dallas County, Texas. In April 1993, the
Company and its two directors who are also employees of the
Company, were dismissed as defendants in the lawsuit brought in the
134th District Court by an Integra common stockholder. Integra
owned approximately 90% of the outstanding Common Stock of the
Company prior to Integra's distribution of such Common Stock in
December 1988 (the "1988 Distribution") to its shareholders of
record. The plaintiffs in the remaining lawsuit constituted
certain holders of warrants, options and preferred stock of Integra
who sought to serve as representatives of proposed classes of other
holders of such securities. The plaintiffs alleged that the
Company (i) violated Texas statutes related to securities fraud and
the fraudulent transfer of assets, (ii) committed common law fraud,
and (iii) breached fiduciary and other duties to the plaintiffs.
As amended, this suit sought recision of the 1988 distribution
actual damages in excess of $184 million, and punitive damages in
excess of $500 million. Although the Company believes that the
claims made against it in this suit were without merit, the Company
has settled the lawsuit. The Court on June 26, 1995 issued an
order for final judgement that approved the settlement of the suit
and dismissed it with prejudice.
In May 1994, Hermitage Hotel, Ltd., L. P., filed a lawsuit
against the Company, Hallwood and certain directors of the Company
in the 101st District Court of Dallas County, Texas. The lawsuit
sought recovery on behalf of plaintiff under theories of successor
liability, tortious interference with contract, fraud, negligent
representation and breach of contract. The plaintiff was seeking
approximately $10.2 million in actual damages, $30 million in
exemplary damages, attorneys' fees and court costs. Although, the
Company believes that the claims made against it were without merit,
the Company settled this suit and on June 28, 1995, the Court issued
an agreed order of dismissal, with prejudice.
In June 1993, the Company was named as a nominal defendant in a
shareholders' derivative action in the 68th Judicial District Court
in Dallas County, Texas in which three of the Company's executive
officers, four of the Company's outside directors and Hallwood were
named defendants. The plaintiffs in this lawsuit have alleged the
individual defendants (i) breached their fiduciary duties to
stockholders, (ii) committed constructive fraud and (iii) unjustly
enriched themselves as a result of alleged violations of federal
securities laws and illegal insider trading between July 13, 1992
and June 11, 1993. The Company has agreed in principle to the
settlement of this lawsuit subject to final documentation and court
approval.
In July 1993, the Company was named a defendant in a lawsuit
brought in the Circuit Court for Davidson County, Nashville,
Tennessee by Third National Bank in Nashville, as Trustee pursuant
to a municipal bond issuance of $6.4 million made in 1980, for
which Integra executed a guaranty. The plaintiff has alleged that
Integra's guaranty of the municipal bond issuance was binding on
successors of Integra and that the Company is the legal successor
to Integra. The plaintiff is seeking to recover a judgement
against the Company in the full amount of its claim against
Integra, which is unspecified, as well as attorneys' fees and
costs. In April 1994, the court dismissed the plaintiff's
complaint for failure to state a claim upon which relief can be
granted. Plaintiff has appealed the dismissal to the 6th Circuit
Court of Appeals, which affirmed the dismissal, by an order and
opinion dated June 27, 1995. The Company believes the allegations
made in this suit to be without merit and will offer a vigorous
defense in in any further appeal by the plaintiff.
<PAGE> 16
In January 1994, the Company was named a defendant in a lawsuit
brought in the Supreme Court of the State of New York, County of
Queens, by Big Six Towers, Inc., in its purported capacity as a
landlord to the Company with regard to a restaurant/entertainment
center location in Queens County, New York which the Company had
contracted to lease from the plaintiff. The plaintiff has alleged
that the Company has breached the lease and is seeking total
damages in excess of $4.0 million against the Company. The Company
believes it validly terminated the lease in question pursuant to an
agreement with the plaintiff and believes the allegations made in
this suit to be without merit and therefore intends to vigorously
defend this lawsuit.
Certain other pending legal proceedings exist against the
Company which the Company believes are not material in amount or
have arisen in the ordinary course of its business.
Item 2. Changes in Securities.
-------------------------------
None to report during quarter for which this report is filed.
Item 3. Defaults Upon Senior Securities.
-----------------------------------------
None to report during quarter for which this report is filed.
Item 4. Submission of Matters to a Vote of Security Holders.
-------------------------------------------------------------
On June 8, 1995, at the Company's annual meeting of
shareholders, the Company's shareholders re-elected Richard M.
Frank (7,163,648 shares in favor and 68,509 shares withheld) and
Anthony J. Gumbiner (7,163,647 shares in favor and 68,509 shares
withheld) as Class I Directors. The Company's shareholders also
allegedly elected Joshua S. Friedman (7,205,370 shares in favor and
5,184 shares withheld) as a Class I Director, replacing Michael H.
Magusiak (7,163,646 shares in favor and 68,509 shares withheld).
The outcome of the alleged election of Joshua S. Friedman has been
challenged in a lawsuit filed in a District Court located in
Jefferson County, Kansas. The claims raised in this lawsuit assert
that there were voting irregularities and inconsistent positions
taken by the inspectors of election regarding the counting of
proxies. Charles A. Crocco, Jr., Robert L. Lynch, Louis P. Neeb,
Cynthia I. Pharr, J. Thomas Talbot, and Brian M. Troup continue to
serve as Directors.
Also, on June 8, 1995, at the Company's annual meeting of
shareholders, the Company's shareholders approved an increase in
the number of shares available for grant under the 1988 Option Plan
from 1,348,025 to 1,848,025 (5,604,951 shares in favor, 2,897,772
shares against and 1,135,361 shares abstaining).
Finally, on June 8, 1995, at the Company's annual meeting of
shareholders, the Company's shareholders approved the adoption of
a Formula Stock Option Plan (6,625,052 shares in favor, 1,865,551
shares against and 1,147,481 shares abstaining). The Formula Stock
Option Plan provides for the granting of nonqualified stock options
to non-employee directors of the Company or its Affiliates (as defined
in the Formula Stock Option Plan).
<PAGE> 17
Item 5. Other Information.
---------------------------
None to report during quarter for which this report is filed.
Item 6. Exhibits and Reports on Form 8-K.
------------------------------------------
a) Exhibits
Number Description
------ ------------
3 -- Amendment to the Bylaws, dated May 5, 1995.
10 (a)(1) -- Note Purchase Agreement dated June 15, 1995,
between Allstate Life Insurance Company,
Connecticut Mutual Life Insurance Company,
C M Life Insurance Company, MassMutual
Corporate Value Partners Limited,
Massachusetts Mutual Life Insurance
Company, Modern Woodmen of America, and
the Company.
10 (b)(1) -- 10.02% Series A Senior Note Due 2001, in the
stated amount of $10,000,000.00, dated June
15, 1995, between Allstate Life Insurance
Company and the Company.
10 (c)(1) -- 10.02% Series A Senior Note Due 2001, in the
stated amount of $1,000,000.00, dated June
15, 1995, between Connecticut Mutual Life
Insurance Company and the Company.
10 (c)(2) -- 10.02% Series A Senior Note Due 2001, in the
stated amount of $1,000,000.00, dated June
15, 1995, between Connecticut Mutual Life
Insurance Company and the Company.
10 (c)(3) -- 10.02% Series A Senior Note Due 2001, in the
stated amount of $1,000,000.00, dated June
15, 1995, between Connecticut Mutual Life
Insurance Company and the Company.
10 (d)(1) -- 10.02% Series A Senior Note Due 2001, in the
stated amount of $1,000,000.00, dated June
15, 1995, between C M Life Insurance Company
and the Company.
10 (d)(2) -- 10.02% Series A Senior Note Due 2001, in the
stated amount of $1,000,000.00, dated June
15, 1995, between C M Life Insurance Company
and the Company.
10 (e)(1) -- Floating Rate Series B Senior Note
Due 2000, in the stated amount of
$2,000,000.00, dated June 15, 1995,
between Massachusetts Mutual Life
Insurance Company and the Company.
<PAGE> 18
10 (e)(2) -- Floating Rate Series B Senior Note Due
2000, in the stated amount of
$2,000,000.00, dated June 15, 1995,
between Massachusetts Mutual Life
Insurance Company and the Company.
10 (e)(3) -- Floating Rate Series B Senior Note Due 2000,
in the stated amount of $2,000,000.00,
dated June 15, 1995, between Massachusetts
Mutual Life Insurance Company and the
Company.
10 (f)(1) -- Floating Rate Series B Senior Note Due 2000,
in the stated amount of $4,000,000.00,
dated June 15, 1995, between MassMutual
Corporate Value Partners Limited (I/N/O
Webell & Co.) and the Company.
10 (g)(1) -- 10.02% Series A Senior Note Due 2001, in the
stated amount of $3,000,000.00, dated June
15, 1995, between Modern Woodmen of America
and the Company.
10 (h)(1) -- Loan Agreement in the stated amount of
$5,000,000.00, dated June 27, 1995, between
Bank One, Texas, N.A. and the Company.
10 (h)(2) -- Revolving Credit Note in the stated amount
of $5,000,000, dated June 27, 1995 between
Bank One, Texas, N.A. and the Company.
10 (i)(1) -- Non-statutory Stock Option Plan (filed as
Exhibit A to the Company's Proxy Statement
for Annual Meeting of Stockholders to be
held on June 8, 1995, and incorporated
herein by reference).
10 (j)(1) -- Non-Employee Directors Stock Option Plan
(filed as Exhibit B to the Company's Proxy
Statement for Annual Meeting of Stockholders
to be held on June 8, 1995, and incorporated
herein by reference).
b) Reports on Form 8-K
The Company filed a Form 8-K dated May 5, 1995, reporting that
its Board of Directors had adopted amendments to the Company's
Bylaws requiring that advance notice be given to the Company in
the event a stockholder desires to nominate a person for
election to the Board of Directors or to transact any other
business at an annual meeting of stockholders. Included in
such Form 8-K was the announcement that the Company's Board of
Directors determined to notify the recordholders of more than
4.75% of the Company's common stock that the Company intends to
enforce, prospectively, the existing provisions in its Restated
Articles of Incorporation generally restricting the transfer of
any shares of the Company's common stock to a holder of more
than 4.75 % of the value of the outstanding capital stock or
the transfer of shares of common stock which would result in
the intended transferee owning in excess of 4.75% of the value
of the outstanding capital stock.
<PAGE> 19
SIGNATURES
----------
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.
SHOWBIZ PIZZA TIME, INC.
Dated: August 9, 1995 By: Larry G. Page
Executive Vice President
and Chief Financial Officer
EXHIBIT INDEX
-------------
Exhibit
Number Description Page No.
------- ------------ ---------
3 Amendment to the Bylaws, dated May 5,
1995............................................... 23
10 (a)(1) -- Note Purchase Agreement dated June 15, 1995,
between Allstate Life Insurance Company,
Connecticut Mutual Life Insurance Company, C M
Life Insurance Company, MassMutual Corporate Value
Partners Limited, Massachusetts Mutual Life
Insurance Company, Modern Woodmen of America, and
the Company...........................................27
10 (b)(1) -- 10.02% Series A Senior Note Due 2001, in the
stated amount of $10,000,000.00, dated June 15,
1995, between Allstate Life Insurance Company and
the Company..........................................126
10 (c)(1) -- 10.02% Series A Senior Note Due 2001, in the
stated amount of $1,000,000.00, dated June 15,
1995, between Connecticut Mutual Life Insurance
Company and the Company..............................129
10 (c)(2) -- 10.02% Series A Senior Note Due 2001, in the
stated amount of $1,000,000.00, dated June 15,
1995, between Connecticut Mutual Life Insurance
Company and the Company............................. 132
10 (c)(3) -- 10.02% Series A Senior Note Due 2001, in the
stated amount of $1,000,000.00, dated June 15,
1995, between Connecticut Mutual Life Insurance
Company and the Company..............................135
10 (d)(1) -- 10.02% Series A Senior Note Due 2001, in the
stated amount of $1,000,000.00, dated June 15,
1995, between C M Life Insurance Company and the
Company..............................................138
10 (d)(2) -- 10.02% Series A Senior Note Due 2001, in the
stated amount of $1,000,000.00, dated June 15,
1995, between C M Life Insurance Company and the
Company..............................................141
10 (e)(1) -- Floating Rate Series B Senior Note Due 2000, in
the stated amount of $2,000,000.00, dated June 15,
1995, between Massachusetts Mutual Life Insurance
Company and the Company..............................144
10 (e)(2) -- Floating Rate Series B Senior Note Due 2000, in
the stated amount of $2,000,000.00, dated June 15,
1995, between Massachusetts Mutual Life Insurance
Company and the Company..............................148
10 (e)(3) -- Floating Rate Series B Senior Note Due 2000, in
the stated amount of $2,000,000.00, dated June 15,
1995, between Massachusetts Mutual Life Insurance
Company and the Company............................. 152
10 (f)(1) -- Floating Rate Series B Senior Note Due 2000, in
the stated amount of $4,000,000.00, dated June 15,
1995, between MassMutual Corporate Value Partners
Limited (I/N/O Webell & Co.) and the
Company...............................................156
10 (g)(1) -- 10.02% Series A Senior Note Due 2001, in the
stated amount of $3,000,000.00, dated June 15,
1995, between Modern Woodmen of America and the
Company...............................................160
10 (h)(1) -- Loan Agreement in the stated amount of
$5,000,000.00, dated June 27, 1995, between Bank
One, Texas, N.A. and the Company..................... 163
10 (h)(2) -- Revolving Credit Note in the stated amount of $5,000,000,
dated June 27, 1995, between Bank One, Texas, N.A. and
the Company.......................................... 250
EXHIBIT 3 - Amendment to the Bylaws, dated May 5, 1995.
Amendment to the Bylaws
of
ShowBiz Pizza Time, Inc.
Adopted on May 5, 1995
12A. Nomination of Directors. Only persons who are
nominated in accordance with the following procedures shall be
eligible for election as directors of the corporation. Subject
to the rights of any class or series of capital stock having a
preference over the common stock as to dividends or upon
liquidation to elect directors under specified circumstances,
nominations of persons for election to the Board of Directors may
be made at any annual meeting of stockholders (a) by or at the
direction of the Board of Directors (or any duly authorized
committee thereof) or (b) by any stockholder of the corporation
(i) who is a stockholder of record on the date of the giving of
the notice provided for in this Section 12A and on the record
date for the determination of stockholders entitled to vote at
such annual meeting and (ii) who complies with the notice
procedures set forth in this Section 12A.
In addition to any other applicable requirements, for a
nomination to be made by a stockholder, such stockholder must
have given timely notice thereof in proper written form to the
Secretary of the corporation. To be timely, a stockholder's
notice to the Secretary must be delivered to or mailed and
received at the principal executive offices of the corporation
(i) with respect to the corporation's first annual meeting of
stockholders following the adoption of this bylaw, notice by the
stockholder to be timely must be so received not later than the
close of business on the tenth (10th) day following the day on
which public disclosure of the adoption of this Section 12A is
first made and (ii) thereafter, not less than 60 days nor more
that 90 days prior to the date of the applicable annual meeting
of stockholders; provided, however, that in the event that less
than 70 days' notice or prior public disclosure of the date of
the meeting is given or made, notice by the stockholder to be
timely must be so received not later than the close of business
on the tenth (10th) day following the day on which such notice of
the date of the applicable annual meeting was mailed or such
public disclosure of the date of such annual meeting was made,
whichever first occurs. For purposed of this Section 12A, the
date of a public disclosure shall include, but not be limited to,
the date on which such disclosure is made in a press release
reported by the Dow Jones News Services, the Associated Press or
any comparable national news service or in a document publicly
filed by the corporation with the Securities and Exchange
Commission pursuant to Sections 13, 14, or 15(d) (or the rules
and regulations thereunder) of the Securities Exchange Act of
1934, as amended (the "Exchange Act").
To be in proper written form, a stockholder's notice to the
Secretary must set forth (a) as to each person whom the
stockholder proposes to nominate for election as a director (i)
the name, age business address and residence address of the
person, (ii) the principal occupation or employment of the
person, (iii) the class or series and number of shares of capital
stock of the corporation that are owned beneficially or of record
by the person and (iv) any other information relating to the
person that would be required to be disclosed in a proxy
statement or other filings required to be made in connection with
solicitations of proxies for election of directors pursuant to
Section 14 of the Exchange Act and (b) as to the stockholder
giving the notice (i) the name and record address of such
stockholder, (ii) the class or series and number of shares of
capital stock of the corporation that are owned beneficially or
of record by such stockholder, (iii) a description of all
arrangements or understandings between such stockholder and each
proposed nominee and any other person or persons (including their
names) pursuant to which the nomination(s) are to be made by such
stockholders, (iv) a representation that such stockholder intends
to appear in person or by proxy at the meeting to nominate the
persons named in its notice and (v) any other information
relating to such stockholder that would be required to be
disclosed in a proxy statement or other filings required to be
made in connection with solicitations of proxies for election of
directors pursuant to Section 14 of the Exchange Act and the
rules and regulations promulgated thereunder. Such notice must
be accompanied by a written consent of each proposed nominee to
being named as a nominee and to serve as a director if elected.
No person shall be eligible for election as a director of
the corporation unless nominated in accordance with the
procedures set forth in this Section 12A. If the Chairman of the
meeting determines that a nomination was not made in accordance
with the foregoing procedures, the Chairman shall declare to the
meeting that the nomination was defective and such defective
nomination shall be disregarded.
12B. Business as Annual Meeting. No business may be
transacted at an annual meeting of stockholders, other than
business that is either (a) specified in the notice of meeting
(or any supplement thereto) given by or at the direction of the
Board of Directors (or any duly authorized committee thereof),
(b) otherwise properly brought before the annual meeting by or at
the direction of the Board of Directors (or any duly authorized
committee thereof) or (c) otherwise properly brought before the
annual meeting by any stockholder of the corporation (i) who is a
stockholder of record on the date of the giving of the notice
provided for in this Section 12B and on the record date for the
determination of stockholders entitled to vote at such annual
meeting and (ii) who complies with the notice procedures set
forth in this Section 12B.
In addition to any other applicable requirements, for
business to be properly brought before an annual meeting by a
stockholder, such stockholder must have given timely notice
thereof in proper written form to the Secretary of the
corporation. To be timely, a stockholder's notice to the
Secretary must be delivered to or mailed and received at the
principal executive offices of the corporation (i) with respect
to the corporation's first annual meeting of stockholders
following the adoption of this bylaw, notice by the stockholder
to be timely must be so received not later than the close of
business on the tenth (10th) day following the day on which
public disclosure of the adoption of this Section 12B is first
made and (ii) thereafter, not less than 60 days nor more than 90
days prior to the date of the applicable annual meeting of
stockholders; provided, however, that in the event that less than
70 days' notice or prior public disclosure of the date of the
meeting be given or made, notice by the stockholder to be timely
must be so received not later than the close of business on the
tenth (10th) day following the day on which such notice of the
date of the applicable annual meeting was mailed or such public
disclosure of the date of such annual meeting was made, whichever
first occurs. For purposes of this Section 12B, the date of a
public disclosure shall include, but not be limited to, the date
on which such disclosure is made in a press release reported by
the Dow Jones News Services, the Associated Press or any
comparable news service or in a document publicly filed by the
corporation with the Securities and Exchange Commission pursuant
to Sections 13, 14 or 15(d) (or the rules and regulations
thereunder) of the Exchange Act.
To be in proper written from, a stockholder's notice to the
Secretary must set forth as to each matter such stockholder
proposes to bring before the annual meeting (i) a brief
description of the business desired to be brought before the
annual meeting and the reasons for conduction such business at
the annual meeting, (ii) the name and record address of such
stockholder, (iii) the class or series and number of shares of
capital stock of the corporation that are owned beneficially or
of record by such stockholder, (iv) a description of all
arrangements or understandings between such stockholder and any
other person or persons (including their names) in connection
with the proposal of such business by such stockholder and any
material interest of such stockholder in such business and (v) a
representation that such stockholder intends to appear in person
or by proxy at the annual meeting to bring such business before
the meeting.
No business shall be conducted at the annual meeting of
stockholders except business brought before the annual meeting in
accordance with the procedures set forth in this Section 12B;
provided, however, that, once business has been properly brought
before the annual meeting in accordance with such procedures,
nothing in this Section 12B shall be deemed to preclude
discussion by any stockholder of any such business. If the
Chairman of an annual meeting determines that business was not
properly brought before the annual meeting in accordance with the
foregoing procedures, the Chairman shall declare to the meeting
that the business was not properly brought before the meeting and
such business shall not be transacted.
EXHIBIT 10 (a)(1) - 10.02% Series A Senior Note Due 2001
SHOWBIZ PIZZA TIME, INC.
------------------------
10.02% Series A Senior Notes due 2001
Floating Rate Series B Senior Notes due 2000
____________________
NOTE PURCHASE AGREEMENT
____________________
Dated as of June 15, 1995
------------------------------------------------------------------------------
Table of Contents
------------------
Page
1. THE NOTES. . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1. Authorization of Notes. . . . . . . . . . . . . . . . . 1
1.2. Interest Rates on the Notes; Reset Procedures for
Series B Notes. . . . . . . . . . . . . . . . . . . . . 1
2. SALE AND PURCHASE OF NOTES . . . . . . . . . . . . . . . . . 4
3. CLOSING. . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4. CONDITIONS TO CLOSING. . . . . . . . . . . . . . . . . . . . 5
4.1. Representations and Warranties. . . . . . . . . . . . . 5
4.2. Performance; No Default.. . . . . . . . . . . . . . . . 5
4.3. Compliance Certificates . . . . . . . . . . . . . . . . 6
4.4. Opinions of Counsel . . . . . . . . . . . . . . . . . . 6
4.5. Purchase Permitted By Applicable Law, etc.. . . . . . . 6
4.6. Sale of Notes to Other Purchasers . . . . . . . . . . . 6
4.7. Payment of Special Counsel Fees . . . . . . . . . . . . . 7
4.8. Private Placement Number. . . . . . . . . . . . . . . . 7
4.9. Changes in Corporate Structure. . . . . . . . . . . . . 7
4.10. Proceedings and Documents. . . . . . . . . . . . . 7
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. . . . . . . . 7
5.1. Organization; Power and Authority . . . . . . . . . . . 7
5.2. Authorization, etc. . . . . . . . . . . . . . . . . . . 8
5.3. Disclosure. . . . . . . . . . . . . . . . . . . . . . . 8
5.4. Organization and Ownership of Shares of
Subsidiaries; Affiliates. . . . . . . . . . . . . . . . 8
5.5. Financial Statements. . . . . . . . . . . . . . . . . . . 9
5.6. Compliance with Laws, Other Instruments, etc. . . . . . . 9
5.7. Governmental Authorizations, etc. . . . . . . . . . . . 10
5.8. Litigation; Observance of Agreements, Statutes and
Orders. . . . . . . . . . . . . . . . . . . . . . . . . 10
5.9. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.10. Title to Property; Leases. . . . . . . . . . . . . 11
5.11. Licenses, Permits, etc.. . . . . . . . . . . . . . 11
5.12. Compliance with ERISA. . . . . . . . . . . . . . . 11
5.13. Private Offering by the Company. . . . . . . . . . 13
5.14. Use of Proceeds; Margin Regulations. . . . . . . . 13
5.15. Existing Indebtedness; Future Liens. . . . . . . . 13
5.16. Foreign Assets Control Regulations, etc. . . . . . 14
5.17. Status under Certain Statutes. . . . . . . . . . . 14
5.18. Environmental Matters. . . . . . . . . . . . . . . 14
6. REPRESENTATIONS OF THE PURCHASER . . . . . . . . . . . . . . 15
6.1. Purchase of Notes . . . . . . . . . . . . . . . . . . . 15
6.2. Source of Funds.. . . . . . . . . . . . . . . . . . . . 15
7. INFORMATION AS TO COMPANY. . . . . . . . . . . . . . . . . . 16
7.1. Financial and Business Information. . . . . . . . . . . 16
7.2. Officer's Certificate.. . . . . . . . . . . . . . . . . 20
7.3. Inspection. . . . . . . . . . . . . . . . . . . . . . . 20
8. PREPAYMENT OF THE NOTES. . . . . . . . . . . . . . . . . . . 21
8.1. Required Prepayments. . . . . . . . . . . . . . . . . . 21
8.2. Prepayment in Connection with a Change of Control . . . 21
8.3. Allocation of Partial Prepayments . . . . . . . . . . . 22
8.4. Maturity; Surrender, etc. . . . . . . . . . . . . . . . 23
8.5. Purchase or Optional Redemption of Notes. . . . . . . . 24
8.6. Make-Whole Amount . . . . . . . . . . . . . . . . . . . 24
9. AFFIRMATIVE COVENANTS. . . . . . . . . . . . . . . . . . . . 26
9.1. Compliance with Law . . . . . . . . . . . . . . . . . . 26
9.2. Insurance . . . . . . . . . . . . . . . . . . . . . . . 26
9.3. Maintenance of Properties . . . . . . . . . . . . . . . 26
9.4. Payment of Taxes and Claims . . . . . . . . . . . . . . 27
9.5. Corporate Existence, etc. . . . . . . . . . . . . . . . 27
9.6. Lines of Business . . . . . . . . . . . . . . . . . . . 27
10. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . 27
10.1. Liens. . . . . . . . . . . . . . . . . . . . . . . 28
10.2. Maintenance of Financial Conditions. . . . . . . . 29
10.3. Asset Sales. . . . . . . . . . . . . . . . . . . . 30
10.4. Merger, Consolidation, etc.. . . . . . . . . . . . 31
10.5. Subsidiary Indebtedness. . . . . . . . . . . . . . 32
10.6. Transactions with Affiliates . . . . . . . . . . . 33
10.7. Additional Covenants and Events of Default . . . . 33
11. EVENTS OF DEFAULT. . . . . . . . . . . . . . . . . . . . . . 33
12. REMEDIES ON DEFAULT, ETC.. . . . . . . . . . . . . . . . . . 36
12.1. Acceleration . . . . . . . . . . . . . . . . . . . 36
12.2. Other Remedies . . . . . . . . . . . . . . . . . . 37
12.3. Rescission . . . . . . . . . . . . . . . . . . . . 37
12.4. No Waivers or Election of Remedies, Expenses,
etc.. . . . . . . . . . . . . . . . . . . . . . . . . . 37
13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES. . . . . . . . 38
13.1. Registration of Notes. . . . . . . . . . . . . . . 38
13.2. Transfer and Exchange of Notes . . . . . . . . . . 38
13.3. Replacement of Notes . . . . . . . . . . . . . . . 39
14. PAYMENTS ON NOTES. . . . . . . . . . . . . . . . . . . . . . 39
14.1. Place of Payment . . . . . . . . . . . . . . . . . 39
14.2. Home Office Payment. . . . . . . . . . . . . . . . 39
15. EXPENSES, ETC. . . . . . . . . . . . . . . . . . . . . . . . 40
15.1. Transaction Expenses . . . . . . . . . . . . . . . 40
15.2. LIBOR Funding Losses . . . . . . . . . . . . . . . 41
15.3. Survival . . . . . . . . . . . . . . . . . . . . . 41
16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE
AGREEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . 41
17. AMENDMENT AND WAIVER . . . . . . . . . . . . . . . . . . . . 42
17.1. Requirements . . . . . . . . . . . . . . . . . . . 42
17.2. Solicitation of Holders of Notes . . . . . . . . . 42
17.3. Binding Effect, etc. . . . . . . . . . . . . . . . 42
17.4. Notes held by Company, etc.. . . . . . . . . . . . 43
18. NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . . 43
19. REPRODUCTION OF DOCUMENTS. . . . . . . . . . . . . . . . . . 44
20. CONFIDENTIAL INFORMATION . . . . . . . . . . . . . . . . . . 44
21. SUBSTITUTION OF PURCHASER. . . . . . . . . . . . . . . . . . 45
22. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . 46
22.1. Successors and Assigns . . . . . . . . . . . . . . .
22.2. Construction . . . . . . . . . . . . . . . . . . . 46
22.3. Jurisdiction and Process; Waiver of Jury
Trial. . . . . . . . . . . . . . . . . . . . . . . 46
22.4. Indemnification. . . . . . . . . . . . . . . . . . 47
22.5. Accounting Terms . . . . . . . . . . . . . . . . . 48
22.6. Payments Due on Non-Business Days. . . . . . . . . 48
22.7. Severability . . . . . . . . . . . . . . . . . . . 48
22.8. Counterparts . . . . . . . . . . . . . . . . . . . 49
22.9. Governing Law. . . . . . . . . . . . . . . . . . . 49
Schedule A -Names and Addresses of Purchasers
Schedule B -Defined Terms
Exhibit 1.1(a) -Form of 10.02% Series A Senior Note due 2001
Exhibit 1.1(b) -Form of Floating Rate Series B Senior Note due
2000
Exhibit 4.4(a) -Form of Opinion of Counsel for the Company
Exhibit 4.4(b) -Form of Opinion of Special Counsel for the
Company
Exhibit 4.4(c) -Form of Opinion of Special Counsel for the
Purchasers
Schedule 5.3 -Disclosure Documents
Schedule 5.4 -Subsidiaries
Schedule 5.5 -Financial Statements
Schedule 5.8 -Litigation
Schedule 5.11 -Licenses, Etc.
Schedule 5.15 -Existing Indebtedness
SHOWBIZ PIZZA TIME, INC.
4441 West Airport Freeway
Irving, TX 75015
10.02% Series A Senior Notes due 2001
Floating Rate Series B Senior Notes due 2000
As of June 15, 1995
TO EACH OF THE PURCHASERS LISTED IN
THE ATTACHED SCHEDULE A:
Ladies and Gentlemen:
SHOWBIZ PIZZA TIME, INC., a Kansas corporation (the
"Company"), agrees with you as follows:
1. THE NOTES.
1.1. Authorization of Notes.
The Company has duly authorized the issue and sale of
$18,000,000 aggregate principal amount of its 10.02% Series A
Senior Notes due 2001 (the "Series A Notes") and $10,000,000
aggregate principal amount of its Floating Rate Series B Senior
Notes due 2000 (the "Series B Notes"), substantially in the
respective forms set out in Exhibits 1.1(a) and 1.1(b). As used
herein, the term "Notes" shall mean all notes (irrespective of
series unless otherwise specified) originally delivered pursuant to
this Agreement and the Other Agreements referred to below and all
notes delivered in substitution or exchange for any such note and,
where applicable, shall include the singular number as well as the
plural. Certain capitalized terms used in this Agreement are
defined in Schedule B; references to a "Schedule" or an "Exhibit"
are, unless otherwise specified, to a Schedule or an Exhibit
attached to this Agreement. The terms "Note", "Series A Note" and
"Series B Note" shall mean one of the Notes, Series A Notes and
Series B Notes, respectively.
1.2. Interest Rates on the Notes; Reset Procedures for Series B
Notes.
(a) Series A Notes. Each Series A Note shall bear
interest from the date of issue at the rate of 10.02% per annum
(computed on the basis of a 360-day year of twelve 30-day months),
payable quarterly on each Interest Payment Date in each year until
the principal thereof shall become due and payable and shall bear
interest on demand on any overdue principal or premium, if any, and
on any overdue installment of interest at the default rate
specified therein.
(b) Series B Notes. Each Series B Note shall bear
interest, payable quarterly on each Interest Payment Date in each
year, at a rate per annum (computed on the basis of actual days
elapsed and a year of 360 days) equal to 3.5% plus the LIBOR Rate
for the Interest Period commencing on the date of the Closing
(which shall be a period of six months), and from time to time
thereafter at a rate per annum (so computed) equal to 3.5% plus the
LIBOR Rate as in effect from time to time for the applicable
Interest Period until the principal thereof shall become due and
payable and shall bear interest on demand on any overdue principal
or premium, if any, and on any overdue installment of interest at
the default rate specified therein. If you are purchasing Series B
Notes under this Agreement, at least one Business Day before the
date of the Closing, the Company will give notice to you,
specifying the initial LIBOR Rate, which shall be determined with
respect to the date of the Closing as if that date were a Reset
Date, and the resulting applicable interest rate on the Series B
Notes for the Interest Period commencing on the date of the
Closing.
The Company will give written notice to each Holder of a
Series B Note at least three Business Days prior to each Reset Date
(a "Reset Notice") specifying the duration of the Interest Period
commencing on that Reset Date. If for any reason the Company fails
to give a Reset Notice with respect to any Reset Date, the Interest
Period commencing on such Reset Date shall be deemed a six-month
period (or a three-month period in the case of the final Interest
Period if the Reset Date is three months prior to the final
maturity of the Series B Notes). On each Reset Date the Company
shall determine the LIBOR Rate for the Interest Period then
commencing and will give notice to the Calculation Holder (by
telephone or facsimile to such person as the Calculation Holder may
from time to time specify for such purpose) specifying the LIBOR
Rate as so determined. If for any reason the Calculation Holder,
by notice to the Company (which notice shall be given within one
Business Day after the Reset Date), objects to such determination,
the LIBOR Rate as determined by the Calculation Holder shall be
final and binding upon the Company absent manifest error.
Forthwith and in any event within two Business Days after each
Reset Date the Company will give written notice to the Holders of
the Series B Notes specifying the LIBOR Rate and the resulting
applicable interest rate on the Series B Notes for the Interest
Period commencing on that Reset Date and stating whether the
Calculation Holder determined (or confirmed the Company's
determination of) the LIBOR Rate for that Interest Period. If for
any reason neither the Company nor the Calculation Holder
determines the LIBOR Rate for any Interest Period, the
determination of the LIBOR Rate by any other Institutional Investor
Holder of a Series B Note (acting in place of the Calculation
Holder if necessary) and specified in a written notice to the
Company shall be final and binding upon the Company and the Holders
of the Series B Notes absent manifest error, provided that in case
more than one such Institutional Investor Holder gives such a
written notice and the LIBOR Rate in such notices is not the same
rate, the LIBOR Rate shall be the rate agreed upon by such other
Institutional Investor Holders as specified in a subsequent notice
to the Company, which rate shall be final and binding as aforesaid.
(c) Certain Defined Terms and Procedures. For purposes
of determining the applicable interest rate on the Series B Notes,
the following terms have the following meanings (and certain
matters will be determined in accordance with procedures as
specified below):
"Calculation Holder" means the Institutional Investor
holding the highest unpaid principal amount of Series B Notes
at the time outstanding and willing to serve in such
capacity.
"Designated Maturity" means for any Reset Date a period
of three or six months, as the case may be, corresponding to
the Interest Period commencing on such Reset Date.
"Interest Period" means a period commencing on and
including the date of the Closing or a Reset Date, as the
case may be, and ending on the Interest Payment Date that is
three or six months thereafter, as set forth in respect of
the Interest Period commencing on the date of the Closing in
Section 1.2(b) and as set forth in respect of each Reset Date
in the Reset Notice for such period. Notwithstanding the
foregoing if the Interest Payment Date in the appropriate
month is not a Business Day such Interest Period shall be
extended to the next day that is a Business Day and if there
is no numerically corresponding date in the appropriate
month, such Interest Period shall end on the last Business
Day of such month.
"LIBOR Rate" means for the Interest Period commencing on
the date of the Closing, the rate specified in notice from
the Company given pursuant to Section 1.2(b); and means for
any Reset Date the rate for deposits in U.S. Dollars for a
period of the Designated Maturity which appears on the
display designated as "Page 3750" on Telerate Access Service
(or such other display as may replace Page 3750 on Telerate
Access Service) as of 11:00 a.m., London time, on the date
that is two London Banking Days preceding that Reset Date;
and if such rate does not appear on Telerate Page 3750 (or
such other display), the rate for that Reset Date will be
determined on the basis of rates on which deposits in U.S.
dollars are offered by the Reference Banks at approximately
11:00 a.m., London time, on the day that is two London
Banking Days preceding that Reset Date to prime banks in the
London interbank market for a period of the Designated
Maturity commencing on that Reset Date and in a
Representative Amount. The Company will cause the
Calculation Holder to request the principal London office of
each of the Reference Banks to provide a quotation of its
rate. If at least two such quotations are provided, the rate
for that Reset Date will be the arithmetic means of the
quotations. If fewer than two quotations are provided as
requested, the rate for that Reset Date will be the
arithmetic mean of the rates quoted by major banks in New
York City, selected by the Calculation Holder, at
approximately 11:00 a.m., New York City time, on that Reset
Date for loans in U.S. dollars to leading European banks for
a period of the Designated Maturity commencing on that Reset
Date and in a Representative Amount.
"London Banking Day" means any day other than Saturday or
Sunday or a day on which commercial banks are required or
authorized by law to be closed in London, England.
"Reference Banks" means four major banks in the London
interbank market.
"Representative Amount" means an amount that is
comparable to the unpaid principal amount of the Series B
Notes at the relevant time.
"Reset Date" means any Interest Payment Date
corresponding to the first day of an Interest Period.
"Reset Notice" is defined in Section 1.2(b).
2. SALE AND PURCHASE OF NOTES.
Subject to the terms and conditions of this Agreement, the
Company will issue and sell to you and you will purchase from the
Company, at the Closing provided for in Section 3, Notes of the
series and in the principal amount or amounts specified opposite
your name in Schedule A at the purchase price of 100% of the
principal amount thereof. Contemporaneously with entering into
this Agreement, the Company is entering into separate Note Purchase
Agreements (the "Other Agreements") identical with this Agreement
(except for the principal amounts and series of Notes to be
purchased) with each of the other purchasers named in Schedule A
(the "Other Purchasers"), providing for the sale at such Closing to
each of the Other Purchasers of Notes of the series and in the
principal amount or amounts specified opposite its name in Schedule
A. Your obligation hereunder and the obligations of the Other
Purchasers under the Other Agreements are several and not joint
obligations and you shall have no obligation under any Other
Agreement and no liability to any Person for the performance or
non-performance by any Other Purchaser thereunder.
3. CLOSING.
The sale and purchase of the Notes to be purchased by you and
the Other Purchasers shall occur at the offices of Willkie Farr &
Gallagher, One Citicorp Center, 153 East 53rd Street, New York, NY
10022 at 10:00 a.m., New York time, at a closing (the "Closing")
on June 15, 1995 or on such other Business Day thereafter on or
prior to June 30, 1995 as may be agreed upon by the Company and you
and the Other Purchasers. At the Closing the Company will deliver
to you the Notes to be purchased by you in the form of a single
Note of each series so to be purchased (or such greater number of
Notes in denominations of at least $100,000 as you may request)
dated the date of the Closing and registered in your name (or in
the name of your nominee), against delivery by you to the Company
or its order of immediately available funds in the amount of the
purchase price therefor by wire transfer of immediately available
funds for the account of the Company to account number 501-33529 at
Bank of Boston, Boston, Massachusetts, ABA# 011000390 (Attention:
Garrett Quinn at 617-434-4619).
If at the Closing the Company shall fail to tender such Notes
to you as provided above in this Section 3, or any of the
conditions specified in Section 4 shall not have been fulfilled to
your satisfaction, you shall, at your election, be relieved of all
further obligations under this Agreement, without thereby waiving
any rights you may have by reason of such failure or such
nonfulfillment.
4. CONDITIONS TO CLOSING.
Your obligation to purchase and pay for the Notes to be sold
to you at the Closing is subject to the fulfillment to your
satisfaction, prior to or at the Closing, of the following
conditions:
4.1. Representations and Warranties.
The representations and warranties of the Company in this
Agreement shall be correct when made and at the time of the
Closing.
4.2. Performance; No Default.
The Company shall have performed and complied with all
agreements and conditions contained in this Agreement required to
be performed or complied with by it prior to or at the Closing and
after giving effect to the issue and sale of the Notes (and the
application of the proceeds thereof AS CONTEMPLATED BY sCHEDULE
5.14) no Default or Event of Default shall have occurred and be
continuing. Neither the Company nor any Subsidiary shall have
entered into any transaction since the date of the Memorandum that
would have been prohibited by Section 10.1, 10.3 or 10.4 had such
Sections applied since such date.
4.3. Compliance Certificates.
(a) Officer's Certificate. The Company shall have
delivered to you an Officer's Certificate, dated the date of the
Closing, certifying that the conditions specified in Sections 4.1,
4.2 and 4.9 have been fulfilled.
(b) Secretary's Certificate. The Company shall have
delivered to you a certificate of the Secretary or an Assistant
Secretary of the Company certifying as to the resolutions attached
thereto and other corporate proceedings relating to the
authorization, execution and delivery of the Notes and this
Agreement and the Other Agreements.
4.4. Opinions of Counsel.
You shall have received opinions in form and substance
satisfactory to you, dated the date of the Closing and addressed to
you (a) from Marshall Fisco, Esq., Counsel of the Company, and
Winstead Sechrest & Minick P.C., special counsel for the Company,
substantially in the respective forms set forth in Exhibits 4.4(a)
and 4.4(b) and covering such other matters incident to the
transactions contemplated hereby as you or your counsel may
reasonably request (and the Company hereby instructs its counsel to
deliver such opinions to you) and (b) from Willkie Farr &
Gallagher, your special counsel in connection with such
transactions, substantially in the form set forth in Exhibit 4.4(c)
and covering such other matters incident to such transactions as
you may reasonably request.
4.5. Purchase Permitted By Applicable Law, etc.
On the date of the Closing your purchase of Notes shall (a)
be permitted by the laws and regulations of each jurisdiction to
which you are subject, without recourse to provisions (such as
Section 1405 (a) (8) of the New York Insurance Law) permitting
limited investments by insurance companies without restriction as
to the character of the particular investment, (b) not violate any
applicable law or regulation (including without limitation
Regulation G, T or X of the Board of Governors of the Federal
Reserve System) and (c) not subject you to any tax, penalty or
liability under or pursuant to any applicable law or regulation,
which law or regulation was not in effect on the date hereof. If
requested by you, you shall have received an Officer's Certificate
certifying as to such matters of fact as you may reasonably specify
to enable you to determine whether such purchase is so permitted.
4.6. Sale of Notes to Other Purchasers.
The Company shall sell to the Other Purchasers and the Other
Purchasers shall purchase the Notes to be purchased by them at the
Closing as specified in Schedule A.
4.7. Payment of Special Counsel Fees.
Without limiting the provisions of Section 15.1, the
Company shall have paid on or before the Closine the reasonable
fees, charges and disbursements of your special counsel referred to
in Section 4.4 to the extent reflected in a statement of such
counsel rendered to the Company at least one Business Day prior to
the Closing.
4.8. Private Placement Number.
A Private Placement Number issued by Standard & Poor's CUSIP
Service Bureau (in cooperation with the Securities Valuation
Office of the National Association of Insurance Commissioners)
shall have been obtained for the Notes of each series.
4.9. Changes in Corporate Structure.
The Company shall not have changed its jurisdiction of
incorporation or been a party to any merger or consolidation and
shall not have succeeded to all or any substantial part of the
liabilities of any other entity at any time following the date of
the most recent financial statements referred to in Schedule 5.5.
4.10. Proceedings and Documents.
All corporate and other proceedings in connection with the
transactions contemplated by this Agreement and all documents and
instruments incident to such transactions shall be satisfactory to
you and your special counsel, and you and your special counsel
shall have received all such counterpart originals or certified or
other copies of such documents as you or they may reasonably
request.
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to you that:
5.1. Organization; Power and Authority.
The Company is a corporation duly organized, validly existing
and in good standing under the laws of its jurisdiction of
incorporation, and is duly qualified as a foreign corporation and
is in good standing in each jurisdiction in which such
qualification is required by law, other than those jurisdictions as
to which the failure to be so qualified or in good standing could
not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect. The Company has the corporate
power and authority to own or hold under lease the properties it
purports to own or hold under lease, to transact the business it
transacts and proposes to transact, to execute and deliver this
Agreement and the Other Agreements and the Notes and to perform the
provisions hereof and thereof.
5.2. Authorization, etc.
This Agreement and the Other Agreements and the Notes have
been duly authorized by all necessary corporate action on the part
of the Company, and this Agreement constitutes, and upon execution
and delivery thereof each Note will constitute, a legal, valid and
binding obligation of the Company, enforceable against the Company
in accordance with its terms, except as such enforceability may be
limited by (a) applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of
creditors' rights generally and (b) general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or at law).
5.3. Disclosure.
The Company, through its agent, CS First Boston, has
delivered to you a copy of a Private Placement Memorandum, dated
March 1995 (the "Memorandum"), relating to the transactions
contemplated hereby. The Memorandum fairly describes, in all
material respects, the general nature of the business and principle
properties of the Company and its Subsidiaries. This Agreement,
the Memorandum, the documents, certificates or other writings
delivered to you by or on behalf of the Company in connection with
the transactions contemplated hereby and described in Schedule 5.3
(together with the Memorandum, the "Disclosure Documents"), and the
financial statements listed in Schedule 5.5, taken as a whole, do
not contain any untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein
not misleading in light of the circumstances under which they were
made. Since December 31, 1994, there has been no change in the
financial condition, operations, business, properties or prospects
of the Company or any Subsidiary except as disclosed in the
Disclosure Documents or in the financial statements listed in
Schedule 5.5 and other changes that individually or in the
aggregate could not reasonably be expected to have a Material
Adverse Effect. There is no fact known to the Company that could
reasonably be expected to have a Material Adverse Effect that has
not been set forth herein or in the Disclosure Documents.
5.4. Organization and Ownership of Shares of Subsidiaries;
Affiliates.
(a) Schedule 5.4 contains (except as noted therein)
complete and correct lists of the Company's (i) Subsidiaries,
showing, as to each Subsidiary, the correct name thereof, the
jurisdiction of its organization, and the percentage of shares of
each class of its capital stock or similar equity interests
outstanding owned by the Company and each other Subsidiary, (ii)
Affiliates, other than Subsidiaries, and (iii) directors and senior
officers.
(b) All of the outstanding shares of capital stock or
similar equity interests of each Subsidiary shown in Schedule 5.4
as being owned by the Company and its Subsidiaries have been
validly issued, are fully paid and nonassessable and are owned by
the Company or another Subsidiary free and clear of any Lien
(except as otherwise disclosed in Schedule 5.4).
(c) Each Subsidiary identified in Schedule 5.4 is a
corporation duly organized, validly existing and in good standing
under the laws of its jurisdiction of organization, and is duly
qualified as a foreign corporation or other legal entity and is in
good standing in each jurisdiction in which such qualification is
required by law, other than those jurisdictions as to which the
failure to be so qualified or in good standing could not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. Each such Subsidiary has the corporate or
other power and authority to own or hold under lease the properties
it purports to own or hold under lease and to transact the business
it transacts and proposes to transact.
(d) No Subsidiary is a party to, or otherwise subject to
any legal restriction or any agreement (other than this Agreement,
the agreements listed in Schedule 5.4 and customary limitations
imposed by corporate law statutes) restricting the ability of such
Subsidiary to pay dividends out of profits or make any other
similar distributions of profits to the Company or any of its
Subsidiaries that owns outstanding shares of capital stock or
similar equity interests of such Subsidiary.
5.5. Financial Statements.
The Company has delivered to you copies of the financial
statements of the Company and its Subsidiaries listed in Schedule
5.5. All of said financial statements (including in each case the
related schedules and notes) fairly present in all material
respects the consolidated financial position of the Company and its
Subsidiaries as of the respective dates specified in such Schedule
and the consolidated results of their operations and cash flows for
the respective periods so specified and have been prepared in
accordance with GAAP consistently applied throughout the periods
involved except as set forth in the notes thereto (subject, in the
case of any interim financial statements, to normal year-end
adjustments).
5.6. Compliance with Laws, Other Instruments, etc.
The execution, delivery and performance by the Company of
this Agreement and the Notes will not (i) contravene, result in any
breach of, or constitute a default under, or result in the creation
of any Lien in respect of any property of the Company or any
Subsidiary under, any indenture, mortgage, deed of trust, loan,
purchase or credit agreement, lease, corporate charter or by-laws,
or any other agreement or instrument to which the Company or any
Subsidiary is bound or by which the Company or any Subsidiary or
any of their respective properties may be bound or affected, (ii)
conflict with or result in a breach of any of the terms, conditions
or provisions of any order, judgment, decree, or ruling of any
court, arbitrator or Governmental Authority applicable to the
Company or any Subsidiary or (iii) violate any provision of any
statute or other rule or regulation of any Governmental Authority
applicable to the Company or any Subsidiary.
5.7. Governmental Authorizations, etc.
No consent, approval or authorization of, or registration,
filing or declaration with, any Governmental Authority is required
for the validity of the execution, delivery or performance by the
Company of this Agreement or the Notes.
5.8. Litigation; Observance of Agreements, Statutes and Orders.
(a) Except as disclosed in Schedule 5.8, there are no
actions, suits or proceedings pending or, to the knowledge of the
Company, threatened against or affecting the Company or any
Subsidiary or any property of the Company or any Subsidiary in any
court or before any arbitrator of any kind or before or by any
Governmental Authority that, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect.
(b) Neither the Company nor any Subsidiary is in default
under any term of any agreement or instrument to which it is a
party or by which it is bound, or any order, judgment, decree or
ruling of any court, arbitrator or Governmental Authority or is in
violation of any applicable law, ordinance, rule or regulation
(including without limitation Environmental Laws) of any
Governmental Authority, which default or violation, individually or
in the aggregate, could reasonably be expected to have a Material
Adverse Effect.
5.9. Taxes.
The Company and its Subsidiaries have filed all tax returns
that are required to have been filed in any jurisdiction, and have
paid all taxes shown to be due and payable on such returns and all
other taxes and assessments levied upon them or their properties,
assets, income or franchises, to the extent such taxes and
assessments have become due and payable and before they have become
delinquent, except for any taxes and assessments (a) currently
payable without penalty or interest, (b) the amount of which is not
individually or in the aggregate Material or (c) the amount,
applicability or validity of which is currently being contested in
good faith by appropriate proceedings and with respect to which the
Company or a Subsidiary, as the case may be, has established
adequate reserves in accordance with GAAP. The Company knows of no
basis for any other tax or assessment that individually or in the
aggregate might be Material. The charges, accruals and reserves on
the books of the Company and its Subsidiaries in respect of
Federal, state or other taxes for all fiscal periods are adequate.
The Federal income tax liabilities of the Company and its
Subsidiaries have been determined by the Internal Revenue Service
and paid for all fiscal years up to and including the fiscal year
ended December 31, 1993.
5.10. Title to Property; Leases.
The Company and its Subsidiaries have good and marketable
title to their respective real properties and good and sufficient
title to their respective other properties that individually or in
the aggregate are Material, including all such properties reflected
in the most recent audited balance sheet listed on Schedule 5.5 or
purported to have been acquired by the Company or any Subsidiary
after said date (except as sold or otherwise disposed of in the
ordinary course of business), in each case free and clear of Liens
prohibited by this Agreement. All leases that individually or in
the aggregate are Material are valid and subsisting and are in full
force and effect in all material respects.
5.11. Licenses, Permits, etc.
Except as disclosed in Schedule 5.11,
(a) the Company and its Subsidiaries own or possess
all licenses, permits, franchises, authorizations, patents,
copyrights, service marks, trademarks and trade names, or
rights thereto, that individually or in the aggregate are
Material, without known conflict with the rights of others;
(b) to the best knowledge of the Company, no
product of the Company infringes in any material respect any
license, permit, franchise, authorization, patent, copyright,
service mark, trademark, trade name or other right owned by
any other Person; and
(c) to the best knowledge of the Company, there is
no Material violation by any Person of any right of the
Company or any of its Subsidiaries with respect to any
patent, copyright, service mark, trademark, trade name or
other right owned or used by the Company or any of its
Subsidiaries.
5.12. Compliance with ERISA.
(a) The Company and each ERISA Affiliate have
operated and administered each Plan in compliance with all
applicable laws except for such instances of noncompliance
as have not resulted in and could not reasonably be expected
to result in a Material Adverse Effect. Neither the Company
nor any ERISA Affiliate has incurred any liability pursuant
to Title I or IV of ERISA or the penalty or excise tax
provisions of the Code relating to employee benefit plans (as
defined in Section 3 of ERISA), and no event, transaction or
condition has occurred or exists that could reasonably be
expected to result in the incurrence of any such liability
by the Company or any ERISA Affiliate, or in the imposition
of any Lien on any of the rights, properties or assets of the
Company or any ERISA Affiliate, in either case pursuant to
Title I or IV of ERISA or to such penalty or excise tax
provisions or to Section 401(a)(29) or 412 of the Code, other
than such liabilities or Liens as would not be individually
or in the aggregate Material.
(b) The present value of the aggregate benefit
liabilities under each of the Plans (other than Multiemployer
Plans), determined as of the end of such Plan's most recently
ended plan year on the basis of the actuarial assumptions
specified for funding purposes in such Plan's most recent
actuarial valuation report, did not exceed the aggregate
current value of the assets of such Plan allocable to such
benefit liabilities. The term "benefit liabilities" has the
meaning specified in section 4001 of ERISA and the terms
"current value" and "present value" have the meaning
specified in section 3 of ERISA.
(c) The Company and its ERISA Affiliates have not
incurred withdrawal liabilities (and are not subject to
contingent withdrawal liabilities) under section 4201 or 4204
of ERISA in respect of Multiemployer Plans that individually
or in the aggregate are Material.
(d) The expected postretirement benefit obligation
(determined as of the last day of the Company's most recently
ended fiscal year in accordance with Financial Accounting
Standards Board Statement No. 106, without regard to
liabilities attributable to continuation coverage mandated
by section 4980B of the Code) of the Company and its
Subsidiaries is not Material.
(e) With respect to each employees benefit plan, if
any, disclosed by you in writing to the Company in accordance
with Section 6.2(c), neither the Company nor any "affiliate"
of the Company (as defined in Section V(C) of the QPAM
Exemption) has at this time, not has exercised at any time
during the immediately preceding year, the authority to
appoint or terminate the "QPAM" (as defined in Part V of the
QPAM Exemption) disclosed by you to the Company pursuant to
Section 6.2(c) as manager of any of the assets of any such
plan or to negotiate the terms of any management agreement
with such QPAM on behalf of any such plan, and the Company
is not an "affiliate" (as so defined) of such QPAM. The
Company is not a party in interest with respect to any
employee benefit plan disclosed by you in accordance with
Section 6.2 (b) or 6.2 (e). The execution and delivery of
this Agreement and the issuance and sale of the Notes at the
Closing hereunder will not involve any prohibited transaction
(as such term is defined in section 406 (a) of ERISA and
section 4975 (c) (1) (A) - (D) of the Code), that could
subject the Company or any holder of a Note to any tax or
penalty on prohibited transactions imposed under said section
4975 of the Code or by section 502 (i) of ERISA. The
representation by the Company in the preceding sentence of
this Section 5.12 (e) is made in reliance upon and subject
to the accuracy of your representation in Section 6.2 as to
the source of the funds used to pay the purchase price of the
Notes to be purchased by you.
5.13. Private Offering by the Company.
Neither the Company nor anyone acting on its behalf has
offered the Notes or any similar securities for sale to, or
solicited any offer to buy any of the same from, or otherwise
approached or negotiated in respect thereof with, any person other
than you, the Other Purchasers and not more than 85 other
Instutional Investors, each of which has been offered the Notes at
a private sale for investment. Neither the Company nor anyone
acting on its behalf has taken, or will take, any action that would
subject the issuance or sale of the Notes to the registration
requirements of Section 5 of the Securities Act.
5.14. Use of Proceeds; Margin Regulations.
The Company will apply the proceeds of the sale of the Notes
to repay Indebtedness of the Company owing to banks. No part of
the proceeds from the sale of the Notes hereunder will be used,
directly or indirectly, for the purpose of buying or carrying any
margin stock within the meaning of Regulation G of the Board of
Governors of the Federal Reserve System (12 CFR 207), or for the
purpose of buying or carrying or trading in any securities under
such circumstances as to involve the Company in a violation of
Regulation X of said Board (12 CFR 224) or to involve any broker or
dealer in a violation of Regulation T of said Board (12 CFR 220).
Margin stock does not constitute more than 5% of the value of the
consolidated assets of the Company and its Subsidiaries and the
Company does not have any present intention that margin stock will
constitute more than 5% of the value of such assets. As used in
this Section, the terms "margin stock" and "purpose of buying or
carrying" shall have the meanings assigned to them in said
Regulation G.
5.15. Existing Indebtedness; Future Liens.
(a) Schedule 5.15 sets forth a complete and correct list
of all outstanding Indebtedness of the Company and its Subsidiaries
as of March 31, 1995, since which date there has been no Material
change in the amounts, interest rates, sinking funds, instalment
payments or maturities of the Indebtedness of the Company or its
Subsidiaries. Neither the Company nor any Subsidiary is in
default, and no waiver of default is currently in effect, in the
payment of any principal or interest on any Indebtedness of the
Company or such Subsidiary and no event or condition exists with
respect to any Indebtedness of the Company or any Subsidiary that
would permit (or that with notice or the lapse of time, or both,
would permit) one or more Persons to cause such Indebtedness to
become due and payable before its stated maturity or before its
regularly scheduled dates of payment.
(b) Except as disclosed in Schedule 5.15, neither the
Company nor any Subsidiary has agreed or consented to cause or
permit in the future (upon the happening of a contingency or
otherwise) any of its property, whether now owned or hereafter
acquired, to be subject to a Lien not permitted by Section 10.1.
5.16. Foreign Assets Control Regulations, etc.
Neither the sale of the Notes by the Company hereunder nor
its use of the proceeds thereof will violate the Trading with the
Enemy Act, as amended, or any of the foreign assets control
regulations of the United States Treasury Department (31 CFR,
Subtitle B, Chapter V, as amended) or any enabling legislation or
executive order relating thereto.
5.17. Status under Certain Statutes.
Neither the Company nor any Subsidiary is subject to
regulation under the Investment Company Act of 1940, as amended,
the Public Utility Holding Company Act of 1935, as amended, the
Interstate Commerce Act, as amended, or the Federal Power Act, as
amended.
5.18. Environmental Matters.
Neither the Company nor any Subsidiary has knowledge of any
claim or has received any notice of any claim, and no proceeding
has been instituted raising any claim against the Company or any of
its Subsidiaries or any of their respective real properties now or
formerly owned, leased or operated by any of them or other assets,
alleging any damage to the environment or violation of any
Environmental Laws, except, in each case, such as could not
reasonably be expected to result in a Material Adverse Effect.
Except as otherwise disclosed to you in writing prior to your
execution and delivery of this Agreement,
(a) neither the Company nor any Subsidiary has knowledge
of any facts which would give rise to any claim, public or
private, of violation of Environmental Laws or damage to the
environment emanating from, occurring on or in any way
related to real properties now or formerly owned, leased or
operated by any of them or to other assets or their use,
except, in each case, such as could not reasonably be
expected to result in a Material Adverse Effect;
(b) neither the Company nor any of its Subsidiaries has
stored any Hazardous Materials on real properties now or
formerly owned, leased or operated by any of them and has not
disposed of any Hazardous Materials in a manner contrary to
any Environmental Laws in each case in any manner that could
reasonably be expected to result in a Material Adverse
Effect; and
(c) all buildings on all real properties now owned,
leased or operated by the Company or any of its Subsidiaries
are in compliance with applicable Environmental Laws, except
where failure to comply could not reasonably be expected to
result in a Material Adverse Effect.
6. REPRESENTATIONS OF THE PURCHASER.
6.1. Purchase of Notes.
You represent that you are purchasing the Notes for your own
account or for one or more separate accounts maintained by you or
for the account of one or more pension or trust funds and not with
a view to the distribution thereof, provided that the disposition
of your or their property shall at all times be within your or
their control. You understand that the Notes have not been
registered under the Securities Act and may be resold only if
registered pursuant to the provisions of the Securities Act or if
an exemption from registration is available, except under
circumstances where neither such registration nor such an exemption
is required by law, and that the Company is not required to
register the Notes.
6.2. Source of Funds.
You represent that at least one of the following sstatements
is an accurate representation as to each source of funds (a
"Source") to be used by you to pay the purchase price of the Notes
to be purchased by you hereunder:
(a) the Source is an "insurance company general
account", as such term is defined in the proposed Prohibited
Transaction Class Exemption published on August 22, 1994 at
59 Federal Register 43, 134 et seg., and there is no "plan"
with respect to which the aggregate amount of such general
account's reserves for the contracts held by or on behalf of
such "plan" and all other "plans" maintained by the same
employer (and affiliates thereof as defined in Section V (a)
(1) of such proposed Exemption) or by the same employee
organization (in each case determined under Section 807 (d)
of the Code) exceeds or will exceed 10% of the total of all
liabilities of such general account (within the meaning of
such proposed Exemption) as of the date of the Closing; or
(b) the Source is either (i) an insurance company pooled
separate account, within the meaning of Prohibited
Transaction Exemption ("PTE") 90-1 (issued January 29, 1990),
or (ii) a bank collective investment fund, within the meaning
of the PTE 91-38 (issued July 12, 1991) and, except as you
have disclosed to the Company in writing pursuant to this
paragraph (b), no employee benefit plan or group of plans
maintained by the same employer or employee organization
beneficially owns more than 10% of all assets allocated to
such pooled separate account or collective investment fund;
or
(c) the Source constitutes assets of an "investment
fund" (within the meaning of Part V of the QPAM Exemption)
managed by a "qualified professional asset manager" or "QPAM"
(within the meaning of Part V of the QPAM Exemption), no
employee benefit plan's assets that are included in such
investment fund, when combined with the assets of all other
employee benefit plans established or maintained by the same
employer or by an affiliate (within the meaning of Section
v (c) (1) of the QPAM Exemption) of such employer or by the
same employee organization and managed by such QPAM, exceed
20% of the total client assets managed by such QPAM, the
conditions of Part I (c) and (g) of the QPAM Exemption are
satisfied, neither the QPAM nor a person controlling or
controlled by the QPAM (applying the definition of "control"
in Section V (e) of the QPAM Exemption) owns a 5% or more
interest in the Company and (i) the identity of such QPAM and
(ii) the names of all employee benefit plans whose assets are
included in such investment fund have been disclosed to the
Company in writing pursuant to this paragraph (c); or
(d) the Source is a governmental plan; or
(e) the Source is one or more employee benefit plans, or
a separate account or trust fund comprised of one or more
employee benefit plans, each of which has been identified to
the Company in writing pursuant to this paragraph (e); or
(f) the Source does not include assets of any employee
benefit plan, other than a plan exempt from the coverage of
ERISA.
As used in this Section 6.2, the terms "employee benefit plan",
"governmental plan", "party in interest" and "separate account"
shall have the respective meanings assigned to such terms in
Section 3 of ERISA.
7. INFORMATION AS TO COMPANY.
7.1. Financial and Business Information.
The Company shall deliver to each Holder of Notes that is an
Institutional Investor:
(a) Quarterly Statements -- within 60 days after the end
of each quarterly fiscal period in each fiscal year of the
Company (other than the last quarterly fiscal period of each
such fiscal year), duplicate copies of,
(i) a consolidated balance sheet of the Company and
its Subsidiaries as at the end of such quarter, and
(ii) consolidated statements of income, changes in
shareholders' equity and cash flows of the Company and
its Subsidiaries, for such quarter and (in the case of
the second and third quarters) for the portion of the
fiscal year ending with such quarter,
setting forth in each case in comparative form the figures
for the corresponding periods in the previous fiscal year,
all in reasonable detail, prepared in accordance with GAAP
applicable to quarterly financial statements generally, and
certified by a Senior Financial Officer as fairly presenting,
in all material respects, the financial position of the
companies being reported on and their results of operations
and cash flows, subject to changes resulting from year-end
adjustments, provided that delivery within the time period
specified above of copies of the Company's Quarterly Report
on Form 10-Q prepared in compliance with the requirements
therefor and filed with the Securities and Exchange
Commission shall be deemed to satisfy the requirements of
this Section 7.1(a);
(b) Annual Statements -- within 105 days after the end
of each fiscal year of the Company, duplicate copies of,
(i) a consolidated balance sheet of the Company and
its Subsidiaries as at the end of such year, and
(ii) consolidated statements of income, changes in
shareholders, equity and cash flows of the Company and
its Subsidiaries for such year,
setting forth in each case in comparative form the figures
for the previous fiscal year, all in reasonable detail,
prepared in accordance with GAAP, and accompanied
(A) by an opinion thereon of independent public
accountants of recognized national standing, which
opinion shall state that such financial statements
present fairly, in all material respects, the financial
position of the companies being reported upon and their
results of operations and cash flows and have been
prepared in conformity with GAAP, and that the
examination of such accountants in connection with such
financial statements has been made in accordance with
generally accepted auditing standards, and that such
audit provides a reasonable basis for such opinion in the
circumstances, and
(B) a certificate of such accountants stating that
they have reviewed Sections 10.2, 10.3, and 10.5 of this
Agreement and stating further whether, in making their
audit, they have become aware of any condition or event
that then constitutes a Default or an Event of Default
under said Sections, and, if they are aware that any such
condition or event then exists, specifying the nature and
period of the existence thereof (it being understood that
such accountants shall not be liable, directly or
indirectly, for any failure to obtain knowledge of any
Default or Event of Default unless such accountants
should have obtained knowledge thereof in making an audit
in accordance with generally accepted auditing standards
or did not make such an audit),
provided that the delivery within the time period specified
above of the Company's Annual Report on Form 10-K for such
fiscal year (together with the Company's annual report to
shareholders, if any, prepared pursuant to Rule 14a-3 under
the Exchange Act) prepared in accordance with the
requirements therefor and filed with the Securities and
Exchange Commission, together with the accountant's
certificate described in clause (B) above, shall be deemed
to satisfy the requirements of this Section 7.1(b);
(c) SEC and Other Reports -- promptly upon their
becoming available, one copy of (i) each financial statement,
report, notice or proxy statement sent by the Company or any
Subsidiary generally to its shareholders or to its creditors
(other than the Company or another Subsidiary), and (ii) each
regular or periodic report, each registration statement
(without exhibits except as expressly requested by such
holder), and each prospectus and all amendments thereto filed
by the Company or any Subsidiary with the Securities and
Exchange Commission and of each press release and other
statement made available generally by the Company or any
Subsidiary to the public concerning developments that are
Material;
(d) Notice of Default or Event of Default -- promptly,
and in any event within five days after a Responsible Officer
becoming aware of the existence of any Default or Event of
Default, or that any person has given notice or taken any
action with respect to a clalim default hereunder or that any
Person has given any notice or taken any action with respect
to a clalim default of the type referred to in Section 11
(f), a written notice specifying the nature and period of
existence thereof and what action the Company is taking or
proposes to take with respect thereto;
(e) ERISA Matters -- promptly, and in any event within
five days after a Responsible Officer becoming aware of any
of the following, a written notice setting forth the nature
thereof and the action, if any, that the Company or an ERISA
Affiliate proposes to take with respect thereto:
(i) with respect to any Plan, any reportable event,
as defined in section 4043(b) of ERISA and the
regulations thereunder, for which notice thereof has not
been waived pursuant to such regulations as in effect on
the date hereof; or
(ii) the taking by the PBGC of steps to institute,
or the threatening by the PBGC of the institution of,
proceedings under section 4042 of ERISA for the
termination of, or the appointment of a trustee to
administer, any Plan, or the receipt by the Company or
any ERISA Affiliate of a notice from a Multiemployer Plan
that such action has been taken by the PBGC with respect
to such Multiemployer Plan; or
(iii) any event, transaction or condition that
could result in the incurrence of any liability by the
Company or any ERISA Affiliate pursuant to Title I or IV
of ERISA or the penalty or excise tax provisions of the
Code relating to employee benefit plans, or in the
imposition of any Lien on any of the rights, properties
or assets of the Company or any ERISA Affiliate pursuant
to Title I or IV of ERISA or such penalty or excise tax
provisions, if such liability or Lien, taken together
with any other such liabilities or Liens then existing,
could reasonably be expected to have a Material Adverse
Effect;
(f) Accountants Reports -- promptly, and in any event
within 30 days of receipt thereof by a Responsible Officer
of the Company, copies of any report as to material
inadequacies in accounting controls submitted by independent
accountants in connection with any audit of the Company or
any Subsidiary;
(g) Material Litigation -- promptly, and in any event
within 30 days after a Responsible Officer of the Company
becomes aware of any litigation, arbitration or
administrative proceedings, affecting the Company or any of
its Subsidiaries and which, if adversely determined, could
be reasonably expected to have a Material Adverse Effect, a
written statement of a Responsible Officer describing the
nature and status of such matters and what action the Company
or a Subsidiary has taken, is taking or proposes to take with
respect thereto;
(h) Notices from Governmental Authority -- promptly, and
in any event within 30 days of receipt thereof, copies of any
notice to the Company or any Subsidiary from any Federal or
state Governmental Authority relating to any order, ruling,
statute or other law or regulation that could reasonably be
expected to have a Material Adverse Effect;
(i) Requested Information -- with reasonable promptness,
such other data and information relating to the business,
operations, affairs, financial condition, assets or
properties of the Company or any of its Subsidiaries or
relating to the ability of the Company to perform its
obligations hereunder and under the Notes as from time to
time may be reasonably requested by any such holder of Notes.
7.2. Officer's Certificate.
Each set of financial statements delivered to a holder of
Notes pursuant to Section 7.1(a) or Section 7.1(b) shall be
accompanied by a certificate of a Senior Financial Officer setting
forth:
(a) Covenant Compliance -- the information (including
detailed calculations) required in order to establish whether
the Company was in compliance with the requirements of
Sections 10.2 and 10.3 during the quarterly or annual period
covered by the statements then being furnished (including
with respect to each such Section, where applicable, the
calculations of the maximum or minimum amount, ratio or
percentage, as the case may be, permissible under the terms
of such Sections, and the calculation of the amount, ratio
or percentage then in existence); and
(b) Default -- a statement that such Senior Financial
Officer has reviewed the relevant terms hereof and has made,
or caused to be made, under his or her supervision, a review
of the transactions and conditions of the Company and its
Subsidiaries from the beginning of the quarterly or annual
period covered by the statements then being furnished to the
date of the certificate and that such review shall not have
disclosed the existence during such period of any condition
or event that constitutes a Default or an Event of Default
or, if any such condition or event existed or exists
(including, without limitation, any such event or condition
resulting from the failure of the Company or any Subsidiary
to comply with any Environmental Law), specifying the nature
and period of existence thereof and what action the Company
shall have taken or proposes to take with respect thereto.
7.3. Inspection.
The Company shall permit the representatives of each holder
of Notes that is an Institutional Investor:
(a) No Default -- if no Default or Event of Default then
exists, at the expense of such holder and upon reasonable
prior notice to the Company, to visit the principal executive
office of the Company, to discuss the affairs, finances and
accounts of the Company and its Subsidiaries with the
Company's officers, and (with the consent of the Company,
which consent will not be unreasonably withheld) its
independent public accountants, and (with the consent of the
Company, which consent will not be unreasonably withheld) to
visit the other offices and properties of the Company and
each Subsidiary, all at such reasonable times and as often
as may be reasonably requested in writing; and
(b) Default -- if a Default or Event of Default then
exists, at the expense of the Company, to visit and inspect
any of the offices or properties of the Company or any
Subsidiary, to examine all their respective books of account,
records, reports and other papers, to make copies and
extracts therefrom, and to discuss their respective affairs,
finances and accounts with their respective officers,
employees and independent public accountants (and by this
provision the Company authorizes said accountants to discuss
the affairs, finances and accounts of the Company and its
Subsidiaries), all at such times and as often as may be
requested.
8. PREPAYMENT OF THE NOTES.
In addition to the payment of the entire unpaid principal
amount of the Notes at the final maturity thereof, the Company will
make required prepayments in respect of the Notes, and under
certain circumstances may be required to offer to prepay all Notes,
as hereinafter provided.
8.1. Required Prepayments.
(a) Series A Notes. On June 15, 1999 and June 15, 2000
the Company will prepay $6,000,000 principal amount (or such lesser
principal amount as shall then be outstanding) of the Series A
Notes, such prepayment to be made at the principal amount to be
prepaid, together with accrued interest thereon to the date of
payment, without premium and allocated as provided in Section 8.3,
provided that upon any partial prepayment of the Series A Notes
pursuant to Section 8.2 or purchase of Series A Notes permitted by
Section 8.5, the principal amount of each required prepayment of
the Series A Notes becoming due under this Section 8.1 (a) on and
after the date of such prepayment or purchase shall be reduced in
the same proportion as the aggregate unpaid principal amount of the
Notes is reduced as a result of such prepayment or purchase.
(b) Series B Notes. On September 15, 1997 and on each
Interest Payment Date thereafter to and including March 15, 2000
the Company will prepay $834,000 principal amount (or such lesser
principal amount as shall then be outstanding) of the Series B
Notes, such prepayment to be made at the principal amount to be
prepaid, together with accrued interest thereon to the date of such
prepayment, without premium and allocated as provided in Section
8.3, provided that upon any partial prepayment of the Series B
Notes pursuant to Section 8.2 or purchase of Series B Notes
permitted by Section 8.5, the principal amount of each required
prepayment of the Series B Notes becoming due under this Section
8.1 (b) on and after the date of such prepayment or purchase shall
be reduced in the same proportion as the aggregate unpaid principal
amount of the Notes is reduced as a result of such prepayment or
purchase.
8.2. Prepayment in Connection with a Change of Control.
Promptly and in any event within five Business Days after the
occurrence of a Change of Control, the Company will give written
notice thereof to the Holders of all outstanding Notes, which
notice shall (a) refer specifically to this Section 8.2, (b)
describe the Change of Control in reasonable detail and specify the
Change of Control Prepayment Date and the Response Date (as
respectively defined below) in respect thereof, and (c) offer to
prepay all Notes at the price for each series specified below on
the date therein specified (the "Change of Control Prepayment
Date"), which shall be not less than 10 nor more than 30 days after
the date of such notice, and (d) specify the estimated Make-Whole
Amount that would be due in connection with such prepayment of the
Series A Notes (calculated as if the date of such notice were the
Change of Control Prepayment Date), including details of such
calculation. In the event that the Company shall fail to give any
notice required above within five Business Days after being
requested to do so by the holder of any Note, such holder may give
such notice (with a copy thereof to the Company), which notice
shall have the same effect as if given by the Company. Each holder
of a Note will notify the Company of such holder's acceptance or
rejection of such offer by giving written notice of such acceptance
or rejection to the Company at least five days prior to the Change
of Control Prepayment Date (the "Response Date"), except that the
failure by any such holder to respond in writing to such offer on
or before the Response Date shall be deemed to be an acceptance of
such offer by such holder in respect of such Change of Control.
The Company shall prepay on the Change of Control Prepayment Date
all of the Notes held by the holders as to which such offer has
been so accepted, at the principal amount of each such Note,
together with interest accrued thereon to the Change of Control
Prepayment Date, plus (i) in the case of each Series A Note an
amount equal to the Make-Whole Amount, if any, with respect to such
Series A Note and (ii) in the case of each Series B Note, a premium
equal to 3% of such principal amount and (unless the Change of
Control Prepayment Date is the last day of an Interest Period) an
amount equal to the LIBOR Funding Loss Amount, if any, with respect
to such Series B Note, as described in the final paragraph of this
Section 8.2. If any holder shall reject such offer, such holder
shall be deemed to have waived its rights under this Section 8.2 to
require prepayment of all Notes held by such holder in respect of
such Change of Control but not in respect of any subsequent Change
of Control.
Two Business Days prior to the Change of Control Prepayment
Date, the Company shall deliver to each holder of a Series A Note
a certificate of a Senior Financial Officer specifying the
calculation of the Make-Whole Amount for such Series A Notes as of
the Change of Control Prepayment Date. If for any reason an
Institutional Investor holder of Series A Note, by notice to the
Company, objects to such calculation of the Make-Whole Amount, the
Make-Whole Amount calculated by such holder and specified in such
notice shall be final and binding upon the Company absent manifest
error. If any Institutional Investor holder of a Series A Note
shall give a notice specified in the preceding sentence, the
Company will forthwith provide a copy of such notice to all other
holders of outstanding Series A Notes.
If the Change of Control Prepayment Date does not occur on
the last day of an Interest Period, the Company shall also pay each
holder of a Series B Note then being prepaid an amount equal to the
LIBOR Funding Loss Amount with respect to such Series B Note, as
specified by written notice given by the holder of such Series B
Note at least two Business Days prior to the Change of Control
Prepayment Date (or, if such notice is subsequently given by such
holder, within two Business Days after receipt of such notice by
the Company). The obligation of the Company to pay such LIBOR
Funding Loss Amount with respect to the prepayment of any Series B
Note pursuant to this Section 8.2 shall survive the prepayment of
such Series B Note and the termination of this Agreement.
8.3. Allocation of Partial Prepayments.
In the case of each partial prepayment of the Notes of either
series, the principal amount of the Notes of such series to be
prepaid shall be allocated among all of the Notes of such series at
the time outstanding in proportion, as nearly as practicable, to
the respective unpaid principal amounts thereof.
8.4. Maturity; Surrender, etc.
In the case of each prepayment of Notes pursuant to this
Section 8, the principal amount of each Note to be prepaid shall
mature and become due and payable on the date fixed for such
prepayment, together with interest on such principal amount accrued
to such date and the application Make-Whole Amount, if any. From
and after such date, unless the Company shall fail to pay such
principal amount when so due and payable, together with the
interest and Make-Whole Amount, if any, as aforesaid, interest on
such principal amount shall cease to accrue. Any Note paid or
prepaid in full shall be surrendered to the Company and cancelled
and shall not be reissued, and no Note shall be issued in lieu of
any prepaid principal amount of any Note.
8.5. Purchase of Notes.
The Company will not and will not permit any Affiliate to
purchase, redeem, prepay or otherwise acquire, directly or
indirectly, any of the outstanding Notes except (a) upon the
payment or prepayment of the Notes in accordance with the terms of
this Agreement and the Notes or (b) pursuant to an offer made by
the Company or any such Affiliate to the holders of all Notes at
the time outstanding to purchase Notes on the same terms and
conditions (except for such difference in the offering price that
reflect the interest rates and maturities of the Notes of the
respective series), pro rata among all Notes tendered, which offer
shall remain outstanding for a reasonable period of time (not to be
less than 30 days).
Any Notes so repurchased or redeemed shall immediately upon
acquisition thereof be cancelled and no Notes shall be issued in
substitution or exchange therefor.
Promptly and in any event within five Business Days after
each such purchase or redemption of Notes, the Company will furnish
each holder of the Notes with a certificate of a Senior Financial
Officer describing such purchase (including the aggregate principal
amount of Notes of each series so purchased and the purchase price
therefor) and certifying that such purchase was made in compliance
with the requirements of this Section.
8.6. Make-Whole Amount.
The term "Make-Whole Amount" means, with respect to any
Series A Note, an amount equal to the excess, if any, of the
Discounted Value of the Remaining Scheduled Payments with respect
to the Called Principal of such Series A Note over the amount of
such Called Principal, provided that the Make-Whole Amount may in
no event be less than zero. For the purposes of determining the
Make-Whole Amount, the following terms have the following meanings:
"Called Principal" means, with respect to any Series A
Note, the principal of such Series A Note that is to be
prepaid pursuant to Section 8.2 or has become or is declared
to be immediately due and payable pursuant to Section 12.1
as the context requires.
"Discounted Value" means, with respect to the Called
Principal of any Series A Note, the amount obtained by
discounting all Remaining Scheduled Payments with respect to
such Called Principal from their respective scheduled due
dates to the Settlement Date with respect to such Called
Principal, in accordance with accepted financial practice and
a discount factor (applied on the same periodic basis as that
on which interest on the Series A Notes is payable) equal to
the Reinvestment Yield with respect to such Called Principal.
"Reinvestment Yield" means, with respect to the Called
Principal of any Note, the yield to maturity implied by (i)
the yields reported, as of 10:00 A.M. (New York City time)
on the second Business Day preceding the Settlement Date with
respect to such Called Principal, on the display designated
as "Page 500" on the Telerate Access Service (or other such
display as may replace Page 500 on Telerate Access Service)
for actively traded U.S. Treasury securities having a
maturity equal to the Remaining Average Life of such Called
Principal as of such Settlement Date, or (ii) if such yields
are not reported as of such time or the Yields reported as
of such time are not ascertainable, the Treasury Constant
Maturity Series Yields reported, for the latest day for which
such yields have been so reported as of the second Business
Day preceding the Settlement Date with respect to such Called
Principal, in Federal Reserve Statistical Release H.15 (519)
(or any comparable successor publication) for actively traded
U.S. Treasury securities having a constant maturity equal to
the Remaining Average Life of such Called Principal as of
such Settlement Date. Such implies yield will be determined,
if necessary, by (a) converting U.S. Treasury bill quotations
to bond-equivalent yields in accordance with accepted
financial practice and (b) interpolating linearly between (1)
the actively traded U. S. Treasury security with a maturity
closest to and less than the Remaining Average Life and (2)
the actively traded U.S. Treasury security with a maturity
closest to and less than the Remaining Average Life.
"Remaining Average Life" means, with respect to any
Called Principal, the number of years (calculated to the
nearest one-twelfth year) obtained by dividing (i) such
Called Principal into (ii) the sum of the products obtained
by multiplying (a) the principal component of each Remaining
Scheduled Payment with respect to such Called Principal by
(b) the number of years (calculated to the nearest one-
twelfth year) that will elapse between the Settlement Date
with respect to such Called Principal and the scheduled due
date of such Remaining Scheduled Payment.
"Remaining Scheduled Payments" means, with respect to the
Called Principal of any Series A Note, all payments of such
Called Principal and interest thereon that would be due after
the Settlement Date with respect to such Called Principal if
no payment of such Called Principal were made prior to its
scheduled due date, provided that if such Settlement Date is
not a date on which interest payments are due to be made
under the terms of the Series A Notes, then the amount of the
next succeeding scheduled interest payment will be reduced
by the amount of interest accrued to such Settlement Date and
required to be paid on such Settlement Date pursuant to
Section 8.2 or 12.1.
"Settlement Date" means, with respect to the Called
Principal of any Note, the date on which such Called
Principal is to be prepaid pursuant to Section 8.2 or has
become or is declared to be immediately due and payable
pursuant to Section 12.1, as the context requires.
9. AFFIRMATIVE COVENANTS.
The Company covenants that so long as any of the Notes are
outstanding:
9.1. Compliance with Law.
The Company will and will cause each of its Subsidiaries to
comply with all laws, ordinances or governmental rules or
regulations to which each of them is subject, including without
limitation Environmental Laws, and will obtain and maintain in
effect all licenses, certificates, permits, franchises and other
governmental authorizations necessary to the ownership of their
respective properties or to the conduct of their respective
businesses, in each case to the extent necessary to ensure that
non-compliance with such laws, ordinances or governmental rules or
regulations or failures to obtain or maintain in effect such
licenses, certificates, permits, franchises and other governmental
authorizations could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
9.2. Insurance.
The Company will and will cause each of its Subsidiaries to
maintain, with financially sound and reputable insurers rated "A"
or better by A.M. Best Company, Inc., insurance with respect to
their respective properties and businesses against such casualties
and contingencies, of such types, on such terms and in such amounts
(including deductibles and co-insurance) as is customary in the
case of entities of established reputations engaged in the same or
a similar business and similarly situated.
9.3. Maintenance of Properties.
The Company will and will cause each of its Subsidiaries to
maintain and keep, or cause to be maintained and kept, their
respective properties in good repair, working order and condition
(other than ordinary wear and tear), so that the business carried
on in connection therewith may be properly conducted at all times,
provided that this Section shall not prevent the Company or any
Subsidiary from discontinuing the operation and the maintenance of
any of its properties if such discontinuance is desirable in the
conduct of its business and the Company has concluded that such
discontinuance could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
9.4. Payment of Taxes and Claims.
The Company will and will cause each of its Subsidiaries to
file all tax returns required to be filed in any jurisdiction and
to pay and discharge all taxes shown to be due and payable on such
returns and all other taxes, assessments, governmental charges, or
levies imposed on them or any of their properties, assets, income
or franchises, to the extent such taxes and assessments have become
due and payable and before they have become delinquent and all
claims for which sums have become due and payable that have or
might become a Lien on properties or assets of the Company or any
Subsidiary, provided that neither the Company nor any Subsidiary
need pay any such tax or assessment or claim if (i) the amount,
applicability or validity thereof is contested by the Company or
such Subsidiary on a timely basis in good faith and in appropriate
proceedings, and the Company or a Subsidiary has established
adequate reserves therefor in accordance with GAAP on the books of
the Company or such Subsidiary or (ii) the nonpayment of all such
taxes and assessments in the aggregate could not reasonably be
expected to have a Material Adverse Effect.
9.5. Corporate Existence, etc.
The Company will at all times preserve and keep in full force
and effect its corporate existence. Subject to Sections 10.5 and
10.6, the Company will at all times preserve and keep in full force
and effect the corporate existence of each of its Subsidiaries
(unless merged into the Company or a Subsidiary) and all rights and
franchises (as franchises) of the Company and its Subsidiaries
unless, in the good faith judgment of the Company, the termination
of or failure to preserve and keep in full force and effect such
corporate existence, right or franchise could not, individually or
in the aggregate, have a Material Adverse Effect.
9.6. Lines of Business.
The Company and its Subsidiaries will remain engaged solely
in the business of owning and operating family
restaurant/entertainment centers (as described in the Memorandum),
and other businesses directly related thereto.
10. NEGATIVE COVENANTS.
The Company covenants that so long as any of the Notes are
outstanding:
10.1. Liens.
(a) The Company will not, and will not permit any Subsidiary
to create, assume, incur or suffer to exist any Lien upon or with
respect to any property or assets, whether now owned or hereafter
acquired, securing any Indebtedness, provided that nothing in this
Section 10.1 shall prohibit
(i) Liens in respect of property of the Company or a
Subsidiary existing on the date of the Closing and described
in Schedule 5.15, and Liens relating to any extension,
renewal or replacement of Indebtedness secured by any such
Lien as described in Schedule 5.15, provided that the
principal amount of Indebtedness secured by any such Lien is
not increased and such Lien does not extend to or cover any
property of the Company or such Subsidiary, as the case may
be, other than the property covered by such Lien on the date
of Closing;
(ii) Liens in respect of property acquired by the Company
or a Subsidiary after the date of Closing, (A) existing on
such property at the time of acquisition thereof (and not
incurred in anticipation thereof), whether or not the
Indebtedness secured thereby is assumed by the Company or a
Subsidiary, or (B) created within 180 days after acquisition
or completion of construction of improvements on such
property, to secure Indebtedness assumed or incurred to
finance all or any part of the purchase price or cost of
construction of improvements on such property, or (C) in the
case of any Person that hereafter becomes a Subsidiary or is
consolidated with or merged with or into the Company or a
Subsidiary or sells, leases or otherwise disposes of all or
substantially all of its property to the Company or a
Subsidiary, existing at the time such Person becomes a
Subsidiary or is so consolidated or merged or effects such
sale, lease or other disposition of property (and not
incurred in anticipation thereof), provided that in any such
case
(x) no such Lien shall extend to or cover any other
property of the Company or such Subsidiary, as the case
may be,
(y) the aggregate principal amount of Indebtedness
secured by all such Liens in respect of any such property
shall not exceed the cost of such property at the time of
such acquisition or, in the case of a Lien in respect of
property existing at the time of such Person becoming a
Subsidiary or being so consolidated or merged or
effecting such sale, lease or other disposition, the fair
market value of such property at such time, and
(z) no Lien may be created pursuant to subclause
(B) above prior to December 31, 1996;
(iii) Liens securing Indebtedness owed by a Subsidiary to
the Company or to a Wholly-Owned Subsidiary; and
(iv) Liens securing reimbursement obligations in connection
with letters of credit obtained by the Company or a
Subsidiary, provided that the aggregate unpaid principal
amount of Indebtedness in respect of such letters of credit
secured by such Liens permitted by this Section 10.1(a)(iv)
does not at any time exceed $5,000,000.
For purposes of this Section 10.1(a) any Lien existing in respect
of property at the time such property is acquired or in respect of
property of a Person at the time such Person is acquired,
consolidated or merged with or into the Company or a Subsidiary
shall be deemed to have been created at that time.
(b) In case any property is subjected to a Lien in violation
of Section 10.1(a), the Company will make or cause to be made
effective provision whereby the Notes will be secured equally and
ratably with all Indebtedness and other obligations secured by such
Lien, and in any case the Notes shall have the benefit, to the full
extent that, and with such priority as, the holders of Notes may be
entitled thereto under applicable law, of an equitable lien on such
property securing the Notes. Such violation of Section 10.1(a)
shall constitute an Event of Default hereunder, whether or not any
such provision is made pursuant to this Section 10.1(b).
10.2. Maintenance of Financial Conditions.
(a) The Company will not at any time prior to the last day
of the fiscal year ending on or about December 31, 1995 permit
Consolidated Net Worth to be less than $115,000,000 and thereafter
the Company will not at any time permit Consolidated Net Worth to
be less than the sum of (i) $115,000,000 plus (ii) 75% of
Consolidated Net Income for each fiscal year ending after the date
of the Closing (but without any deduction for any consolidated net
loss in any fiscal year) plus (iii) 100% of the net cash proceeds
of all sales of equity securities by the Company after the date of
the Closing.
(b) The Company will not permit the sum of EBITDA plus
Consolidated Operating Lease Rentals for the periods of two and
three consecutive quarterly accounting periods respectively ending
on or about June 30 and September 30, 1995 to be less than 150% of
Consolidated Interest Expense plus Consolidated Operating Lease
Rentals for such periods, and thereafter the Company will not
permit the sum of EBITDA plus Consolidated Operating Lease Rentals
for any period of four consecutive quarterly accounting periods to
be less than the applicable percentage of the sum of Consolidated
Interest Expense plus Consolidated Operating Lease Rentals for such
periods specified below:
Four Quarterly Accounting Applicable
Periods Ending on or About Percentage
-------------------------- -----------
December 31, 1995 to September 30, 1996 150%
thereafter to September 30, 1997 175%
thereafter 200%
(c) The Company will not permit Consolidated Indebtedness as
of the last of any quarterly accounting period (commencing with
such accounting period ending on or about June 30, 1995) to exceed
175% of EBITDA for the four consecutive quarterly accounting
periods then ended.
10.3. Asset Sales.
The Company will not and will not permit any Subsidiary to,
directly or indirectly, make any sale, transfer, lease (as lessor),
loan or other disposition of any property or assets (an "Asset
Sale") other than
(a) Asset Sales in the ordinary course of business,
(b) Asset Sales of property or assets by a Subsidiary to the
Company or a Wholly-Owned Subsidiary or a Person then becoming
a Wholly-Owned Subsidiary,
(c) Asset Sales consisting of the Company's investment as of
the date of this Agreement in shares or Indebtedness issued by
Monterey Acquisition Corp., the owner of Monterey Tex-Mex
Restaurants, and
(d) other Asset Sales, provided that
(i) immediately before and after giving effect to each
such Asset Sale, no Default or Event of Default shall
have occurred and be continuing,
(ii) the aggregate net book value of property or assets
disposed of in each such Asset Sale and all other Asset
Sales by the Company and its Subsidiaries (A) during the
immediately preceding twelve months does not exceed 5% of
Consolidated Capitalization and (B) during the period
from the date of the Closing to and including the
effective date of such proposed Asset Sale does not
exceed 10% of Consolidated Capitalization (in each case
determined as of the last day of the quarterly accounting
period ending on or most recently prior to the effective
date of such proposed Asset Sale), and
(iii) such Asset Sales in the aggregate shall not
involve a substantial number of Chuck E. Cheese's
restaurants (except in connection with closings in the
ordinary course of business) or any intangible assets
related to Chuck E. Cheese's restaurants generally,
and provided further that for purposes of clause (ii) above
there shall be excluded the net book value of property or
assets disposed of in an Asset Sale if and to the extent such
Asset Sale is made for cash, payable in full upon the
completion of such Asset Sale, and an amount equal to the net
proceeds realized upon such Asset Sale is applied by the
Company or such Subsidiary, as the case may be, within one
year after the effective date of such Asset Sale (x) to
reinvest in similar categories of property or assets for use
in the business of the Company and its Subsidiaries (but not
in a transaction Permitted by Section 10.1(a)(ii)) or (y) to
repay Indebtedness (which may, include the purchase of Notes
pursuant to an offer to purchase Notes pursuant to
Section 8.5).
For purposes of this Section 10.3 any shares of Voting Stock
of a Subsidiary that are the subject of an Asset Sale shall be
valued at the greater of (1) the fair market value of such shares
as determined in good faith by the Board of Directors of the
Company and (2) the aggregate net book value of the assets of such
Subsidiary multiplied by a fraction of which the numerator is the
aggregate number of shares of Voting Stock of such Subsidiary
disposed of in such Asset Sale and the denominator is the aggregate
number of shares of Voting Stock of such Subsidiary outstanding
immediately prior to such Asset Sale.
10.4. Merger, Consolidation, etc.
The Company will not and will not permit any Subsidiary to
consolidate with or merge with any other corporation or convey,
transfer or lease all or substantially all of its assets in a
single transaction or series of transactions to any Person except:
(a) a Subsidiary may consolidate with or merge with, or
convey or transfer all or substantially all of its assets to
(i) the Company (provided that the Company shall be the
continuing or surviving corporation) or a then existing
Wholly-Owned Subsidiary, or
(ii) any Person in an Asset Sale involving all of the
outstanding stock or all or substantially all of the
assets of such Subsidiary, in either case subject to the
limitations of Section 10.3 and to the further
requirement that such Subsidiary does not at the time of
such Asset Sale own, directly or indirectly, any shares
of capital stock or any Indebtedness of any other
Subsidiary not simultaneously being sold as part of such
Asset Sale; and
(b) the Company may consolidate with or merge with any other
corporation or convey or transfer all or substantially all
of its assets to a solvent corporation organized and existing
under the laws of the United States or any state thereof,
provided that
(i) if the Company is not the continuing, surviving or
acquiring corporation (the "surviving corporation"), the
surviving corporation shall have (A) executed and
delivered to each holder of a Note its assumption
(pursuant to documentation in form and substance
reasonably satisfactory to the Required Holders) of the
due and punctual performance and observance of all
obligations of the Company under this Agreement, the
Other Agreements and the Notes and (B) caused to be
delivered to each holder of a Note an opinion of counsel
reasonably satisfactory to the Required Holders to the
effect that all agreements or instruments effecting such
assumption are enforceable in accordance with their terms
and comply with the terms hereof, and
(ii) immediately after giving effect to such
transaction, no Default or Event of Default shall have
occurred and be continuing and, if applicable, the
Company shall have given any notice required in
connection with such transaction under Section 8.2.
No such conveyance, transfer or lease of substantially all of the
assets of the Company shall have the effect of releasing the
Company or any successor corporation that shall theretofore have
become such in the manner prescribed in this Section 10.4 from its
liability under this Agreement or the Notes.
10.5. Subsidiary Indebtedness.
The Company will not permit any Subsidiary to create, assume,
incur, guarantee or otherwise become liable in respect of any
Indebtedness except
(a) Indebtedness securing Liens permitted by clause (i),
(ii) or (iii) of Section 10.1(a), and
(b) Indebtedness of a Wholly-Owned Subsidiary owing to
the Company or another Wholly-Owned Subsidiary.
For purposes of this Section 10.5, a Subsidiary shall be deemed to
have incurred Indebtedness in respect of any obligation previously
owed to the Company or to a Wholly-Owned Subsidiary on the date the
obligee ceases for any reason to be the Company or a Wholly-Owned
Subsidiary and a Person that hereafter becomes a Subsidiary shall
be deemed at that time to have incurred all of its outstanding
Indebtedness.
10.6. Transactions with Affiliates.
The Company will not and will not permit any Subsidiary to
enter into directly or indirectly any transaction or Material group
of related transactions (including without limitation the purchase,
lease, sale or exchange of properties of any kind or the rendering
of any service) with any Affiliate (other than the Company or
another Subsidiary), except in the ordinary course and pursuant to
the reasonable requirements of the Company's or such Subsidiary's
business and upon fair and reasonable terms no less favorable to
the Company or such Subsidiary than would be obtainable in a
comparable arm's-length transaction with a Person not an Affiliate.
10.7. Additional Covenants and Events of Default.
If the company or any Subsidiary shall at any time after the
Closing and prior to January 1, 1996 enter into any agreement
relating to Indebtedness with any party (the "Other Lender") that
requires the Company or such Subsidiary to comply with financial
covenants that are in addition to or more restrictive that the
financial covenants in this Agreement at the time, or that permits
the Other Lender to accelerate or require the Company or such
Subsidiary to purchase or repay such Indebtedness prior to its
stated maturity by reason of a default or event of default that is
in addition to or more restrictive than the Defaults or Events of
Default specified in t his Agreement at the time (in any such case
howsoever described in such agreement), each covenant, event of
default or other agreement (as amended or modified from time to
time thereafter) shall be deemed to be incorporated by reference in
this Agreement, mutatis mutandis, as if then and thereafter set
forth herein in full. Promptly after entering into any such
agreement (or any amendment or modification thereof) the Company
will furnish a copy thereof (or a copy of the covenant, event of
default or other provision that is incorporated by reference in
this Agreement as aforesaid) to each holder of the Notes.
11. EVENTS OF DEFAULT.
An "Event of Default" shall exist if any of the following
conditions or events shall occur and be continuing:
(a) the Company defaults in the payment of any principal or
Make-Whole Amount, if any, or premium on any Note when the
same becomes due and payable, whether at maturity or at a
date fixed for prepayment or by declaration or otherwise; or
(b) the Company defaults in the payment of any interest on
any Note for more than five Business Days after the same
becomes due and payable; or
(c) the Company defaults in the performance of or compliance
with any term contained in Section 7.1(d), Section 8.2 or
Section 10.1 to 10.5, inclusive; or
(d) the Company defaults in the performance of or compliance
with any term contained herein (other than those referred to
in paragraphs (a), (b) and (c) of this Section 11) and such
default is not remedied within 30 days after the earlier of
(i) a Responsible Officer obtaining actual knowledge of such
default and (ii) the Company receiving written notice of such
defalut from any holder of a Note (any such written notice
to be identified as a "notice of defalut" and to refer
specifically to this paragraph (d); or
(e) any representation or warranty made in writing by or on
behalf of the Company or by any officer of the Company in
this Agreement or in any writing furnished in connection with
the transactions contemplated hereby proves to have been
false or incorrect in any material respect on the date as of
which made; or
(f) (i) the Company or any Subsidiary is in default (as
principal or as guarantor or other surety) in the payment of
any principal of or premium or make-whole amount or interest
on any Indebtedness (other than the Notes) that is
outstanding in an aggregate principal amount of at least
$1,000,000 beyond any period of grace provided with respect
thereto, or (ii) the Company or any Subsidiary is in default
in the performance of or compliance with any term of any
evidence of any Indebtedness in an aggregate outstanding
principal amount of at least $1,000,000 or of any mortgage,
indenture or other agreement relating thereto or any other
condition exists, and as a consequence of such default or
condition such Indebtedness has become, or has been declared,
or one or more Persons are entitled to declare such
Indebtedness to be, due and payable before its stated
maturity or before its regularly scheduled dates of payment,
or (iii) as a consequence of the occurrence or continuation
of any event or condition (other than the passage of time or
the right of the holder of Indebtedness to convert such
Indebtedness into equity interests), (X) the Company or any
Subsidiary has become obligated to purchase or repay
Indebtedness before its regular maturity or before its
regularly scheduled dates of payment in an aggregate
outstanding principal amount of at least $1,000,000, or (y)
one or more Persons have the right to require the Company or
any Subsidiary so to purchase or repay such Indebtedness; or
(g) the Company or any Subsidiary (i) is generally not
paying, or admits in writing its inability to pay, its debts
as they become due, (ii) files, or consents by answer or
otherwise to the filing against it of, a petition for relief
or reorganization or arrangement or any other petition in
bankruptcy, for liquidation or to take advantage of any
bankruptcy, insolvency, reorganization, moratorium or other
similar law of any jurisdiction, (iii) makes an assignment
for the benefit of its creditors, (iv) consents to the
appointment of a custodian, receiver, trustee or other
officer with similar powers with respect to it or with
respect to any substantial part of its property, (v) is
adjudicated as insolvent or to be liquidated, or (vi) takes
corporate action for the purpose of any of the foregoing; or
(h) a court or governmental authority of competent
jurisdiction enters an order appointing, without consent by
the Company or any Subsidiary, a custodian, receiver, trustee
or other officer with similar powers with respect to it or
with respect to any substantial part of its property, or
constituting an order for relief or approving a petition for
relief or reorganization or any other petition in bankruptcy
or for liquidation or to take advantage of any bankruptcy or
insolvency law of any jurisdiction, or ordering the
dissolution, winding-up or liquidation of the Company or any
Subsidiary, or any such petition shall be filed against the
Company or any Subsidiary and such petition shall not be
dismissed within 60 days; or
(i) a final judgment or judgments for the payment of money
aggregating in excess of $500,000 are rendered against one
or more of the Company and its Subsidiaries which judgments
are not, within 60 days after entry thereof, bonded, paid,
discharged or stayed pending appeal, or are not discharged
within 60 days after the expiration of such stay; or
(j) if (i) any Plan shall fail to satisfy the minimum
funding standards of ERISA or the Code for any plan year or
part thereof or a waiver of such standards or extension of
any amortization period is sought or granted under section
412 of the Code, (ii) a notice of intent to terminate any
Plan shall have been or is reasonalby expected to be filed
with the PBGC or the PBGC shall have instituted proceedings
under ERISA section 4042 to terminate or appoint a trustee
to administer any Plan or the PBGC shall have notified the
Company or any ERISA Affiliate that a Plan may become a
subject of any such proceedings, (iii) the aggregate "amount
of unfunded benefit liabilities" (within the meaning of
section 4001 (a) (18) of ERISA under all Plans, determined
in accordance with Title IV of ERISA, shall exceed
$1,000,000, (iv) the Company or any ERISA Affiliate shall
have incurred or is reasonably expected to incur any
liability pursuant to Title I or IV of ERISA or the penalty
or excise tax provisions of the Code relating to employee
benefit plans, (v) the Company or any ERISA Affiliate
withdraws from any Multiemployer Plan, or (vi) the Company
or any Subsidiary establishes or amends any employee welfare
benefit plan that provides post-employment welfare benefits
in a manner that would increase the liability of the Company
or any Subsidiary thereunder; and any such event or events
described in clauses (i) through (vi) above, either
individually or together with any other such event or events,
could reasonably be expected to have a Material Adverse
Effect.
As used in Section 11 (j), the terms "employee benefit plan" and
"employee welfare benefit plan" shall have the respective meanings
assigned to such terms in Section 3 of ERISA.
12. REMEDIES ON DEFAULT, ETC.
12.1. Acceleration.
(a) If an Event of Default with respect to the Company
described in paragraph (g) or (h) of Section 11 has occurred, all
the Notes then outstanding shall automatically become immediately
due and payable.
(b) If any other Event of Default has occurred and is
continuing, the Required Holders of the Notes of either series may
at any time at its or their option, by notice or notices to the
Company, declare all the Notes of such series at the time
outstanding to be immediately due and payable.
(c) If any Event of Default described in paragraph (a) or
(b) of Section 11 has occurred and is continuing, any holder or
holders of Notes at the time outstanding affected by such Event of
Default may at any time, at its or their option, by notice or
notices to the Company, declare all the Notes held by it or them to
be immediately due and payable; and if the Required Holders of the
Note of either series declare all the Notes of such series to be
due and payable pursuant to paragraph (b) above, any holder or
holders of Notes of the other series may at any time at its or
their option, by notice to t he Company, declare all the Notes of
such other series held by it or them to be immediately due and
payable.
Upon any Notes becoming due and payable under this
Section 12.1, whether automatically or by declaration, such Notes
will forthwith mature and the entire unpaid principal amount of
such Notes, plus (x) all accrued and unpaid interest thereon and
(y) the Make-Whole Amount for each Series A Note and the LIBOR
Funding Loss Amount for each Series B Note (in each case to the
full extent permitted by applicable law), shall all be immediately
due and payable, in each and every case without presentment,
demand, protest or further notice, all of which are hereby waived.
The Make-Whole Amount shall be considered to be liquidated damages
in respect of acceleration of a Series A Note, it being
acknowledged by the Company that the damages resultling to a holder
of a Series A Note from an Event of Default may be difficult to
ascertain and that the Make-Whole Amount constitutes a fair and
reasonable amount of damages under such circumstances and is not a
penalty.
12.2. Other Remedies.
If any Default or Event of Default has occurred and is
continuing, and irrespective of whether any Notes have become or
have been declared immediately due and payable under Section 12.1,
the Holder of any Note at the time outstanding may proceed to
protect and enforce the rights of such Holder by an action at law,
suit in equity or other appropriate proceeding, whether for the
specific performance of any agreement contained herein or in any
Note, or for an injunction against a violation of any of the terms
hereof or thereof, or in aid of the exercise of any power granted
hereby or thereby or by law or otherwise.
12.3. Rescission.
At any time after any Notes of either series have been
declared due and payable pursuant to clause (b) or (c) of
Section 12.1, the Required Holders of such series by written notice
to the Company, may rescind and annul any such declaration and its
consequences if (a) the Company has paid all overdue interest on
the Notes, all principal of and Make-Whole Amount, if any, on any
Notes that are due and payable and are unpaid other than by reason
of such declaration, and all interest on such overdue principal and
Make-Whole Amount, if any, (to the extent permitted by applicable
law) any overdue interest in respect of the Notes, at the
respective default rates specified in the Notes of each series, (b)
all Events of Default and Defaults, other than non-payment of
amounts that have become due solely by reason of such declaration,
have been cured or have been waived pursuant to Section 17, and (c)
no judgment or decree has been entered for the payment of any
monies due pursuant hereto or to the Notes. No rescission and
annulment under this Section 12.3 will extend to or affect any
subsequent Event of Default or Default or impair any right
consequent thereon.
12.4. No Waivers or Election of Remedies, Expenses, etc.
No course of dealing and no delay on the part of any holder
of any Note in exercising any right, power or remedy shall operate
as a waiver thereof or otherwise prejudice such holder's rights,
powers or remedies. No right, power or remedy conferred by this
Agreement or by any Note upon any holder thereof shall be exclusive
of any other right, power or remedy referred to herein or therein
or now or hereafter available at law, in equity, by statute or
otherwise. Without limiting the obligations of the Company under
Section 15, the Company will pay to the holder of each Note on
demand such further amount as shall be sufficient to cover all
costs and expenses of such holder incurred in any enforcement or
collection under this Section 12, including without limitation
reasonable attorneys' fees, expenses and disbursements.
13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.
13.1. Registration of Notes.
The Company shall keep at its principal executive office a
register for the registration and registration of transfers of
Notes. The name and address of each holder of one or more Notes,
each transfer thereof and the name and address of each transferee
of one or more Notes shall be registered in such register. Prior
to due presentment for registration of transfer, the Person in
whose name any Note shall be registered shall be deemed and treated
as the owner and holder thereof for all purposes hereof, and the
Company shall not be affected by any notice or knowledge to the
contrary. The Company shall give to any holder of a Note that is
an Institutional Investor promptly upon request therefor, a
complete and correct copy of the names and addresses of all
registered holders of Notes.
13.2. Transfer and Exchange of Notes.
Upon surrender of any Note at the principal executive office
of the Company for registration of transfer or exchange (and in the
case of a surrender for registration of transfer, duly endorsed or
accompanied by a written instrument of transfer duly executed by
the registered holder of such Note or his attorney duly authorized
in writing and accompanied by the address for notices of each
transferee of such Note or part thereof), the Company shall execute
and deliver, at the Company's expense (except as provided below),
one or more new Notes (as requested by the holder thereof) in
exchange therefor, of the same series and in an aggregate principal
amount equal to the unpaid principal amount of the surrendered
Note. Each such new Note shall be payable to such Person as such
holder may request. Each such new Note shall be dated and bear
interest from the date to which interest shall have been paid on
the surrendered Note or dated the date of the surrendered Note if
no interest shall have been paid thereon. The Company may require
payment of a sum sufficient to cover any stamp tax or governmental
charge imposed in respect of any such transfer of Notes. Notes
shall not be transferred in denominations of less than $100,000,
provided that if necessary to enable the registration of transfer
by a holder of its entire holding of Notes, one Note may be in a
denomination of less than $100,000.
You agree that the Company shall not be required to register
the transfer of any Note to any Person (other than your nominee) or
to any separate account maintained by you unless the Company
receives from the transferee a representation to the Company (and
appropriate information as to any separate accounts or other
matters) to the same or similar effect with respect to the
transferee as is contained in Section 6.2 or other assurances
reasonably satisfactory to the Company that such transfer does not
involve a prohibited transaction (as such term is used in Section
5.12 (e) ). You shall not be liable for any damages in connection
with any such representations or assurances provided to the Company
by any transferee.
13.3. Replacement of Notes.
Upon receipt by the Company of evidence reasonably
satisfactory to it of the ownership of and the loss, theft,
destruction or mutilation of any Note (which evidence shall be, in
the case of an Institutional Investor, notice from such
Institutional Investor of such ownership and such loss, theft,
destruction or mutilation), and
(a) in the case of loss, theft or destruction, of
indemnity reasonably satisfactory to it (provided that if the
holder of such Note is, or is a nominee for, an original
Purchaser or any other Institutional Investor, such Person's
own unsecured agreement of indemnity shall be deemed to be
satisfactory), or
(b) in the case of mutilation, upon surrender and
cancellation thereof,
the Company at its own expense shall execute and deliver, in lieu
thereof, a new Note of the same series, dated and bearing interest
from the date to which interest shall have been paid on such lost,
stolen, destroyed or mutilated Note or dated the date of such lost,
stolen, destroyed or mutilated Note if no interest shall have been
paid thereon.
14. PAYMENTS ON NOTES.
14.1. Place of Payment.
Subject to Section 14.2, payments of principal, premium, if
any, and interest becoming due and payable on the Notes shall be
made in New York, New York at the principal office of Citibank,
N.A. in such jurisdiction. The Company may at any time, by notice
to each Holder of a Note, change the place of payment of the Notes
so long as such place of payment shall be either the principal
office of the Company in such jurisdiction or the principal office
of a bank or trust company in such jurisdiction.
14.2. Home Office Payment.
So long as you or your nominee shall be the holder of any
Note, and notwithstanding anything contained in Section 14.1 or in
such Note to the contrary, the Company will pay all sums becoming
due on such Note for principal, Make-Whole Amount, if any, and
interest by the method and at the address specified for such
purpose below your name in Schedule A, or by such other method or
at such other address as you shall have from time to time specified
to the Company in writing for such purpose, without the
presentation or surrender of such Note or the making of any
notation thereon, except that upon written request of the Company
made concurrently with or reasonably promptly after payment or
prepayment in full of any Note, you shall surrender such Note for
cancellation, reasonably promptly after any such request, to the
Company at its principal executive office or at the place of
payment most recently designated by the Company pursuant to
Section 14.1. Prior to any sale or other disposition of any Note
held by you or your nominee you will, at your election, either
endorse thereon the amount of principal paid thereon and the last
date to which interest has been paid thereon or surrender such Note
to the Company in exchange for a new Note or Notes pursuant to
Section 13.2. The Company will afford the benefits of this
Section 14.2 to any Institutional Investor that is the direct or
indirect transferee of any Note purchased by you under this
Agreement and that has made the same agreement relating to such
Note as you have made in this Section 14.2.
15. EXPENSES, ETC.
15.1. Transaction Expenses.
Whether or not the transactions contemplated hereby are
consummated, the Company will pay all costs and expenses (including
reasonable attorneys' fees of your special counsel and, if
reasonably required, local or other counsel) incurred by you and
each Other Purchaser or holder of a Note in connection with such
transactions and in connection with any amendments, waivers or
consents under or in respect of this Agreement or the Notes
(whether or not such amendment, waiver or consent becomes
effective), including without limitation: (a) the costs and
expenses incurred in enforcing or defending (or determining whether
or how to enforce or defend) any rights under this Agreement or the
Notes or in responding to any subpoena or other legal process or
informal investigative demand issued in connection with this
Agreement or the Notes, or by reason of being a Holder of any Note,
and (b) the costs and expenses, including financial advisors' fees,
incurred in connection with the insolvency or bankruptcy of the
Company or any Subsidiary or in connection with any work-out or
restructuring of the transactions contemplated hereby and by the
Notes. The Company will pay, and will save you and each other
holder of a Note harmless from, all claims in respect of any fees,
costs or expenses if any, of brokers and finders (other than those
retained by you).
In furtherance of the foregoing, on the date of the Closing
the Company will pay or cause to be paid the reasonable fees, and
disbursements (including estimated unposted disbursements as of the
date of the Closing) of your special counsel which are reflected in
the statement of such special counsel submitted to t he Company on
or prior to the date of the Closing. The Company will also pay,
promptly upon receipt of supplemental statements therefor,
reasonable additional fees, if any, and disbursements of such
special counsel in connection with the transactions hereby
contemplated (including disbursements unposted as of the date of
the Closing to the extent such disbursements exceed estimated
disbursements paid as aforesaid).
15.2. LIBOR Funding Losses.
The Company will pay each holder of a Series B Note, within
two Business Days after demand therefor, such amount (the "LIBOR
Funding Loss Amount") as in the good faith determination by such
holder will compensate such holder for any loss or reasonable
expense such Holder may sustain as a consequence of the receipt or
recovery for any reason (including without limitation a prepayment
pursuant to Section 8.2 or acceleration pursuant to Section 12.1)
of all or any part of payment on account of such Series B Note
prior to the last day of the applicable Interest Period therefor,
including without limitation any loss or expense sustained or
incurred in liquidating a Swap or any loss of margin on
reemployment of the funds so received or recovered.
15.3. Survival.
The obligations of the Company under this Section 15 will
survive the payment or transfer of any Note, the enforcement,
amendment or waiver of any provision of this Agreement or the
Notes, and the termination of this Agreement.
16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.
All representations and warranties contained herein shall
survive the execution and delivery of this Agreement and the Notes,
the purchase or transfer by you of any Note or portion thereof or
interest therein and the payment of any Note, and may be relied
upon by any subsequent holder of a Note, regardless of any
investigation made at any time by or on behalf of you or any other
holder of a Note. All statements contained in any certificate or
other instrument delivered by or on behalf of the Company pursuant
to this Agreement shall be deemed representations and warranties of
the Company under this Agreement. Subject to the preceding
sentence, this Agreement and the Notes embody the entire agreement
and understanding between you and the Company and supersede all
prior agreements and understandings relating to the subject matter
hereof.
17. AMENDMENT AND WAIVER.
17.1. Requirements.
This Agreement and the Notes may be amended, and the
observance of any term hereof or of the Notes may be waived (either
retroactively or prospectively), with (and only with) the written
consent of the Company and the Required Holders, except that (a) no
amendment or waiver of any of the provisions of Section 1, 2, 3, 4,
5, 6 or 21, or any defined term (as it is used therein), will be
effective as to you unless consented to by you in writing, and (b)
no such amendment or waiver may, without the written consent of the
holder of each Note at the time outstanding affected thereby, (i)
subject to the provisions of Section 12 relating to acceleration or
rescission, change the amount or time of any prepayment or payment
of principal of, or change the rate or the time of payment or
method of computation of interest or of the Make-Whole Amount (if
any) on, the Notes of either series, (ii) change the percentage of
the principal amount of the Notes of either series the holders of
which are required to consent to any such amendment or waiver, or
(iii) amend any of Sections 8, 11(a), 11(b), 12, 17 or 20.
17.2. Solicitation of Holders of Notes.
(a) Solicitation. The Company will provide each holder of
the Notes (irrespective of the amount or series of Notes then owned
by it) with sufficient information, sufficiently far in advance of
the date a decision is required, to enable such holder to make an
informed and considered decision with respect to any proposed
amendment, waiver or consent in respect of any of the provisions
hereof or of the Notes. The Company will deliver executed or true
and correct copies of each amendment, waiver or consent effected
pursuant to the provisions of this Section 17 to each holder of
outstanding Notes promptly following the date on which it is
executed and delivered by, or receives the consent or approval of,
the requisite holders of Notes.
(b) Payment. The Company will not directly or indirectly
pay or cause to be paid any remuneration, whether by way of
supplemental or additional interest, fee or otherwise, or grant any
security, to any holder of Notes as consideration for or as an
inducement to the entering into by any holder of Notes or any
waiver or amendment of any of the terms and provisions hereof
unless such remuneration is concurrently paid, or security is
concurrently granted, on the same terms (or no less favorable terms
taking into account differences in the terms of the Notes of each
series), ratably to each holder of Notes then outstanding even if
such holder did not consent to such waiver or amendment.
17.3. Binding Effect, etc.
Any amendment or waiver consented to as provided in this
Section 17 applies equally to all holders of Notes and is binding
upon them and upon each future holder of any Note and upon the
Company without regard to whether such Note has been marked to
indicate such amendment or waiver. No such amendment or waiver
will extend to or affect any obligation, covenant, agreement,
Default or Event of Default not expressly amended or waived or
impair any right consequent thereon. No course of dealing between
the Company and the holder of any Note nor any delay in exercising
any rights hereunder or under any Note shall operate as a waiver of
any rights of any holder of such Note. As used herein, the term
"this Agreement" and references thereto shall mean this Agreement
as it may from time to time be amended or supplemented.
17.4. Notes held by Company, etc.
Solely for the purpose of determining whether the holders of
the requisite percentage of the aggregate principal amount of Notes
then outstanding approved or consented to any amendment, waiver or
consent to be given under this Agreement or the Notes, or have
directed the taking of any action provided herein or in the Notes
to be taken upon the direction of the holders of a specified
percentage of the aggregate principal amount of Notes then
outstanding, Notes directly or indirectly owned by the Company or
any of its Affiliates shall be deemed not to be outstanding.
18. NOTICES.
All notices and communications provided for hereunder shall
be in writing and sent (a) by telecopy if the sender on the same
day sends a confirming copy of such notice by a recognized
overnight delivery service (charges prepaid), or (b) by registered
or certified mail with return receipt requested (postage prepaid),
or (c) by a recognized overnight delivery service (with charges
prepaid). Any such notice must be sent:
(i) if to you or your nominee, to you or it at the
address specified for such communications in Schedule A, or
at such other address as you or it shall have specified to
the Company in writing,
(ii) if to any other holder of any Note, to such holder
at such address as such other Holder shall have specified to
the Company in writing, or
(iii) if to the Company, to the Company at its address
set forth at the beginning hereof to the attention of the
Chief Financial officer, or at such other address as the
Company shall have specified to the holder of each Note in
writing.
Notices under this Section 18 will be deemed given only when
actually received.
19. REPRODUCTION OF DOCUMENTS.
This Agreement and all documents relating thereto, including,
without limitation, (a) consents, waivers and modifications that
may hereafter be executed, (b) documents received by you at the
Closing (except the Notes themselves), and (c) financial
statements, certificates and other information previously or
hereafter furnished to you, may be reproduced by you by any
photographic, photostatic, microfilm, microcard, miniature
photographic or other similar process and you may destroy any
original document so reproduced. The Company agrees and stipulates
that, to the extent permitted by applicable law, any such
reproduction shall be admissible in evidence as the original itself
in any judicial or administrative proceeding (whether or not the
original is in existence and whether or not such reproduction was
made by you in the regular course of business) and any enlargement,
facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence. This Section 19 shall not
prohibit the Company or any other Holder of Notes from contesting
any such reproduction to the same extent that it could contest the
original, or from introducing evidence to demonstrate the
inaccuracy of any such reproduction.
20. CONFIDENTIAL INFORMATION.
For the purposes of this Section 20, "Confidential
Information" means information delivered to you by or on behalf of
the Company or any Subsidiary in connection with the transactions
contemplated by or otherwise pursuant to this Agreement that is
proprietary in nature and that was clearly marked or labeled or
otherwise adequately identified when received by you as being
confidential information of the Company or such Subsidiary,
provided that such term does not include information that (a) was
publicly known or otherwise known to you prior to the time of such
disclosure, (b) subsequently becomes publicly known through no act
or omission by you or any person acting on your behalf, (c)
otherwise becomes known to you other than through disclosure by the
Company or any Subsidiary or (d) constitutes financial statements
delivered to you under Section 7.1 that are otherwise publicly
available. You will maintain the confidentiality of such
Confidential Information in accordance with procedures adopted by
you in good faith to protect confidential information of third
parties delivered to you, provided that you may deliver or disclose
Confidential Information to (i) your directors, officers, trustees,
employees, agents, attorneys and affiliates (to the extent such
disclosure reasonably relates to the administration of the
investment represented by your Notes), (ii) your financial advisors
and other professional advisors whose duties require them to hold
confidential the Confidential Information substantially in
accordance with the terms of this Section 20, (iii) any other
holder of any Note, (iv) any Institutional Investor to which you
sell or offer to sell such Note or any part thereof or any
participation therein (if such Person has agreed in writing prior
to its receipt of such Confidential Information to be bound by the
provisions of this Section 20), (v) any Person from which you offer
to purchase any security of the Company (if such Person has agreed
in writing prior to its receipt of such Confidential Information to
be bound by the provisions of this Section 20), (vi) any federal or
state regulatory authority having jurisdiction over you, (vii) the
National Association of Insurance Commissioners or any similar
organization, or any nationally recognized rating agency that
requires access to information about your investment portfolio or
(viii) any other Person to which such delivery or disclosure may be
necessary or appropriate (w) to effect compliance with any law,
rule, regulation or order applicable to you, (x) in response to any
subpoena or other legal process, (y) in connection with any
litigation to which you are a party or (z) if an Event of Default
has occurred and is continuing, to the extent you may reasonably
determine such delivery and disclosure to be necessary or
appropriate in the enforcement or for the protection of the rights
and remedies under your Notes and this Agreement. Each holder of
a Note, by its acceptance of a Note, will be deemed to have agreed
to be bound by and to be entitled to the benefits of this
Section 20 as though it were a party to this Agreement. On
reasonable request by the Company in connection with the delivery
to any holder of a Note of information required to be delivered to
such holder under this Agreement or requested by such holder (other
than a Holder that is a party to this Agreement or its nominee),
such holder will enter into an agreement with the Company embodying
the provisions of this Section 20.
21. SUBSTITUTION OF PURCHASER.
You shall have the right to substitute any one of your
Affiliates as the purchaser of the Notes that you have agreed to
purchase hereunder, by written notice to the Company, which notice
shall be signed by both you and such Affiliate, shall contain such
Affiliate's agreement to be bound by this Agreement and shall
contain a confirmation by such Affiliate of the accuracy with
respect to it of the representations set forth in Section 6. Upon
receipt of such notice, wherever the word "you" is used in this
Agreement (other than in this Section 21), such word shall be
deemed to refer to such Affiliate in lieu of you. In the event
that such Affiliate is so substituted as a purchaser hereunder and
such Affiliate thereafter transfers to you all of the Notes then
held by such Affiliate, upon receipt by the Company of notice of
such transfer, wherever the word "you" is used in this Agreement
(other than in this Section 21), such word shall no longer be
deemed to refer to such Affiliate, but shall refer to you, and you
shall have all the rights of an original holder of the Notes under
this Agreement.
22. MISCELLANEOUS.
22.1. Successors and Assigns.
All covenants and other agreements contained in this
Agreement by or on behalf of any of the parties hereto bind and
inure to the benefit of their respective successors and assigns
(including without limitation any subsequent holder of a Note)
whether so expressed or not.
22.2. Construction.
Each covenant contained herein shall be construed (absent
express provision to the contrary) as being independent of each
other covenant contained herein, so that compliance with any one
covenant shall not (absent such an express contrary provision) be
deemed to excuse compliance with any other covenant. Where any
provision herein refers to action to be taken by any Person, or
which such Person is prohibited from taking, such provision shall
be applicable whether such action is taken directly or indirectly
by such Person.
22.3. Jurisdiction and Process.
(a) The Company irrevocably submits to the non-exclusive
in personam jurisdiction of any New York State or federal
court sitting in the Borough of Manhattan, The City of New
York, over any suit, action or proceeding arising out of or
relating to this Agreement or the Notes. To the fullest
extent permitted by applicable law, the Company irrevocably
waives and agrees not to assert, by way of motion, as a
defense or otherwise, any claim that it is not subject to the
in personam jurisdiction of any such court, any objection
that it may now or hereafter have to the laying of the venue
of any such suit, action or proceeding brought in any such
court and any claim that any such suit, action or proceeding
brought in any such court has been brought in an inconvenient
forum.
(b) The Company agrees, to the fullest extent permitted
by applicable law, that a final judgment in any suit, action
or proceeding of the nature referred to in Section 22.3(a)
brought in any such court shall be conclusive and binding
upon the Company subject to rights of appeal, as the case may
be, and may be enforced in the courts of the United States
of America or the State of New York (or any other courts to
the jurisdiction of which the Company is or may be subject)
by a suit upon such judgment.
(c) The Company consents to process being served in any
suit, action or proceeding of the nature referred to in
Section 22.3(a) by mailing a copy thereof by registered or
certified mail, postage prepaid, return receipt requested,
to the Company at its address specified in Section 18 or at
such other address of which you shall then have been notified
pursuant to said Section. The Company agrees that such
service upon receipt (i) shall be deemed in every respect
effective service of process upon it in any such suit, action
or proceeding and (ii) shall, to the fullest extent permitted
by applicable law, be taken and held to be valid personal
service upon and personal delivery to the Company. Notices
hereunder shall be conclusively presumed received as
evidenced by a delivery receipt furnished by the United
States Postal Service or any reputable commercial delivery
service.
(d) Nothing in this Section 22.3 shall affect the right
of any holder of a Note to serve process in any manner
permitted by law, or limit any right that the holders of any
of the Notes may have to bring proceedings against the
Company in the courts of any appropriate jurisdiction or to
enforce in any lawful manner a judgment obtained in one
jurisdiction in any other jurisdiction.
(e) THE COMPANY WAIVES TRIAL BY JURY IN ANY ACTION
BROUGHT ON OR WITH RESPECT TO THIS AGREEMENT, THE OTHER
AGREEMENTS, THE NOTES OR ANY OTHER DOCUMENT EXECUTED IN
CONNECTION HEREWITH OR THEREWITH.
22.4. Indemnification.
The Company agrees, to the extent permitted by applicable
law, to indemnify, exonerate and hold you and each of your
officers, directors, trustees, employees and agents (collectively
the "Indemnitees" and individually an "Indemnitee") free and
harmless from and against any and all actions, causes of action,
suits, losses, liabilities and damages, and expenses in connection
therewith, including without limitation reasonable fees and
disbursements of a single firm to act as special counsel for all
Indemnitees or, if there shall exist a legitimate conflict in the
interests of the Indemnitees, the reasonable fees and disbursements
of more than one special counsel (collectively the "Indemnified
Liabilities") incurred by the Indemnitees or any of them as a
result of, or arising out of, or relating to, the execution,
delivery, performance or enforcement of this Agreement, the Notes
or any other instrument contemplated hereby by any of the
Indemnitees, or any transaction financed or to be financed in whole
or in part directly or indirectly with proceeds from the sale of
any of the Notes, or any action taken or omitted by an Indemnitee
in the capacity of Calculation Holder (or acting in place of the
Calculation Holder as contemplated by Section 1.1(b)), except as to
any Indemnitee for any such Indemnified Liabilities arising on
account of such Indemnitee's gross negligence or willful
misconduct; and if and to the extent the foregoing undertaking may
be unenforceable for any reason, the Company agrees to make the
maximum contribution to the payment and satisfaction of each of the
Indemnified Liabilities which is permissible under applicable law.
The obligations of the Company under this Section shall survive the
payment of the Notes.
22.5. Accounting Terms.
All accounting terms used herein which are not expressly
defined in this Agreement have the meanings respectively given to
them in accordance with GAAP. Except as otherwise specifically
provided herein, all computations made pursuant to this Agreement
shall be made in accordance with GAAP and all balance sheets and
other financial statements with respect thereto shall be prepared
in accordance with GAAP. Except as otherwise expressly provided,
any consolidated financial statement or financial computation shall
be done in accordance with GAAP; and, if at the time that any such
statement or computation is required to be made the Company shall
not have any Subsidiary, such terms shall mean a financial
statement or a financial computation, as the case may be, with
respect to the Company only.
22.6. Payments Due on Non-Business Days.
Anything in this Agreement or the Notes to the contrary
notwithstanding, any payment of principal of or Make-Whole Amount
(if any) or interest on any Note that is due on a date other than
a Business Day shall be made on the next succeeding Business Day
without including the additional days elapsed in the computation of
the interest payable on such next succeeding Business Day.
22.7. Severability.
Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions
hereof, and any such prohibition or unenforceability in any
jurisdiction shall (to the full extent permitted by law) not
invalidate or render unenforceable such provision in any other
jurisdiction.
22.8. Counterparts.
This Agreement may be executed in any number of counterparts,
each of which shall be an original but all of which together shall
constitute one instrument. Each counterpart may consist of a
number of copies hereof, each signed by less than all, but together
signed by all, of the parties hereto.
22.9. Governing Law.
This Agreement and the Notes shall be construed and enforced
in accordance with, and the rights of the parties shall be governed
by, the laws of the State of New York excluding choice-of-law
principles of the law of such State that would require the
application of the laws of a jurisdiction other than such State.
If you are in agreement with the foregoing, please sign the
form of agreement in the space below provided on a counterpart of
this Agreement and return it to the Company, whereupon the
foregoing shall become a binding agreement between you and the
Company.
Very truly yours,
SHOWBIZ PIZZA TIME, INC.
By: Larry G. Page
Title: Executive Vice President,
Chief Financial Officer
The foregoing is hereby agreed to
as of the date thereof.
ALLSTATE LIFE INSURANCE COMPANY
By: Patricia W. Wilson
Authorized Signatory
By: Steven M. Laude
Authorized Signatory
The foregoing is hereby agreed to
as of the date thereof.
CONNECTICUT MUTUAL LIFE INSURANCE COMPANY
By: Kenneth D. Anderson
Vice President
The foregoing is hereby agreed to
as of the date thereof.
CM LIFE INSURANCE COMPANY
By: K. D. Anderson
Vice President
The foregoing is hereby agreed to
as of the date thereof.
MASSMUTUAL CORPORATE VALUE PARTNERS LIMITED
By: Bruce E. Gaudette
Vice President
The foregoing is hereby agreed to
as of the date thereof.
MASSMUTUAL MUTUAL LIFE INSURANCE COMPANY
By: Bruce E. Gaudette
Vice President
The foregoing is hereby agreed to
as of the date thereof.
MODERN WOODMEN OF AMERICA
By: W. B. Foster
President
SCHEDULE A
This Schedule A shows the names and addresses of the
Purchasers under the foregoing Note Purchase Agreement and the
Other Agreements referred to therein and the respective principal
amounts of Notes of each series to be purchased by each.
Principal Amount and Series
Name and Address of Purchaser of Notes to be Purchased
----------------------------- ---------------------------
ALLSTATE LIFE INSURANCE COMPANY $10,000,000
(Series A)
(1) All payments by Fedwire transfer of
immediately available funds,
identifying the name of the Issuer
(and the Credit, if any), the
Private Placement Number preceded
by "DPP" and the payment as
principal, interest or premium, in
the format as follows:
BBK - Harris Trust and Savings Bank
ABA #071000288
BNF - Allstate Life Insurance Company
Collection Account #168-117-0
ORG - ShowBiz Pizza Time, Inc.
OBI - DPP
Payment Due Date
P______________(Enter "P" and
amount of principal being
remitted, for example,
P5000000.00)
I_____________(Enter "I" and
amount of interest being
remitted, for example,
I225000.00)
(2) Address for all notices in respect
of payment:
Allstate Insurance Company
Investment Operations - Private
Placements
3075 Sanders Road, STE G4A
Northbrook, IL 60062-7127
Telephone:(708) 402-8709
Telecopy: (708) 402-7331
(3) Address for all other communications:
Allstate Life Insurance Company
Private Placements Department
3100 Sanders Road, STE J2A
Northbrook, IL 60062-7154
(4) Tax Identification No.: 36-2554642
Principal Amount and Series
Name and Address of Purchaser of Notes to be Purchased
----------------------------- ---------------------------
MASSACHUSETTS MUTUAL LIFE $6,000,000
INSURANCE COMPANY (Series B)
(1) All payments on account of the
Notes shall be made by crediting in
the form of bank wire transfer of
Federal or other immediately
available funds (identifying each
payment as ShowBiz Pizza Time, Inc.
Floating Rate Series B Senior Notes
due 2000 interest and principal)
to:
The Chase Manhattan Bank, N.A.
4 Chase MetroTech Center
New York, NY 10081
ABA No. 021000021
For credit as follows:
In the case of Note No. R-B1
in the principal amount of
$2000,000:
For MassMutual IFM Traditional
Account No. 910-1388131
In the Case of Note No. R-B2
in the principal amount of
$2,000,000:
For MassMutual IFM Non-
Traditional
Account No. 910-2509073
In the Case of Note No. R-B3
in principal amount of
$2,000,000:
For MassMutual Pension
Management
Account No. 910-2594018
Each with telephone advice of
payment to the Securities Custody
and Collection Department of
Massachusetts Mutual Life Insurance
Company at (413) 744-3878
(2) All notices and communications to
be addressed to:
Massachusetts Mutual Life
Insurance Company
1295 State Street
Springfield, MA 01111
Attn: Securities Investment Division
(3) Notices with respect to payments
and corporate actions to be
addressed as provided in clause (2)
above:
Attention: Securities Custody and Collection
Department F 381
(4) Tax Identification Number: 04-1590850
Principal Amount and Series
Name and Address of Purchaser of Notes to be Purchased
----------------------------- ---------------------------
MASSMUTUAL CORPORATE VALUE $4,00,000
PARTNERS LIMITED (Series B)
(1) All payments on account of the
Notes shall be made by crediting in
the form of bank wire transfer of
Federal or other immediately
available funds (identifying each
payment as ShowBiz Pizza Time, Inc.
Floating Rate Series B Senior Notes
due 2000 interest and principal)
to:
BKAM IL CGO/TRUST
ABA Number 071000039
Attention: Trust Teller
MASSMUTUAL CORPORATE VALUE PARTNERS
Account Number 373010006279
Attention: Barbara McLaughlin
With telephone advice of payment to
the Securities Custody and
Collection Department of
Massachusetts Mutual Life Insurance
Company at (413) 744-3878
(2) All notices and communications to
be address to:
MassMutual Corporate Value Partners
Limited
c/o Bank of America trust and Banking
Banking Corporation (Cayman) Limited
P.O. Box 1096
George Town
Grand Cayman
Cayman Islands, B.W.I.
Attention: Michael Carney
(3) Notices with respect to payments
and corporate actions to be
addressed as provided in clause (2)
above.
(4) Tax Identification Number: 36-6235310
Principal Amount and Series
Name and Address of Purchaser of Notes to be Purchased
----------------------------- ---------------------------
CONNECTICUT MUTUAL LIFE INSURANCE $3,000,000
COMPANY (Series A)
(1) All payments on account of the
Notes shall be made by wire
transfer of immediately
available funds to:
The Bank of New York
ABA No.: 021000018 BNF: IOC566
Attn: P&I Department
For: Connecticut Mutual Life
Insurance Company
including issuer, interest rate,
private placement number, maturity,
and whether payment is of
principal, interest and/or premium
(2) All audit confirmations:
Connecticut Mutual Life Insurance
Company
c/o The Bank of New York
P.O. Box 19266
Attn: P&I Department
Newark, NJ 07195
Audit confirmations can be sent via
FAX to (212) 495-2730
(3) Address for all other
communications:
Connecticut Mutual Life Insurance
Company
140 Garden Street
Hartford, CT 06154
Attn: Private Placements, MS 272
(4) Tax Identification No.: 06-0304620
Principal Amount and Series
Name and Address of Purchaser of Notes to be Purchased
----------------------------- ------------------------
C M LIFE INSURANCE COMPANY $2,000,000
(Series A)
(1) All payments on account of the
Notes shall be made by wire
transfer of immediately available
funds to:
The Bank of New York
ABA No.: 021000018 BNF: IOC566
Attn: P&I Department
Attn: C M Life Insurance Co.
including issuer, interest rate,
private placement number, maturity,
and whether payment is of
principal, interest and/or premium
(2) All audit confirmations:
C M Life Insurance Company
c/o The Bank of New York
P.O. Box 19266
Attn: P&I Department
Newark, NJ 07195
Audit confirmations can be sent via
FAX to (212) 495-2730
(3) Address for all other
communications:
C M Life Insurance Company
140 Garden Street
Hartford, CT 06154
Attn: Private Placements, MS 272
(4) Tax Identification No.: 06-1041383
Principal Amount and Series
Name and Address of Purchaser of Notes to be Purchased
----------------------------- ------------------------
MODERN WOODMEN OF AMERICA $3,000,000
(Series A)
(1) All payments on account of the
Notes shall be made by wire
transfer of immediately available
funds to:
Account No. 347-904-5
Harris trust & Savings Bank
111 West Monroe Street
Chicago, IL 60690
ABA No. 071-000-288
For the account of Modern Woodmen
of America
Each such wire transfer shall set
forth the name of the Company, the
full title (including the
applicable coupon rate and final
maturity date) of the Notes, a
reference to PPN NO. 825388 A* 2
and the due date and application
(as among principal, remium and
interest) of the payment being made.
(2) Address for all notices in respect
of payment:
Modern Woodmen of America
1701 1st Avenue
Rock Island, IL 61201
Attn: Investment Department
(3) Address for all other
communications (such as annual
reports, statements, waivers and
amendments):
Modern Woodmen of America
1701 1st Avenue
Rock Island, IL 61201
Attn: Investment Department
(4) Tax Identification No.: 36-1493430
SCHEDULE B
DEFINED TERMS
-------------
As used herein, the following terms have the respective
meanings set forth below or set forth in the Section hereof
following such term:
"Affiliate" means, at any time, and with respect to any
Person, (a) any other Person that at such time directly or
indirectly through one or more intermediaries Controls, or is
Controlled by, or is under common Control with, such first Person,
and (b) any Person beneficially owning or holding, directly or
indirectly, 10% or more of any class of voting or equity interests
of the Company or any Subsidiary or any corporation of which the
Company and its Subsidiaries beneficially own or hold, in the
aggregate, directly or indirectly, 10% or more of any class of
voting or equity interests. As used in this definition, "Control"
means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by
contract or otherwise. Unless the context otherwise clearly
requires, any reference to an "Affiliate" is a reference to an
Affiliate of the Company.
"Business Day" means (a) for the purposes of Section 8.6 only,
any day other than a Saturday, a Sunday or a day on which
commercial banks in New York City are required or authorized to be
closed, and (b) for purposes of any other provision of this
Agreement, any day other than a Saturday, a Sunday or a day on
which commercial banks in New York City or Dallas, Texas are
required or authorized to be closed
"Capital Lease" means, at any time, a lease with respect to
which the lessee is required concurrently to recognize the
acquisition of an asset and the incurrence of a liability in
accordance with GAAP.
"Capitalized Lease Obligations" means with respect to any
Person, all outstanding obligations of such Person in respect of
Capital Leases, taken at the capitalized amount thereof accounted
for as indebtedness in accordance with GAAP.
"Change of Control" means (a) the acquisition through purchase
or otherwise (including the agreement to act in concert without
more), by any Person or "group" (within the meaning of Section
13(d) or 14(d) of the Exchange Act) directly or indirectly, in one
or more transactions, of the beneficial ownership or control of
securities representing more than 25% of the combined voting power
of the Company's Voting Stock or (b) the acquisition by any Person,
entity or "group" (within the meaning of Section 13(d) or 14(d) of
the Exchange Act), of the power (whether or not exercised) to elect
a majority of the Board of Directors of the Company. For purposes
of this definition "beneficial ownership" shall have the meaning
set forth in Rule 13d-3 of the Securities and Exchange Commission
adopted pursuant to the Exchange Act.
"Closing" is defined in Section 3.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time, and the rules and regulations promulgated
thereunder from time to time.
"Company" means ShowBiz Pizza Time, Inc., a Kansas
corporation.
"Confidential Information" is defined in Section 20.
"Consolidated Capitalization" means, at any date, the sum of
(a) Consolidated Indebtedness plus (b) Consolidated Net Worth plus
(c) deferred tax liabilities (if any), all as determined on a
consolidated basis for the Company and its Subsidiaries in
accordance with GAAP.
"Consolidated Indebtedness" means, at any date, all
Indebtedness of the Company and its Subsidiaries determined on a
consolidated basis in accordance with GAAP.
"Consolidated Interest Expense" for any period means the sum
for the Company and its Subsidiaries, determined on a consolidated
basis in accordance with GAAP, of all amounts which would be
deducted in computing Consolidated Net Income on account of
interest on Indebtedness (including imputed interest in respect of
Capitalized Lease Obligations and amortization of debt discount and
expense).
"Consolidated Net Income" for any period means the net income
of the Company and its Subsidiaries for such period, determined on
a consolidated basis in accordance with GAAP, excluding
(a) the proceeds of any life insurance policy,
(b) any gains arising from (i) the sale or other
disposition of any assets (other than current assets) to the
extent that the aggregate amount of the gains during such
period exceeds the aggregate amount of the losses during such
period from the sale, abandonment or other disposition of
assets (other than current assets), (ii) any write-up of
assets or (iii) the acquisition of outstanding securities of
the Company or any Subsidiary,
(c) any amount representing any interest in the
undistributed earnings of any other Person (other than a
Subsidiary),
(d) any earnings, prior to the date of acquisition, of
any Person acquired in any manner, and any earnings of any
Subsidiary acquired prior to its becoming a Subsidiary,
(e) any earnings of a successor to or transferee of the
assets of the Company prior to its becoming such successor or
transferee,
(f) any deferred credit (or amortization of a deferred
charge or credit) arising from the acquisition of any Person,
and
(g) any extraordinary gains not covered by clause (b)
above.
"Consolidated Net Worth" means, at any date, on a consolidated
basis for the Company and its Subsidiaries, (a) the sum of (i)
capital stock taken at par or stated value plus (ii) capital in
excess of par or stated value relating to capital stock plus (iii)
retained earnings (or minus any retained earning deficit) minus (b)
the sum of treasury stock, capital stock subscribed for and
unissued, deferred compensation and other contra-equity accounts,
all determined in accordance with GAAP.
"Consolidated Operating Lease Rentals" for any period means
the sum of the rental and other obligations required to be paid by
the Company and its Subsidiaries as lessee under all leases of real
or personal property (other than Capital Leases), excluding any
amounts required to be paid by the lessee (whether or not therein
designated as rental or additional rental) on account of
maintenance and repairs, insurance, taxes, assessments, water rates
and similar charges, all determined on a consolidated basis in
accordance with GAAP.
"Default" means an event or condition the occurrence or
existence of which would, with the lapse of time or the giving of
notice or both, become an Event of Default.
"EBITDA" for any period means Consolidated Net Income plus all
amounts deducted in the computation thereof on account of (a)
Consolidated Interest Expense, (b) depreciation and amortization
expenses (including amortization of deferred compensation) and
other non-cash charges, (c) income and profits taxes and (d)
extraordinary losses (if any) of the type described in clauses (b)
through (g) of the definition of "Consolidated Net Income" that are
deducted in determining Consolidated Net Income for such period.
"Environmental Laws" means any and all Federal, state, local,
and foreign statutes, laws, regulations, ordinances, rules,
judgments, orders, decrees, permits, concessions, grants,
franchises, licenses, agreements or governmental restrictions
relating to pollution and the protection of the environment or the
release of any materials into the environment, including but not
limited to those related to hazardous substances or wastes, air
emissions and discharges to waste or public systems.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the rules and regulations
promulgated thereunder from time to time in effect.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that is treated as a single employer together with
the Company under section 414 of the Code.
"Event of Default" is defined in Section 11.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time.
"Fixed Charge Coverage Ratio" means the ratio of (i) EBITDA
plus Consolidated Operating Lease Rentals to (ii) Consolidated
Interest Expense plus Consolidated Operating Lease Rentals.
"GAAP" means generally accepted accounting principles as in
effect from time to time in the United States of America.
"Governmental Authority" means
(a) the government of
(i) the United States of America or any State or
other political subdivision thereof, or
(ii) any jurisdiction in which the Company or any
Subsidiary conducts all or any part of its business, or
which asserts jurisdiction over any properties of the
Company or any Subsidiary, or
(b) any entity exercising executive, legislative,
judicial, regulatory or administrative functions of, or
pertaining to, any such government.
"Guaranty" means, with respect to any Person, any obligation
(except the endorsement in the ordinary course of business of
negotiable instruments for deposit or collection) of such Person
guaranteeing or in effect guaranteeing any Indebtedness, dividend
or other obligation of any other Person in any manner, whether
directly or indirectly, including without limitation obligations
incurred through an agreement, contingent or otherwise, by such
Person:
(a) to purchase such Indebtedness or obligation or any
property constituting security therefor;
(b) to advance or supply funds (i) for the purchase or
payment of such indebtedness or obligation, or (ii) to
maintain any working capital or other balance sheet condition
or any income statement condition of any other Person or
otherwise to advance or make available funds for the purchase
or payment of such Indebtedness or obligation;
(c) to lease properties or to purchase properties or
services primarily for the purpose of assuring the owner of
such Indebtedness or obligation of the ability of any other
Person to make payment of the indebtedness or obligation; or
(d) otherwise to assure the owner of such Indebtedness
or obligation against loss in respect thereof.
In any computation of the Indebtedness or other liabilities of the
obligor under any Guaranty, the Indebtedness or other obligations
that are the subject of such Guaranty shall be assumed to be direct
obligations of such obligor.
"Hazardous Material" means any and all pollutants, toxic or
hazardous wastes or any other substances that might pose a hazard
to health or safety, the removal of which may be required or the
generation, manufacture, refining, production, processing,
treatment, storage, handling, transportation, transfer, use,
disposal, release, discharge, spillage, seepage, or filtration of
which is or shall be restricted, prohibited or penalized by any
applicable law (including without limitation asbestos, urea
formaldehyde foam insulation and polycholorinated biphenyls).
"Holder" means, with respect to any Note, the Person in whose
name such Note is registered in the register maintained by the
Company pursuant to Section 13.1.
"Indebtedness" with respect to any Person means, at any time,
without duplication,
(a) its liabilities for borrowed money,
(b) its liabilities for the deferred purchase price of
property acquired by such Person (excluding accounts payable
arising in the ordinary course of business and not overdue but
including all liabilities created or arising under any
conditional sale or other title retention agreement with
respect to any such property),
(c) its Capitalized Lease Obligations,
(d) all liabilities for borrowed money secured by any
Lien with respect to any property owned by such Person
(whether or not it has assumed or otherwise become liable for
such liabilities),
(e) all its liabilities in respect of letters of credit
or instruments serving a similar function issued or accepted
for its account by banks and other financial institutions
(whether or not representing obligations for borrowed money),
(f) Swaps of such Person, and
(g) any Guaranty of Such Person with respect to
liabilities of a type described in any of clauses (a) through
(f) above.
Indebtedness of any Person shall include all obligations of such
Person of the character described in clauses (a) through (g) above
to the extent such Person remains legally liable in respect thereof
notwithstanding that any such obligation is deemed to be
extinguished under GAAP. Indebtedness shall not include any
obligations under operating lease agreements.
"Institutional Investor" means (a) any original purchaser of
a Note, (b) any holder of a Note holding more than 1% of the
aggregate principal amount of the Notes then outstanding, and (c)
any bank, trust company, savings and loan association or other
financial institution, any pension plan, any investment company,
any insurance company, any broker or dealer, or any other similar
financial institution or entity, regardless of legal form.
"Interest Payment Date" means each March 31, June 30,
September 30 and December 31.
"Interest Period" is defined in Section 1.1(c).
"LIBOR Funding Loss Amount" is defined in Section 15.2.
"LIBOR Rate" is defined in Section 1.1(c).
"Lien" means, with respect to any Person, any mortgage, lien,
pledge, charge, security interest or other encumbrance, or any
interest or title of any vendor, lessor, lender or other secured
party to or of such Person under any conditional sale or other
title retention agreement or Capital Lease, upon or with respect to
any property or asset of such Person (including in the case of
stock, stockholder agreements, voting trust agreements and all
similar arrangements).
"Make-Whole Amount" is defined in Section 8.6.
"Material" means material in relation to the business,
operations, affairs, financial condition, profits, assets,
properties or prospects of the Company and its Subsidiaries taken
as a whole.
"Material Adverse Effect" means a material adverse effect on
(a) the business, operations, affairs, financial condition,
profits, assets, properties or prospects of the Company and its
Subsidiaries taken as a whole, (b) the ability of the Company to
perform its obligations under this Agreement and the Notes or (c)
the validity or enforceability of this Agreement or the Notes.
"Memorandum" is defined in Section 5.3.
"Multi-employer Plan" means any Plan that is a "multiemployer
plan" (as such term is defined in section 4001(a)(3) of ERISA).
"Notes" is defined in Section 1.1.
"Officer's Certificate" means a certificate of a Senior
Financial Officer or of any other officer of the Company whose
responsibilities extend to the subject matter of such certificate.
"Other Agreements" is defined in Section 2.
"Other Purchasers" is defined in Section 2.
"PBGC" means the Pension Benefit Guaranty Corporation referred
to and defined in ERISA or any successor thereto.
"Person" means an individual, partnership, corporation,
limited liability company, association, trust, unincorporated
organization, or a government or agency or political subdivision
thereof.
"Plan" means an "employee benefit plan" (as defined in section
3(3) of ERISA) that is or, within the preceding five years, has
been established or maintained, or to which contributions are or,
within the preceding five years, have been made or required to be
made, by the Company or any ERISA Affiliate or with respect to
which the Company or any ERISA Affiliate may have any liability.
"property" or "properties" means, unless otherwise
specifically limited, real or personal property of any kind,
tangible or intangible, choate or inchoate.
"PTE" is defined in Section 6.2.
"QPAM Exemption" means Prohibited Transaction Class Exemption
84-14 issued on March 13, 1984 by the United States Department of
Labor.
"Required Holders" means, at any time, the holders of at least
a majority in unpaid principal amount of the Notes (irrespective of
series unless otherwise specified or unless the context otherwise
clearly requires) at the time outstanding.
"Reset Date" is defined in Section 1.2(c).
"Responsible Officer" means any Senior Financial Officer and
any other officer of the Company with responsibility for the
administration of the relevant portion of this Agreement.
"Securities Act" means the Securities Act of 1933, as amended
from time to time.
"Senior Financial Officer" means the chief financial officer,
principal accounting officer, treasurer or comptroller of the
Company.
"Series A Notes" is defined in Section 1.1.
"Series B Notes" is defined in Section 1.1.
"Subsidiary" means, as to any Person, any corporation or other
business entity a majority of the combined voting power of all
Voting Stock of which is owned by such Person or one or more of its
Subsidiaries or such Person and one or more of its Subsidiaries.
Unless the context otherwise clearly requires, any reference to a
"Subsidiary" is a reference to a Subsidiary of the Company.
"Swaps" means, with respect to any Person, payment obligations
with respect to interest rate swaps, currency swaps and similar
obligations obligating such Person to make payments, whether
periodically or upon the happening of a contingency. For the
purposes of this Agreement, the amount of the obligation under any
Swap shall be the amount determined in respect thereof as of the
end of the then most recently ended fiscal quarter of such Person,
based on the assumption that such Swap had terminated at the end of
such fiscal quarter, and in making such determination, if any
agreement relating to such Swap provides for the netting of amounts
payable by and to such Person thereunder or if any such agreement
provides for the simultaneous payment of amounts by and to such
Person, then in each such case, the amount of such obligation shall
be the net amount so determined.
"Voting Stock" means, with respect to any Person, any shares
of stock or other equity interests of any class or classes of such
Person whose holders are entitled under ordinary circumstances
(irrespective of whether at the time stock or other equity
interests of any other class or classes shall have or might have
voting power by reason of the happening of any contingency) to vote
for the election of a majority of the directors, managers, trustees
or other governing body of such Person.
"Wholly-Owned Subsidiary" means, at any time, any Subsidiary
all of the equity interests (except directors' qualifying shares)
and voting interests of which are owned by any one or more of the
Company and the Company's other Wholly-Owned Subsidiaries at such
time.
EXHIBIT 1.1(a)
[FORM OF SERIES A NOTE]
SHOWBIZ PIZZA TIME, INC.
10.02% SERIES A SENIOR NOTE DUE 2001
No. [ ] New York, New York
$[____________] [Date]
PPN 825388 A* 2
FOR VALUE RECEIVED, the undersigned, SHOWBIZ PIZZA TIME, INC.
(the "Company"), a Kansas corporation, hereby promises to pay to
[___________________], or registered assigns, the principal sum of
[______________________________] DOLLARS on June 15, 2001, with
interest (computed on the basis of a 360-day year of twelve 30-day
months) (a) from the date hereof on the unpaid balance thereof at
the rate of 10.02% per annum, payable quarterly on each Interest
Payment Date (as below defined), until the principal hereof shall
have become due and payable, and (b) on any overdue payment of
principal, any overdue payment of interest (to the extent permitted
by applicable law) and any overdue payment of any premiuim or
Make-Whole Amount (as defined in the Note Purchase Agreements
referred to below), payable quarterly as aforesaid (or, at the
option of the registered holder hereof, on demand) at a rate per
annum from time to time equal to the greater of (i) 12.02% and (ii)
2% above the rate of interest publicly announced by Citibank, N.A.
from time to time at its principal office in New York City as its
"prime" or "base" rate.
As used herein the term "Interest Payment Date" means each
March 15, June 15, September 15 and December 15.
Payments of principal of, interest on and any Make-Whole
Amount with respect to this Note are to be made in lawful money of
the United States of America at said principal office of Citibank,
N.A. in New York City or at such other place as the Company shall
have designated by written notice to the holder of this Note as
provided in the Note Purchase Agreements referred to below.
This Note is one of a series of Senior Notes issued pursuant
to separate Note Purchase Agreements dated as of June 15, 1995 (as
from time to time amended, the "Note Purchase Agreements") between
the Company and the respective Purchasers named therein and is
entitled to the benefits thereof. Each holder of this Note will be
deemed, by its acceptance hereof, to have agreed to the
confidentiality provisions set forth in Section 20 of the Note
Purchase Agreements.
This Note is a registered Note and, as provided in the Note
Purchase Agreements, upon surrender of this Note for registration
of transfer, duly endorsed, or accompanied by a written instrument
of transfer, duly executed, by the registered holder hereof or such
holder's attorney duly authorized in writing, a new Note for a like
principal amount will be issued to, and registered in the name of,
the transferee. Prior to due presentment for registration of
transfer, the Company may treat the person in whose name this Note
is registered as the owner hereof for the purpose of receiving
payment and for all other purposes, and the Company will not be
affected by any notice to the contrary.
The Company will make required prepayments of principal on the
dates and in the amounts specified in the Note Purchase Agreements.
The Company is also required under circumstances described in the
Note Purchase Agreement to offer to prepay all Notes on the terms
specified in the Note Purchase Agreements, but this Note may not
otherwise be prepaid.
If an Event of Default, as defined in the Note Purchase
Agreements, occurs and is continuing, the principal of this Note
may be declared or otherwise become due and payable in the manner,
at the price ( including any applicable premium or Make-Whole
Amount) and with the effect provided in the Note Purchase
Agreements.
This Note shall be construed and enforced in accordance with,
and the rights of the Company and the holder hereof shall be
governed by the laws of the State of New York, excluding
choice-of-law principles of such law.
SHOWBIZ PIZZA TIME, INC.
By:
Title:
EXHIBIT 1.1(b)
[FORM OF SERIES B NOTE]
SHOWBIZ PIZZA TIME, INC.
FLOATING RATE SERIES B SENIOR NOTE DUE 2000
No. [ ] New York, New York
$[ ] [Date]
PPN 825388 A@ 0
FOR VALUE RECEIVED, the undersigned, SHOWBIZ PIZZA TIME, INC.
(the "Company"), a Kansas corporation, hereby promises to pay to
[_____________________], or registered assigns, the principal
amount of [____________________________________________] DOLLARS on
June 15, 2000, with interest (computed on the basis of actual days
elapsed and a year of 360 days) (a) from the date hereof on the
unpaid balance thereof, payable quarterly on each Interest Payment
Date (as below defined), at a rate per annum for each Interest
Period (as defined in the Note Purchase Agreements referred to
below) equal to 3.5% plus the LIBOR Rate (as so defined) as
determined in respect of such Interest Period pursuant to said Note
Purchase Agreements, until the principal hereof shall have become
due and payable, and (b) on any overdue payment of principal or (to
the extent permitted by applicable law) interest, payable quarterly
as aforesaid (or, at the option of the registered holder hereof, on
demand) at a rate per annum from time to time equal to 2% above the
interest rate then applicable to this Note, from the date of such
default to and including the last day of the Interest Period during
which such default occurs and thereafter at a rate per annum equal
to 5.5% above said LIBOR Rate (as so determined from time to time
on the basis of three-month Interest Periods).
[The LIBOR Rate for the [six]-month Interest Period commencing
on the date of this Note is 6%.]
As used herein the term "Interest Payment Date" means each
March 15, June 15, September 15 and December 15.
Payments of principal of, interest on and any premium with
respect to this Note are to be made in lawful money of the United
States of America at the principal office of Citibank N.A. in New
York City or at such other place as the Company shall have
designated by written notice to the holder of this Note as provided
in the Note Purchase Agreements referred to below.
This Note is one of a series of Senior Notes issued pursuant
to separate Note Purchase Agreements dated as of June 15, 1995 (as
from time to time amended, the "Note Purchase Agreements") between
the Company and the respective Purchasers named therein and is
entitled to the benefits thereof. Each holder of this Note will be
deemed, by its acceptance hereof, to have agreed to the
confidentiality provisions set forth in Section 20 of the Note
Purchase Agreements.
Pursuant to the Note Purchase Agreements the Company is
required to give written notice to the holder of this Note of the
duration of each Interest Period for this Note, and of the
applicable interest rate for such Interest Period as determined on
the Reset Date (as defined in the Note Purchase Agreement) for such
Interest Period. The applicable LIBOR Rate and interest rate and
duration of such Interest Period for this Note shall be endorsed by
the holder of this Note on the schedule attached hereto or any
continuation thereof prior to any transfer of this Note.
This Note is a registered Note and, as provided in the Note
Purchase Agreements, upon surrender of this Note for registration
of transfer, duly endorsed, or accompanied by a written instrument
of transfer duly executed, by the registered holder hereof or such
holder's attorney duly authorized in writing, a new note for a like
principal amount will be issued to, and registered in the name of,
the transferee. Prior to due presentment for registration of
transfer, the Company may treat the person in whose name this Note
is registered as the owner hereof for the purpose of receiving
payment and for all other purposes, and the Company will not be
affected by any notice to the contrary.
The Company will make required prepayments of principal on the
Notes on the dates and in the amounts specified in the Note
Purchase Agreements. The Company is also required under
circumstances described in the Note Purchase Agreements to offer to
prepay all Notes on the terms specified in the Note Purchase
Agreements, but this Note may not otherwise be prepaid.
If an Event of Default, as defined in the Note Purchase
Agreements, occurs and is continuing, the principal of this Note
may be declared or otherwise become due and payable in the manner,
at the price and with the effect provided in the Note Purchase
Agreements.
This Note shall be construed and enforced in accordance with,
and the rights of the Company and the holder hereof shall be
governed by, the laws of the State of New York, excluding
choice-of-law principles of such law.
SHOWBIZ PIZZA TIME, INC.
By:
Title:
Schedule of Interest Rate and Duration of Interest Period
----------------------------------------------------------
Interest Rate
Duration of (LIBOR Rate Notation
Reset Date Interest Period LIBOR Rate plus 3.5%) Made By
---------- --------------- ---------- ---------- --------
EXHIBIT 4.4 (a)
EXHIBIT 4.4 (b)
OPINION OF COUNSEL TO THE COMPANY
The following opinions are to be provided by counsel for
the Company, subject to customary assumptions, limitations and
qualifications. Opinions should be allocated between inside and
outside counsel as is customary. All capitalized terms used herein
without definitions shall have the meanings ascribed thereto in the
Agreements.
The Company is a corporation duly organized and validly
existing under the laws of the State of Kansas and has all
requisite power to own or hold under lease the property it purports
to own or hold under lease, to carry on its business as now being
conducted and to execute and deliver the Agreements and the Notes
and to perform the provisions thereof. The Company has duly
qualified and is authorized to do business in each jurisdiction
where such qualification and authorization is necessary.
The Agreements have been duly authorized, executed and
delivered by the Company and constitute legal, valid and binding
agreements of the Company, enforceable against the Company in
accordance with their terms.
The Notes being purchased by you today have been duly
authorized, executed and delivered by the Company and constitute
legal, valid and binding obligations of the Company, enforceable
against the Company in accordance with their respective terms.
No consent, approval or authorization of, or declaration,
registration or filing with, any Governmental Authority is required
to be obtained or made as a condition to the validity of the
execution and delivery by the Company of the Agreements or said
Notes.
It was not necessary in connection with the offering,
sale and delivery of said Notes, under the circumstances
contemplated by the Agreements, to register said Notes under the
Securities Act or to qualify an indenture in respect of the Notes
under the Trust Indenture Act of 1939, as amended.
6. Each Subsidiary is a corporation [or other legal entity]
duly organized, validly existing and in good standing under the
laws of jurisdiction of its incorporation or organization and is
duly qualified as a foreign corporation or other legal entity and
is in good standing in each jurisdiction in which such
qualification is reguired by law, except where the failure to be so
qualified could not, individually or in the aggregate, have a
Material Adverse Effect. Each Subsidiary has all requisite power
and authority to own or hold under lease the property it purports
to own or hold under lease and to transact the business it
transacts.
7. Neither the Company nor any Subsidiary is subject to
regulation under the Investment Company Act of 1940, as amended,
the Public Utility Holding Company Act of 1935, as amended, or the
Federal Power Act, as amended.
8. None of the transactions contemplated by the Agreements
(including without limitation the use of the proceeds from the sale
of the Notes) will violate or result in a violation of Section 7 of
the Exchange Act, or any regulations issued pursuant thereto,
including without limitation Regulations G, T and X of the Board of
Governors of the Federal Reserve System (12 CFR, Part 207, Part 220
and Part 224, respectively).
9. There are no actions, suits or proceedings pending, or to
our knowledge threatened, against or affecting the Company or any
Subsidiary or any property of the Company or any Subsidiary in any
court or before any arbitrator of any kind or before or by any
Governmental Authority, except actions, suits or proceedings which
(a) individually do not in any manner draw into question the
validity of the Agreements or the Notes and (b) in the aggregate
could not reasonably be expected to have a Material Adverse Effect.
10. A Texas court would give effect to Section 22.9 of the
Agreements and the governing law provisions of the Notes being
purchased by you today.
[Reliance or assumption as to Kansas and New York law - to be
discussed]
* * * *
This opinion is given solely for your benefit, for the
benefit of the institutional investor holders from time to time of
the Notes purchased by you today, in connection with the closing
held today of the transactions contemplated by the Agreements, and
may not be relied upon by any other person for any purpose without
our prior written consent.
EXHIBIT 4.4(c)
June 15, 1995
Re: ShowBiz Pizza Time, Inc.
10.02% Series A Senior Notes due 2001
Floating Rate Series B Senior Notes due 2000
To the several Purchasers listed in
Schedule A to the within-mentioned
Note Purchase Agreements
Ladies and Gentlemen:
We have acted as your special counsel in connection with the
issuance by ShowBiz Pizza Time, Inc. (the "Company") of its 10.02%
Series A Senior Notes due 2001 in an aggregate principal amount of
$18,000,000 (the "Series A Notes") and its Floating Rate Series B
Senior Notes due 2000 in an aggregate principal amount of
$10,000,000 (the "Series B Notes", and together with the Series A
Notes, collectively the "Notes") and the purchases by you pursuant
to the several Note Purchase Agreements made by you with the
Company under date of June 15, 1995 (the "Note Purchase
Agreements") of Notes in the respective aggregate principal amounts
and series specified in Schedule A to the Note Purchase Agreements.
All capitalized terms used herein without definition shall have the
meanings ascribed thereto in the Note Purchase Agreements.
We have examined such corporate records of the Company and its
Subsidiaries, agreements and other instruments, certificates of
officers and representatives of the Company and its Subsidiaries,
certificates of public officials, and such other documents, as we
have deemed necessary in connection with the opinions hereinafter
expressed. In such examination we have assumed the genuineness of
all signatures, the authenticity of documents submitted to us as
originals and the conformity with the authentic originals of all
documents submitted to us as copies. As to questions of fact
material to such opinions we have, when relevant facts were not
independently established, relied upon the representations set
forth in the Note Purchase Agreements and upon certifications by
officers or other representatives of the Company and its
Subsidiaries.
In addition, we attended the closing held today at our office
at which you purchased and made payment for Notes in the respective
aggregate principal amounts and series to be purchased by you, all
in accordance with the Note Purchase Agreements.
Based upon the foregoing and having regard for legal
considerations that we deem relevant, we render our opinion to you
pursuant to Section 4.4(b) of the Note Purchase Agreements as
follows:
The Note Purchase Agreements have been duly authorized,
executed and delivered by the Company and constitute legal, valid
and binding agreements of the Company, enforceable against the
Company in accordance with their terms.
The Notes being purchased by you today have been duly
authorized, executed and delivered by the Company and constitute
legal, valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms.
No consent, approval or authorization of, or declaration,
registration or filing with, any New York or Federal Governmental
Authority is required to be obtained or made as a condition to the
validity of the execution and delivery by the Company of the Note
Purchase Agreements or said Notes or for the performance by the
Company of its obligations thereunder.
It was not necessary in connection with the offering,
sale and delivery of said Notes, under the circumstances
contemplated by the Note Purchase Agreements, to register said
Notes under the Securities Act of 1933, as amended, or to qualify
an indenture in respect of the Notes under the Trust Indenture Act
of 1939, as amended.
5. The opinions of even date herewith of Marshall Frisco,
Esq., Counsel to the Company, and Winstead Sechrest & Minick P.C.,
special counsel to the Company respectively delivered to you
pursuant to Section 4.4 (a) of the Note Purchase Agreements, are
satisfactory to us in form and scope with respect to the matters
respectively specified therein and we believe that you and we are
justified in relying thereon.
The opinions expressed above as to the enforceability of any
agreement or instrument in accordance with its terms are subject to
the exceptions that (a) such enforceability may be limited by (i)
applicable bankruptcy, insolvency, reorganization, moratorium and
similar laws affecting the enforcement of creditors' rights
generally and (ii) general equitable principles (regardless of
whether such enforceability is considered in a proceeding in equity
or at law), (b) the enforceability of indemnity provisions
contained in the Note Purchase Agreements may be subject to
limitations based upon public policy considerations.
We express no opinion as to Section 22.2 of the Note Purchase
Agreements insofar as said Section relates to (a) the subject
matter jurisdiction of the United States District Court for the
Southern District of New York to adjudicate any controversy
relating to the Note Purchase Agreements, the Notes or any other
document related thereto, (b) the waiver of inconvenient forum with
respect to proceedings in such United States District Court or (c)
the waiver of the right to jury trial.
We are members of the bar of the State of New York and do not
herein intend to express any opinion as to any matters governed by
any laws other than Federal laws and the laws of the State of New
York.
This opinion is given solely for your benefit and for the
benefit of institutional investor holders from time to time of the
Notes purchased by you today, in connection with the closing held
today of the transactions contemplated by the Note Purchase
Agreements, and may not be relied upon by any other person for any
purpose without our prior written consent.
Very truly yours,
SCHEDULE 5.3
Disclosure Documents
Form 10K Annual Report for Fiscal year ended
December 30, 1994
Form 10Q Quarterly Report for quarterly period
ended March 31, 1995
Form 8K Current Report for May 5, 1995
Proxy Statement Notice of Annual Meeting of Shareholders
to be held June 8, 1995
Proxy Supplement Supplemental Information of Annual
Meeting of Shareholders to be held on
June 8, 1995
SCHEDULE 5.4
Subsidiaries
BHC Acquisition Corporation
State of Incorporation: Texas
Shares/Equity Owned by Company: 100%
Directors:
Richard M. Frank
Michael H. Magusiak
Richard T. Huston
Officers:
Richard M. Frank CEO, President, COO
Alice Winters Vice President, Secretary
Michael H. Magusiak Vice President,
Controller, Treasurer
Odom Sherman Assistant Treasurer
Richard T. Huston Vice President
Gene Cramm Vice President
ShowBiz of Laurel, Inc.
State of Incorporation: Maryland
Shares/Equity Owned by Company: 73%
Directors:
Vivian K. Oram
Gene Cramm
Carol E. Neal
Officers:
Vivian K. Oram President, Treasurer
Gene Cramm Secretary, Vice President
Carol Elkins Neal Assistant Secretary
Chuck E. Cheese of Waldorf, Inc.
State of Incorporation: Maryland
Shares/Equity Owned by Company: 100%
Directors:
Richard M. Frank
Michael H. Magusiak
Lorie Martinsen
Officers:
Lorie Martinsen President
Alice Winters Secretary, Treasurer
Sandra Schiranko Vice President
Chuck E. Cheese of Gaithersburg, Inc.
State of Incorporation: Maryland
Shares/Equity Owned by Company: 80%
Directors:
Lois Perry
Lorie Martinsen
Leslie Cherkis
Officers:
Lois Perry President
Lorie Martinsen Secretary/Treasurer
Leslie Cherkis Vice President
Chuck E. Cheese of Glen Burnie, Inc.
State of Incorporation: Maryland
Shares/Equity Owned by Company: 97%
Directors:
Richard M. Frank
Michael H. Magusiak
Alice M. Winters
Officers:
Alice M. Winters President
Lorie Martinsen Vice President,
Secretary, Treasurer
Ruth Ann Raup Assistant Secretary
ShowBiz of Madison, Inc.
State of Incorporation: Wisconsin
Shares/Equity Owned by Company: 100%
Directors:
Richard M. Frank
Officers:
Richard M. Frank President
Alice Winters Vice President, Secretary
Michael H. Magusiak Treasurer
Chuck E. Cheese of Diamond Point, Inc.
State of Incorporation: Maryland
Shares/Equity Owned by Company: 97%
Directors:
Richard M. Frank
Michael H. Magusiak
Alice Winters
Officers:
Alice Winters President
Karessa Rollwage Secretary, Treasure
Chuck E. Cheese of Westview, Inc.
State of Incorporation: Maryland
Shares/Equity Owned by Company: 98%
Directors:
Lorie Martinsen
Richard M. Frank
Michael H. Magusiak
Officers:
Lorie Martinsen President
Alice Winters Secretary, Treasurer
Hospitality Distribution Incorporated
State of Incorporation: Texas
Shares/Equity Owned by Company: 0%
Directors:
Michael H. Magusiak
Richard M. Frank
Lorie Martinsen
Officers:
Richard M. Frank President
Lorie Martinsen Secretary
Michael H. Magusiak Vice President, Treasurer
Odom Sherman, Jr. Assistant Treasurer
Chuck E. Cheese of Silver Springs, Inc.
State of Incorporation: Maryland
Shares/Equity Owned by Company: 0%
Directors:
Richard T. Huston
Alice Winters
Susan Velasquez
Officers:
Richard T. Huston President
Alice Winters Secretary, Treasurer
Susan Velasquez Vice President
ShowBiz of La Crosse, Inc.
State of Incorporation: Wisconsin
Shares/Equity Owned by Company: 100%
Directors:
Richard M. Frank
Officers:
Richard M. Frank President
Alice Winters Vice President, Secretary
Michael H. Magusiak Treasurer
ShowBiz of Ashwaubenon, Inc.
State of Incorporation: Wisconsin
Shares/Equity Owned by Company: 100%
Directors:
Richard M. Frank
Officers:
Richard M. Frank President
Alice Winters Vice President, Secretary
Michael H. Magusiak Treasurer
SB Hospitality Corporation
State of Incorporation: Texas
Shares/Equity Owned by Company: 49 %
Directors:
Richard T. Huston
Alice Winters
Odom Sherman, Jr.
Officers:
Richard T. Huston President
Alice Winters Secretary, Vice President
Odom Sherman, Jr. Treasurer
ShowBiz of Arkansas, Inc.
State of Incorporation: Arkansas
Shares/Equity Owned by Company: 50%
Directors:
Richard M. Frank
Officers:
Richard M. Frank President
Alice Winters Vice President, Secretary
Michael H. Magusiak Treasurer
Odom Sherman Assistant Treasurer
Affiliates
International Association of ShowBiz Pizza Time Restaurants, Inc.
State of Incorporation: Texas
Shares/Equity Owned by Company: Non-Profit
Directors:
Jim Rudolph
R.C. Schmidt
Bryon Schlosser
Michael H. Magusiak
Michael A. Hilton
Ronald Hake
Officers:
Michael A. Hilton President
Michael Magusiak Secretary, Treasurer
R.C. Schmidt Vice President
B - SB Joint Venture Agreement
An Oklahoma joint venture including Harold W. Burlingame,
Barbara Jean Burlingame and ShowBiz Pizza Time, Inc.
Shares/Equity Owned by Company: 50%
MCBIZ/SHOWBIZ Joint Venture Agreement
A Kansas joint venture including MCBIZ Limited Partnership,
a Kansas limited partnership and ShowBiz Pizza Time, Inc.
Shares/Equity Owned by Company: 51%
Mid-South Joint Venture Agreement
A South Carolina joint venture including Mid-South Food
Management, Inc., a South Carolina corporation and ShowBiz
Pizza Time, Inc.
Shares/Equity Owned by Company: 30%.
ShowBiz White Settlement Club, Inc.
State of Incorporation: Texas
Shares/Equity Owned by Company: Non-Profit
Directors:
Richard T. Huston
Alice M. Winters
John E. Artope
Officers:
Richard T. Huston President
Alice Winters Secretary, Treasurer
John E. Artope Vice President
ShowBiz Richardson Club, Inc.
State of Incorporation: Texas
Shares/Equity Owned by Company: Non-Profit
Directors:
Richard T. Huston
Alice M. Winters
John E. Artope
Officers:
Richard T. Huston President
Alice Winters Secretary, Treasurer
John E. Artope Vice President
ShowBiz Redbird Club, Inc.
State of Incorporation: Texas
Shares/Equity Owned by Company: Non-Profit
Directors:
Richard T. Huston
Alice M. Winters
John E. Artope
Officers:
Richard T. Huston President
Alice Winters Secretary, Treasurer
John E. Artope Vice President
ShowBiz Montfort Club, Inc.
State of Incorporation: Texas
Shares/Equity Owned by Company: Non-Profit
Directors:
Richard T. Huston
Alice M. Winters
John E. Artope
Officers:
Richard T. Huston President
Alice Winters Secretary, Treasurer
John E. Artope Vice President
2500 South Coulter Street Club
State of Incorporation: Texas
Shares/Equity Owned by Company: Non-Profit
Directors:
Richard T. Huston
Alice M. Winters
John E. Artope
Officers:
Richard T. Huston President
Alice Winters Secretary, Treasurer
John E. Artope Vice President
2402 South Stemmons Freeway Club
State of Incorporation: Texas
Shares/Equity Owned by Company: Non-Profit
Directors:
Richard T. Huston
Alice M. Winters
John E. Artope
Officers:
Richard T. Huston President
Alice Winters Secretary, Treasurer
SCHEDULE 5.5
Financial Statements
10K Annual Report for Fiscal year ended December 28, 1990.
10K Annual Report for Fiscal year ended December 27, 1991.
10K Annual Report for Fiscal year ended January 1, 1993.
10K Annual Report for Fiscal year ended December 31, 1993.
10K Annual Report for Fiscal year ended December 30, 1994.
10Q Quarterly Report for quarterly period ended March 31, 1995.
SCHEDULE 5.8
Litigation
None.
SCHEDULE 5.11
Licenses, Etc.
CHICO CHEESES PIZZA, Brazilian Trademark, Registration No.
817043209 in Class 28.10 ("games, toys and pastimes")
CHICO CHEESES PIZZA, Brazilian Trademark, Registration No.
817043217 in Class 32.10 ("doughs, pastries in general")
SCHEDULE 5.15
Existing Indebtedness
Liens on personal property securing Standby Letters of Credit Nos.
50060624 and 50072426 issued by the Bank of Boston in the
respective face amounts of $58,600 and $1,500,000.
$29,200,000 owed to the Bank of Boston as of March 31, 1995,
excluding the Letters of Credit, paid off from the proceeds under
the Note Purchase Agreement.
Other existing indebtedness on the date of closing which would be
permitted under Section 10.1 (a) of the Note Purchase Agreement,
consisting of capital lease obligations totaling $1,193,915 and
other indebtedness that does not exceed in the aggregate $500,000.
The Company has guaranteed certain obligations related to
restaurant building and equipment leases. The underlying assets
are collateral for the leases and the makers or assignees of all of
the obligations are required to perform thereunder before the
Company is required to fulfill its guarantee. In the event of
default by the maker or assignee, the Company, in almost all cases,
may make payment under the guarantees in accordance with the
original payment schedule and has the right to locate potential
buyers or subtenants for the assets. As of March 31, 1995, such
guarantees aggregated approximately $989,000.
The Company has a limited recourse guaranty of Monterey Acquisition
Corp.'s obligation to repay a $4,700,000 term loan to Greyhound
Financial Corporation. This guaranty is limited in recourse to the
Company's pledge of its interest in 143,250 shares of common stock
of Monterey Acquisition Corp. valued at $437,500 in the aggregate.
EXHIBIT 10(b)(1) - 10.02% Series A Senior Note
SHOWBIZ PIZZA TIME, INC.
10.02% SERIES A SENIOR NOTE DUE 2001
No. R-A1 New York, New York
$10,000,000 June 15, 1995
PPN 825388 A* 2
FOR VALUE RECEIVED, the undersigned, SHOWBIZ PIZZA TIME,
INC. (the "Company"), a Kansas corporation, hereby promises to pay
to ALLSTATE LIFE INSURANCE COMPANY, or registered assigns, the
principal sum of TEN MILLION DOLLARS on June 15, 2001, with
interest (computed on the basis of a 360-day year of twelve 30-day
months) (a) from the date hereof on the unpaid balance thereof at
the rate of 10.02% per annum, payable quarterly on each Interest
Payment Date (as below defined), until the principal hereof shall
have become due and payable, and (b) on any overdue payment of
principal, any overdue payment of interest (to the extent permitted
by applicable law) and any overdue payment of any premium of Make-
Whole Amount (as defined in the Note Purchase Agreements referred
to below), payable quarterly as aforesaid (or, at the option of the
registered holder hereof, on demand) at a rate per annum from time
to time equal to the greater of (i) 12.02% and (ii) 2% above the
rate of interest publicly announced by Citibank, N.A. from time to
time at its principal office in New York City as its "prime" rate
or "base" rate.
As used herein the term "Interest Payment Date" means
each March 15, June 15, September 15 and December 15.
Payments of principal of, interest on and any Make-Whole
Amount with respect to this Note are to be made in lawful money of
the United States of America at said principal office of Citibank,
N.A. in New York City or at such other place as the Company shall
have designated by written notice to the holder of this Note as
provided in the Note Purchase Agreements referred to below.
This Note is one of a series of Senior Notes issued
pursuant to separate Note Purchase Agreements dated as of June 15,
1995 (as from time to time amended, the "Note Purchase Agreements")
between the Company and the respective Purchasers named therein and
is entitled to the benefits thereof. Each holder of this Note will
be deemed, by its acceptance hereof, to have agreed to the
confidentiality provisions set forth in Section 20 of the Note
Purchase Agreements.
This Note is a registered Note and, as provided in the
Note Purchase Agreements, upon surrender of this Note for
registration of transfer, duly endorsed, or accompanied by a
written instrument of transfer duly executed, by the registered
holder hereof or such holder's attorney duly authorized in writing,
a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat the
person in whose name this Note is registered as the owner hereof
for the purpose of receiving payment and for all other purposes,
and the Company will not be affected by any notice to the contrary.
The Company will make required prepayments of principal
on the dates and in the amounts specified in the Note Purchase
Agreements. The Company is also required under circumstances
described in the Note Purchase Agreement to offer to prepay all
Notes on the terms specified in the Note Purchase Agreements, but
this Note may not otherwise be prepaid.
If an Event of Default, as defined in the Note Purchase
Agreements, occurs and in continuing, the principal of this Note
may be declared or otherwise become due and payable in the manner,
at the price (including any applicable premium or Make-Whole
Amount) and with the effect provided in the Note Purchase
Agreements.
This Note shall be construed and enforced in accordance
with, and the rights of the Company and the holder hereof shall be
governed by the laws of the State of New York, excluding choice-of
-law principles of such law.
SHOWBIZ PIZZA TIME, INC.
By Larry G. Page
Title: Chief Financial Officer
EXHIBIT (c)(1) 10.02% Series A Senior Note
SHOWBIZ PIZZA TIME, INC.
10.02% SERIES A SENIOR NOTE DUE 2001
No. R-A2 New York, New York
$1,000,000 June 15, 1995
PPN 825388 A* 2
FOR VALUE RECEIVED, the undersigned, SHOWBIZ PIZZA TIME,
INC. (the "Company"), a Kansas corporation, hereby promises to pay
to CONNECTICUT MUTUAL LIFE INSURANCE CO., or registered assigns,
the principal sum of ONE MILLION DOLLARS on June 15, 2001, with
interest (computed on the basis of a 360-day year of twelve 30-day
months) (a) from the date hereof on the unpaid balance thereof at
the rate of 10.02% per annum, payable quarterly on each Interest
Payment Date (as below defined), until the principal hereof shall
have become due and payable, and (b) on any overdue payment of
principal, any overdue payment of interest (to the extent permitted
by applicable law) and any overdue payment of any premium of Make-
Whole Amount (as defined in the Note Purchase Agreements referred
to below), payable quarterly as aforesaid (or, at the option of the
registered holder hereof, on demand) at a rate per annum from time
to time equal to the greater of (i) 12.02% and (ii) 2% above the
rate of interest publicly announced by Citibank, N.A. from time to
time at its principal office in New York City as its "prime" rate
or "base" rate.
As used herein the term "Interest Payment Date" means
each March 15, June 15, September 15 and December 15.
Payments of principal of, interest on and any Make-Whole
Amount with respect to this Note are to be made in lawful money of
the United States of America at said principal office of Citibank,
N.A. in New York City or at such other place as the Company shall
have designated by written notice to the holder of this Note as
provided in the Note Purchase Agreements referred to below.
This Note is one of a series of Senior Notes issued
pursuant to separate Note Purchase Agreements dated as of June 15,
1995 (as from time to time amended, the "Note Purchase Agreements")
between the Company and the respective Purchasers named therein and
is entitled to the benefits thereof. Each holder of this Note will
be deemed, by its acceptance hereof, to have agreed to the
confidentiality provisions set forth in Section 20 of the Note
Purchase Agreements.
This Note is a registered Note and, as provided in the
Note Purchase Agreements, upon surrender of this Note for
registration of transfer, duly endorsed, or accompanied by a
written instrument of transfer duly executed, by the registered
holder hereof or such holder's attorney duly authorized in writing,
a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat the
person in whose name this Note is registered as the owner hereof
for the purpose of receiving payment and for all other purposes,
and the Company will not be affected by any notice to the contrary.
The Company will make required prepayments of principal
on the dates and in the amounts specified in the Note Purchase
Agreements. The Company is also required under circumstances
described in the Note Purchase Agreement to offer to prepay all
Notes on the terms specified in the Note Purchase Agreements, but
this Note may not otherwise be prepaid.
If an Event of Default, as defined in the Note Purchase
Agreements, occurs and in continuing, the principal of this Note
may be declared or otherwise become due and payable in the manner,
at the price (including any applicable premium or Make-Whole
Amount) and with the effect provided in the Note Purchase
Agreements.
This Note shall be construed and enforced in accordance
with, and the rights of the Company and the holder hereof shall be
governed by the laws of the State of New York, excluding choice-of
-law principles of such law.
SHOWBIZ PIZZA TIME, INC.
By Larry G. Page
Title: Chief Financial Officer
EXHIBIT 10(c)(2) - 10.02% Series A Senior Note
SHOWBIZ PIZZA TIME, INC.
10.02% SERIES A SENIOR NOTE DUE 2001
No.R-A3 New York, New York
$1,000,000 June 15, 1995
PPN 825388 A* 2
FOR VALUE RECEIVED, the undersigned, SHOWBIZ PIZZA TIME,
INC. (the "Company"), a Kansas corporation, hereby promises to pay
to CONNECTICUT MUTUAL LIFE INSURANCE CO., or registered assigns,
the principal sum of ONE MILLION DOLLARS on June 15, 2001, with
interest (computed on the basis of a 360-day year of twelve 30-day
months) (a) from the date hereof on the unpaid balance thereof at
the rate of 10.02% per annum, payable quarterly on each Interest
Payment Date (as below defined), until the principal hereof shall
have become due and payable, and (b) on any overdue payment of
principal, any overdue payment of interest (to the extent permitted
by applicable law) and any overdue payment of any premium of Make-
Whole Amount (as defined in the Note Purchase Agreements referred
to below), payable quarterly as aforesaid (or, at the option of the
registered holder hereof, on demand) at a rate per annum from time
to time equal to the greater of (i) 12.02% and (ii) 2% above the
rate of interest publicly announced by Citibank, N.A. from time to
time at its principal office in New York City as its "prime" rate
or "base" rate.
As used herein the term "Interest Payment Date" means
each March 15, June 15, September 15 and December 15.
Payments of principal of, interest on and any Make-Whole
Amount with respect to this Note are to be made in lawful money of
the United States of America at said principal office of Citibank,
N.A. in New York City or at such other place as the Company shall
have designated by written notice to the holder of this Note as
provided in the Note Purchase Agreements referred to below.
This Note is one of a series of Senior Notes issued
pursuant to separate Note Purchase Agreements dated as of June 15,
1995 (as from time to time amended, the "Note Purchase Agreements")
between the Company and the respective Purchasers named therein and
is entitled to the benefits thereof. Each holder of this Note will
be deemed, by its acceptance hereof, to have agreed to the
confidentiality provisions set forth in Section 20 of the Note
Purchase Agreements.
This Note is a registered Note and, as provided in the
Note Purchase Agreements, upon surrender of this Note for
registration of transfer, duly endorsed, or accompanied by a
written instrument of transfer duly executed, by the registered
holder hereof or such holder's attorney duly authorized in writing,
a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat the
person in whose name this Note is registered as the owner hereof
for the purpose of receiving payment and for all other purposes,
and the Company will not be affected by any notice to the contrary.
The Company will make required prepayments of principal
on the dates and in the amounts specified in the Note Purchase
Agreements. The Company is also required under circumstances
described in the Note Purchase Agreement to offer to prepay all
Notes on the terms specified in the Note Purchase Agreements, but
this Note may not otherwise be prepaid.
If an Event of Default, as defined in the Note Purchase
Agreements, occurs and in continuing, the principal of this Note
may be declared or otherwise become due and payable in the manner,
at the price (including any applicable premium or Make-Whole
Amount) and with the effect provided in the Note Purchase
Agreements.
This Note shall be construed and enforced in accordance
with, and the rights of the Company and the holder hereof shall be
governed by the laws of the State of New York, excluding choice-of
-law principles of such law.
SHOWBIZ PIZZA TIME, INC.
By Larry G. Page
Title: Chief Financial Officer
EXHIBIT 10(c)(3) - 10.02% Series A Senior Note
SHOWBIZ PIZZA TIME, INC.
10.02% SERIES A SENIOR NOTE DUE 2001
No.R-A4 New York, New York
$1,000,000 June 15, 1995
PPN 825388 A* 2
FOR VALUE RECEIVED, the undersigned, SHOWBIZ PIZZA TIME,
INC. (the "Company"), a Kansas corporation, hereby promises to pay
to CONNECTICUT MUTUAL LIFE INSURANCE CO., or registered assigns,
the principal sum of ONE MILLION DOLLARS on June 15, 2001, with
interest (computed on the basis of a 360-day year of twelve 30-day
months) (a) from the date hereof on the unpaid balance thereof at
the rate of 10.02% per annum, payable quarterly on each Interest
Payment Date (as below defined), until the principal hereof shall
have become due and payable, and (b) on any overdue payment of
principal, any overdue payment of interest (to the extent permitted
by applicable law) and any overdue payment of any premium of Make-
Whole Amount (as defined in the Note Purchase Agreements referred
to below), payable quarterly as aforesaid (or, at the option of the
registered holder hereof, on demand) at a rate per annum from time
to time equal to the greater of (i) 12.02% and (ii) 2% above the
rate of interest publicly announced by Citibank, N.A. from time to
time at its principal office in New York City as its "prime" rate
or "base" rate.
As used herein the term "Interest Payment Date" means
each March 15, June 15, September 15 and December 15.
Payments of principal of, interest on and any Make-Whole
Amount with respect to this Note are to be made in lawful money of
the United States of America at said principal office of Citibank,
N.A. in New York City or at such other place as the Company shall
have designated by written notice to the holder of this Note as
provided in the Note Purchase Agreements referred to below.
This Note is one of a series of Senior Notes issued
pursuant to separate Note Purchase Agreements dated as of June 15,
1995 (as from time to time amended, the "Note Purchase Agreements")
between the Company and the respective Purchasers named therein and
is entitled to the benefits thereof. Each holder of this Note will
be deemed, by its acceptance hereof, to have agreed to the
confidentiality provisions set forth in Section 20 of the Note
Purchase Agreements.
This Note is a registered Note and, as provided in the
Note Purchase Agreements, upon surrender of this Note for
registration of transfer, duly endorsed, or accompanied by a
written instrument of transfer duly executed, by the registered
holder hereof or such holder's attorney duly authorized in writing,
a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat the
person in whose name this Note is registered as the owner hereof
for the purpose of receiving payment and for all other purposes,
and the Company will not be affected by any notice to the contrary.
The Company will make required prepayments of principal
on the dates and in the amounts specified in the Note Purchase
Agreements. The Company is also required under circumstances
described in the Note Purchase Agreement to offer to prepay all
Notes on the terms specified in the Note Purchase Agreements, but
this Note may not otherwise be prepaid.
If an Event of Default, as defined in the Note Purchase
Agreements, occurs and in continuing, the principal of this Note
may be declared or otherwise become due and payable in the manner,
at the price (including any applicable premium or Make-Whole
Amount) and with the effect provided in the Note Purchase
Agreements.
This Note shall be construed and enforced in accordance
with, and the rights of the Company and the holder hereof shall be
governed by the laws of the State of New York, excluding choice-of
-law principles of such law.
SHOWBIZ PIZZA TIME, INC.
By Larry G. Page
Title: Chief Financial Officer
EXHIBIT 10(d)(1)
SHOWBIZ PIZZA TIME, INC.
10.02% SERIES A SENIOR NOTE DUE 2001
No.R-A5 New York, New York
$1,000,000 June 15, 1995
PPN 825388 A* 2
FOR VALUE RECEIVED, the undersigned, SHOWBIZ PIZZA TIME,
INC. (the "Company"), a Kansas corporation, hereby promises to pay
to C M LIFE INSURANCE CO., or registered assigns, the principal
sum of ONE MILLION DOLLARS on June 15, 2001, with interest
(computed on the basis of a 360-day year of twelve 30-day months)
(a) from the date hereof on the unpaid balance thereof at the rate
of 10.02% per annum, payable quarterly on each Interest Payment
Date (as below defined), until the principal hereof shall have
become due and payable, and (b) on any overdue payment of
principal, any overdue payment of interest (to the extent permitted
by applicable law) and any overdue payment of any premium of Make-
Whole Amount (as defined in the Note Purchase Agreements referred
to below), payable quarterly as aforesaid (or, at the option of the
registered holder hereof, on demand) at a rate per annum from time
to time equal to the greater of (i) 12.02% and (ii) 2% above the
rate of interest publicly announced by Citibank, N.A. from time to
time at its principal office in New York City as its "prime" rate
or "base" rate.
As used herein the term "Interest Payment Date" means
each March 15, June 15, September 15 and December 15.
Payments of principal of, interest on and any Make-Whole
Amount with respect to this Note are to be made in lawful money of
the United States of America at said principal office of Citibank,
N.A. in New York City or at such other place as the Company shall
have designated by written notice to the holder of this Note as
provided in the Note Purchase Agreements referred to below.
This Note is one of a series of Senior Notes issued
pursuant to separate Note Purchase Agreements dated as of June 15,
1995 (as from time to time amended, the "Note Purchase Agreements")
between the Company and the respective Purchasers named therein and
is entitled to the benefits thereof. Each holder of this Note will
be deemed, by its acceptance hereof, to have agreed to the
confidentiality provisions set forth in Section 20 of the Note
Purchase Agreements.
This Note is a registered Note and, as provided in the
Note Purchase Agreements, upon surrender of this Note for
registration of transfer, duly endorsed, or accompanied by a
written instrument of transfer duly executed, by the registered
holder hereof or such holder's attorney duly authorized in writing,
a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat the
person in whose name this Note is registered as the owner hereof
for the purpose of receiving payment and for all other purposes,
and the Company will not be affected by any notice to the contrary.
The Company will make required prepayments of principal
on the dates and in the amounts specified in the Note Purchase
Agreements. The Company is also required under circumstances
described in the Note Purchase Agreement to offer to prepay all
Notes on the terms specified in the Note Purchase Agreements, but
this Note may not otherwise be prepaid.
If an Event of Default, as defined in the Note Purchase
Agreements, occurs and in continuing, the principal of this Note
may be declared or otherwise become due and payable in the manner,
at the price (including any applicable premium or Make-Whole
Amount) and with the effect provided in the Note Purchase
Agreements.
This Note shall be construed and enforced in accordance
with, and the rights of the Company and the holder hereof shall be
governed by the laws of the State of New York, excluding choice-of
-law principles of such law.
SHOWBIZ PIZZA TIME, INC.
By Larry G. Page
Title: Chief Financial Officer
EXHIBIT 10(d)(2) - 10.02% Series A Note
SHOWBIZ PIZZA TIME, INC.
10.02% SERIES A SENIOR NOTE DUE 2001
No.R-A6 New York, New York
$1,000,000 June 15, 1995
PPN 825388 A* 2
FOR VALUE RECEIVED, the undersigned, SHOWBIZ PIZZA TIME,
INC. (the "Company"), a Kansas corporation, hereby promises to pay
to C M LIFE INSURANCE CO., or registered assigns, the principal
sum of ONE MILLION DOLLARS on June 15, 2001, with interest
(computed on the basis of a 360-day year of twelve 30-day months)
(a) from the date hereof on the unpaid balance thereof at the rate
of 10.02% per annum, payable quarterly on each Interest Payment
Date (as below defined), until the principal hereof shall have
become due and payable, and (b) on any overdue payment of
principal, any overdue payment of interest (to the extent permitted
by applicable law) and any overdue payment of any premium of Make-
Whole Amount (as defined in the Note Purchase Agreements referred
to below), payable quarterly as aforesaid (or, at the option of the
registered holder hereof, on demand) at a rate per annum from time
to time equal to the greater of (i) 12.02% and (ii) 2% above the
rate of interest publicly announced by Citibank, N.A. from time to
time at its principal office in New York City as its "prime" rate
or "base" rate.
As used herein the term "Interest Payment Date" means
each March 15, June 15, September 15 and December 15.
Payments of principal of, interest on and any Make-Whole
Amount with respect to this Note are to be made in lawful money of
the United States of America at said principal office of Citibank,
N.A. in New York City or at such other place as the Company shall
have designated by written notice to the holder of this Note as
provided in the Note Purchase Agreements referred to below.
This Note is one of a series of Senior Notes issued
pursuant to separate Note Purchase Agreements dated as of June 15,
1995 (as from time to time amended, the "Note Purchase Agreements")
between the Company and the respective Purchasers named therein and
is entitled to the benefits thereof. Each holder of this Note will
be deemed, by its acceptance hereof, to have agreed to the
confidentiality provisions set forth in Section 20 of the Note
Purchase Agreements.
This Note is a registered Note and, as provided in the
Note Purchase Agreements, upon surrender of this Note for
registration of transfer, duly endorsed, or accompanied by a
written instrument of transfer duly executed, by the registered
holder hereof or such holder's attorney duly authorized in writing,
a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat the
person in whose name this Note is registered as the owner hereof
for the purpose of receiving payment and for all other purposes,
and the Company will not be affected by any notice to the contrary.
The Company will make required prepayments of principal
on the dates and in the amounts specified in the Note Purchase
Agreements. The Company is also required under circumstances
described in the Note Purchase Agreement to offer to prepay all
Notes on the terms specified in the Note Purchase Agreements, but
this Note may not otherwise be prepaid.
If an Event of Default, as defined in the Note Purchase
Agreements, occurs and in continuing, the principal of this Note
may be declared or otherwise become due and payable in the manner,
at the price (including any applicable premium or Make-Whole
Amount) and with the effect provided in the Note Purchase
Agreements.
This Note shall be construed and enforced in accordance
with, and the rights of the Company and the holder hereof shall be
governed by the laws of the State of New York, excluding choice-of
-law principles of such law.
SHOWBIZ PIZZA TIME, INC.
By Larry G. Page
Title: Chief Financial Officer
EXHIBIT 10(e)(1) - Floating Rate Series B Senior Note
SHOWBIZ PIZZA TIME, INC.
FLOATING RATE SERIES B SENIOR NOTE DUE 2000
No. R-B1 New York, New York
$2,000,000 June 15, 1995
PPN 825388 A@ O
FOR VALUE RECEIVED, the undersigned, SHOWBIZ PIZZA TIME,
INC. (the "Company"), a Kansas corporation, hereby promises to pay
to MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY, or registered
assigns, the principal sum of TWO MILLION DOLLARS on June 15, 2000,
with interest (computed on the basis of actual days elapsed and a
year of 360 days) (a) from the date hereof on the unpaid balance
thereof, payable quarterly on each Interest Payment Date (as below
defined), at a rate per annum for each Interest Period (as defined
in the Note Purchase Agreements referred to below) equal to 3.5%
plus the LIBOR Rate (as so defined) as determined in respect of
such Interest Period pursuant to said Note Purchase Agreements,
until the principal hereof shall have become due and payable, and
(b) on any overdue payment of principal or (to the extent permitted
by applicable law) interest, payable quarterly as aforesaid (or, at
the option of the registered holder hereof, on demand) at a rate
per annum from time to time equal to 2% above the interest rate
then applicable to this Note, from the date of such default to and
including the last day of the Interest Period during which such
default occurs and thereafter at a rate per annum equal to 5.5%
above said LIBOR Rate (as so determined from time to time on the
basis of three-month Interest Periods).
The LIBOR Rate for the six-month Interest Period
commencing on the date of this Note is 6%.
As used herein the term "Interest Payment Date" means
each March 15, June 15, September 15 and December 15.
Payments of principal of, interest on and any premium
with respect to this Note are to be made in lawful money of the
United States of America at the principal office of Citibank, N.A.
in New York City or at such other place as the Company shall have
designated by written notice to the holder of this Note as provided
in the Note Purchase Agreements referred to below.
This Note is one of a series of Senior Notes issued
pursuant to separate Note Purchase Agreements dated as of June 15,
1995 (as from time to time amended, the "Note Purchase Agreements")
between the Company and the respective Purchasers named therein and
is entitled to the benefits thereof. Each holder of this Note will
be deemed, by its acceptance hereof, to have agreed to the
confidentiality provisions set forth in Section 20 of the Note
Purchase Agreements.
Pursuant to the Note Purchase Agreements the Company is
required to give written notice to the holder of this Note of the
duration of each Interest Period for this Note, and of the
applicable interest rate for such Interest Period as determined on
the Reset Date (as defined
in the Note Purchase Agreement) for such Interest Period. The
applicable LIBOR Rate and interest rate and duration of such
Interest Period for this Note shall be endorsed by the holder of
this Note on the schedule attached hereto or any continuation
thereof prior to any transfer of this Note.
This Note is a registered Note and, as provided in the
Note Purchase Agreements, upon surrender of this Note for
registration of transfer, duly endorsed, or accompanied by a
written instrument of transfer duly executed, by the registered
holder hereof or such holder's attorney duly authorized in writing,
a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat the
person in whose name this Note is registered as the owner hereof
for the purpose of receiving payment and for all other purposes,
and the Company will not be affected by any notice to the contrary.
The Company will make required prepayments of principal
on the Notes on the dates and in the amounts specified in the Note
Purchase Agreements. The Company is also required under
circumstances described in the Note Purchase Agreements to offer to
prepay all Notes on the terms specified in the Note Purchase
Agreements, but this Note may not otherwise be prepaid.
If an Event of Default, as defined in the Note Purchase
Agreements, occurs and is continuing, the principal of this Note
may be declared or otherwise become due and payable in the manner,
at the price and with the effect provided in the Note Purchase
Agreements.
This Note shall be construed and enforced in accordance
with, and the rights of the Company and the holder hereof shall be
governed by, the laws of the State of New York, excluding choice-
of-law principles of such law.
SHOWBIZ PIZZA TIME, INC.
By Larry G. Page
Title: Chief Financial Officer
Schedule of Interest Rate and Duration of Interest Period
Interest Rate
--------------------------
Duration of LIBOR Rate Notation
Reset Date Interest Period LIBOR Rate plus 3.5%) Made By
---------- -------------- ---------- ---------- -----------
EXHIBIT 10(e)(2) - Floating Rate Series B Senior Note
SHOWBIZ PIZZA TIME, INC.
FLOATING RATE SERIES B SENIOR NOTE DUE 2000
No. R-B2 New York, New York
$2,000,000 June 15, 1995
PPN 825388 A@ O
FOR VALUE RECEIVED, the undersigned, SHOWBIZ PIZZA TIME,
INC. (the "Company"), a Kansas corporation, hereby promises to pay
to MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY, or registered
assigns, the principal sum of TWO MILLION DOLLARS on June 15, 2000,
with interest (computed on the basis of actual days elapsed and a
year of 360 days) (a) from the date hereof on the unpaid balance
thereof, payable quarterly on each Interest Payment Date (as below
defined), at a rate per annum for each Interest Period (as defined
in the Note Purchase Agreements referred to below) equal to 3.5%
plus the LIBOR Rate (as so defined) as determined in respect of
such Interest Period pursuant to said Note Purchase Agreements,
until the principal hereof shall have become due and payable, and
(b) on any overdue payment of principal or (to the extent permitted
by applicable law) interest, payable quarterly as aforesaid (or, at
the option of the registered holder hereof, on demand) at a rate
per annum from time to time equal to 2% above the interest rate
then applicable to this Note, from the date of such default to and
including the last day of the Interest Period during which such
default occurs and thereafter at a rate per annum equal to 5.5%
above said LIBOR Rate (as so determined from time to time on the
basis of three-month Interest Periods).
The LIBOR Rate for the six-month Interest Period
commencing on the date of this Note is 6%.
As used herein the term "Interest Payment Date" means
each March 15, June 15, September 15 and December 15.
Payments of principal of, interest on and any premium
with respect to this Note are to be made in lawful money of the
United States of America at the principal office of Citibank, N.A.
in New York City or at such other place as the Company shall have
designated by written notice to the holder of this Note as provided
in the Note Purchase Agreements referred to below.
This Note is one of a series of Senior Notes issued
pursuant to separate Note Purchase Agreements dated as of June 15,
1995 (as from time to time amended, the "Note Purchase Agreements")
between the Company and the respective Purchasers named therein and
is entitled to the benefits thereof. Each holder of this Note will
be deemed, by its acceptance hereof, to have agreed to the
confidentiality provisions set forth in Section 20 of the Note
Purchase Agreements.
Pursuant to the Note Purchase Agreements the Company is
required to give written notice to the holder of this Note of the
duration of each Interest Period for this Note, and of the
applicable interest rate for such Interest Period as determined on
the Reset Date (as defined
in the Note Purchase Agreement) for such Interest Period. The
applicable LIBOR Rate and interest rate and duration of such
Interest Period for this Note shall be endorsed by the holder of
this Note on the schedule attached hereto or any continuation
thereof prior to any transfer of this Note.
This Note is a registered Note and, as provided in the
Note Purchase Agreements, upon surrender of this Note for
registration of transfer, duly endorsed, or accompanied by a
written instrument of transfer duly executed, by the registered
holder hereof or such holder's attorney duly authorized in writing,
a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat the
person in whose name this Note is registered as the owner hereof
for the purpose of receiving payment and for all other purposes,
and the Company will not be affected by any notice to the contrary.
The Company will make required prepayments of principal
on the Notes on the dates and in the amounts specified in the Note
Purchase Agreements. The Company is also required under
circumstances described in the Note Purchase Agreements to offer to
prepay all Notes on the terms specified in the Note Purchase
Agreements, but this Note may not otherwise be prepaid.
If an Event of Default, as defined in the Note Purchase
Agreements, occurs and is continuing, the principal of this Note
may be declared or otherwise become due and payable in the manner,
at the price and with the effect provided in the Note Purchase
Agreements.
This Note shall be construed and enforced in accordance
with, and the rights of the Company and the holder hereof shall be
governed by, the laws of the State of New York, excluding choice-
of-law principles of such law.
SHOWBIZ PIZZA TIME, INC.
By Larry G. Page
Title: Chief Financial Officer
Schedule of Interest Rate and Duration of Interest Period
Interest Rate
-----------------------
Duration of (LIBOR Rate Notation
Reset Date Interest Period LIBOR Rate plus 3.5%) Made By
---------- --------------- ---------- ---------- ---------
EXHIBIT 10(e)(3) - Floating Rate Series B Senior Note
SHOWBIZ PIZZA TIME, INC.
FLOATING RATE SERIES B SENIOR NOTE DUE 2000
No. R-B3 New York, New York
$2,000,000 June 15, 1995
PPN 825388 A@ O
FOR VALUE RECEIVED, the undersigned, SHOWBIZ PIZZA TIME,
INC. (the "Company"), a Kansas corporation, hereby promises to pay
to MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY, or registered
assigns, the principal sum of TWO MILLION DOLLARS on June 15, 2000,
with interest (computed on the basis of actual days elapsed and a
year of 360 days) (a) from the date hereof on the unpaid balance
thereof, payable quarterly on each Interest Payment Date (as below
defined), at a rate per annum for each Interest Period (as defined
in the Note Purchase Agreements referred to below) equal to 3.5%
plus the LIBOR Rate (as so defined) as determined in respect of
such Interest Period pursuant to said Note Purchase Agreements,
until the principal hereof shall have become due and payable, and
(b) on any overdue payment of principal or (to the extent permitted
by applicable law) interest, payable quarterly as aforesaid (or, at
the option of the registered holder hereof, on demand) at a rate
per annum from time to time equal to 2% above the interest rate
then applicable to this Note, from the date of such default to and
including the last day of the Interest Period during which such
default occurs and thereafter at a rate per annum equal to 5.5%
above said LIBOR Rate (as so determined from time to time on the
basis of three-month Interest Periods).
The LIBOR Rate for the six-month Interest Period
commencing on the date of this Note is 6%.
As used herein the term "Interest Payment Date" means
each March 15, June 15, September 15 and December 15.
Payments of principal of, interest on and any premium
with respect to this Note are to be made in lawful money of the
United States of America at the principal office of Citibank, N.A.
in New York City or at such other place as the Company shall have
designated by written notice to the holder of this Note as provided
in the Note Purchase Agreements referred to below.
This Note is one of a series of Senior Notes issued
pursuant to separate Note Purchase Agreements dated as of June 15,
1995 (as from time to time amended, the "Note Purchase Agreements")
between the Company and the respective Purchasers named therein and
is entitled to the benefits thereof. Each holder of this Note will
be deemed, by its acceptance hereof, to have agreed to the
confidentiality provisions set forth in Section 20 of the Note
Purchase Agreements.
Pursuant to the Note Purchase Agreements the Company is
required to give written notice to the holder of this Note of the
duration of each Interest Period for this Note, and of the
applicable interest rate for such Interest Period as determined on
the Reset Date (as defined in the Note Purchase Agreement) for such
Interest Period. The applicable LIBOR Rate and interest rate and
duration of such Interest Period for this Note shall be endorsed by
the holder of this Note on the schedule attached hereto or any
continuation thereof prior to any transfer of this Note.
This Note is a registered Note and, as provided in the
Note Purchase Agreements, upon surrender of this Note for
registration of transfer, duly endorsed, or accompanied by a
written instrument of transfer duly executed, by the registered
holder hereof or such holder's attorney duly authorized in writing,
a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat the
person in whose name this Note is registered as the owner hereof
for the purpose of receiving payment and for all other purposes,
and the Company will not be affected by any notice to the contrary.
The Company will make required prepayments of principal
on the Notes on the dates and in the amounts specified in the Note
Purchase Agreements. The Company is also required under
circumstances described in the Note Purchase Agreements to offer to
prepay all Notes on the terms specified in the Note Purchase
Agreements, but this Note may not otherwise be prepaid.
If an Event of Default, as defined in the Note Purchase
Agreements, occurs and is continuing, the principal of this Note
may be declared or otherwise become due and payable in the manner,
at the price and with the effect provided in the Note Purchase
Agreements.
This Note shall be construed and enforced in accordance
with, and the rights of the Company and the holder hereof shall be
governed by, the laws of the State of New York, excluding choice-
of-law principles of such law.
SHOWBIZ PIZZA TIME, INC.
By Larry G. Page
Title: Chief Financial Officer
Schedule of Interest Rate and Duration of Interest Period
Interest Rate
----------------------
Duration of (LIBOR Rate Notation
Reset Date Interest Period LIBOR Rate plus 3.5%) Made By
---------- ---------------- --------- ----------- -------
EXHBIT 10(f)(1) - Floating Rate Series B Senior Note
SHOWBIZ PIZZA TIME, INC.
FLOATING RATE SERIES B SENIOR NOTE DUE 2000
No. R-B4 New York, New York
$4,000,000 June 15, 1995
PPN 825388 A@ O
FOR VALUE RECEIVED, the undersigned, SHOWBIZ PIZZA TIME,
INC. (the "Company"), a Kansas corporation, hereby promises to pay
to WEBELL & CO., or registered assigns, the principal sum of FOUR
MILLION DOLLARS on June 15, 2000, with interest (computed on the
basis of actual days elapsed and a year of 360 days) (a) from the
date hereof on the unpaid balance thereof, payable quarterly on
each Interest Payment Date (as below defined), at a rate per annum
for each Interest Period (as defined in the Note Purchase
Agreements referred to below) equal to 3.5% plus the LIBOR Rate (as
so defined) as determined in respect of such Interest Period
pursuant to said Note Purchase Agreements, until the principal
hereof shall have become due and payable, and (b) on any overdue
payment of principal or (to the extent permitted by applicable law)
interest, payable quarterly as aforesaid (or, at the option of the
registered holder hereof, on demand) at a rate per annum from time
to time equal to 2% above the interest rate then applicable to this
Note, from the date of such default to and including the last day
of the Interest Period during which such default occurs and
thereafter at a rate per annum equal to 5.5% above said LIBOR Rate
(as so determined from time to time on the basis of three-month
Interest Periods).
The LIBOR Rate for the six-month Interest Period
commencing on the date of this Note is 6%.
As used herein the term "Interest Payment Date" means
each March 15, June 15, September 15 and December 15.
Payments of principal of, interest on and any premium
with respect to this Note are to be made in lawful money of the
United States of America at the principal office of Citibank, N.A.
in New York City or at such other place as the Company shall have
designated by written notice to the holder of this Note as provided
in the Note Purchase Agreements referred to below.
This Note is one of a series of Senior Notes issued
pursuant to separate Note Purchase Agreements dated as of June 15,
1995 (as from time to time amended, the "Note Purchase Agreements")
between the Company and the respective Purchasers named therein and
is entitled to the benefits thereof. Each holder of this Note will
be deemed, by its acceptance hereof, to have agreed to the
confidentiality provisions set forth in Section 20 of the Note
Purchase Agreements.
Pursuant to the Note Purchase Agreements the Company is
required to give written notice to the holder of this Note of the
duration of each Interest Period for this Note, and of the
applicable interest rate for such Interest Period as determined on
the Reset Date (as defined in the Note Purchase Agreement) for such
Interest Period. The applicable LIBOR Rate and interest rate and
duration of such Interest Period for this Note shall be endorsed by
the holder of this Note on the schedule attached hereto or any
continuation thereof prior to any transfer of this Note.
This Note is a registered Note and, as provided in the
Note Purchase Agreements, upon surrender of this Note for
registration of transfer, duly endorsed, or accompanied by a
written instrument of transfer duly executed, by the registered
holder hereof or such holder's attorney duly authorized in writing,
a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat the
person in whose name this Note is registered as the owner hereof
for the purpose of receiving payment and for all other purposes,
and the Company will not be affected by any notice to the contrary.
The Company will make required prepayments of principal
on the Notes on the dates and in the amounts specified in the Note
Purchase Agreements. The Company is also required under
circumstances described in the Note Purchase Agreements to offer to
prepay all Notes on the terms specified in the Note Purchase
Agreements, but this Note may not otherwise be prepaid.
If an Event of Default, as defined in the Note Purchase
Agreements, occurs and is continuing, the principal of this Note
may be declared or otherwise become due and payable in the manner,
at the price and with the effect provided in the Note Purchase
Agreements.
This Note shall be construed and enforced in accordance
with, and the rights of the Company and the holder hereof shall be
governed by, the laws of the State of New York, excluding choice-
of-law principles of such law.
SHOWBIZ PIZZA TIME, INC.
By Larry G. Page
Title: Chief Financial Officer
Schedule of Interest Rate and Duration of Interest Period
Interest Rate
---------------------
Duration of (LIBOR Rate Notation
Reset Date Interest Period LIBOR Rate plus 3.5%) Made By
---------- -------------- ----------- ---------- ---------
EXHIBIT 10(g)(1) - 10.02% Series A Senior Note
SHOWBIZ PIZZA TIME, INC.
10.02% SERIES A SENIOR NOTE DUE 2001
No. R-A7 New York, New York
$3,000,000 June 15, 1995
PPN 825388 A* 2
FOR VALUE RECEIVED, the undersigned, SHOWBIZ PIZZA TIME,
INC. (the "Company"), a Kansas corporation, hereby promises to pay
to MODERN WOODMEN OF AMERICA, or registered assigns, the principal
sum of THREE MILLION DOLLARS on June 15, 2001, with interest
(computed on the basis of a 360-day year of twelve 30-day months)
(a) from the date hereof on the unpaid balance thereof at the rate
of 10.02% per annum, payable quarterly on each Interest Payment
Date (as below defined), until the principal hereof shall have
become due and payable, and (b) on any overdue payment of
principal, any overdue payment of interest (to the extent permitted
by applicable law) and any overdue payment of any premium of Make-
Whole Amount (as defined in the Note Purchase Agreements referred
to below), payable quarterly as aforesaid (or, at the option of the
registered holder hereof, on demand) at a rate per annum from time
to time equal to the greater of (i) 12.02% and (ii) 2% above the
rate of interest publicly announced by Citibank, N.A. from time to
time at its principal office in New York City as its "prime" rate
or "base" rate.
As used herein the term "Interest Payment Date" means
each March 15, June 15, September 15 and December 15.
Payments of principal of, interest on and any Make-Whole
Amount with respect to this Note are to be made in lawful money of
the United States of America at said principal office of Citibank,
N.A. in New York City or at such other place as the Company shall
have designated by written notice to the holder of this Note as
provided in the Note Purchase Agreements referred to below.
This Note is one of a series of Senior Notes issued
pursuant to separate Note Purchase Agreements dated as of June 15,
1995 (as from time to time amended, the "Note Purchase Agreements")
between the Company and the respective Purchasers named therein and
is entitled to the benefits thereof. Each holder of this Note will
be deemed, by its acceptance hereof, to have agreed to the
confidentiality provisions set forth in Section 20 of the Note
Purchase Agreements.
This Note is a registered Note and, as provided in the
Note Purchase Agreements, upon surrender of this Note for
registration of transfer, duly endorsed, or accompanied by a
written instrument of transfer duly executed, by the registered
holder hereof or such holder's attorney duly authorized in writing,
a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat the
person in whose name this Note is registered as the owner hereof
for the purpose of receiving payment and for all other purposes,
and the Company will not be affected by any notice to the contrary.
The Company will make required prepayments of principal
on the dates and in the amounts specified in the Note Purchase
Agreements. The Company is also required under circumstances
described in the Note Purchase Agreement to offer to prepay all
Notes on the terms specified in the Note Purchase Agreements, but
this Note may not otherwise be prepaid.
If an Event of Default, as defined in the Note Purchase
Agreements, occurs and in continuing, the principal of this Note
may be declared or otherwise become due and payable in the manner,
at the price (including any applicable premium or Make-Whole
Amount) and with the effect provided in the Note Purchase
Agreements.
This Note shall be construed and enforced in accordance
with, and the rights of the Company and the holder hereof shall be
governed by the laws of the State of New York, excluding choice-of
-law principles of such law.
SHOWBIZ PIZZA TIME, INC.
By Larry G. Page
Title: Chief Financial Officer
EXHIBIT 10(h)(1) - Loan Agreement
=================================================================
LOAN AGREEMENT
between
BANK ONE, TEXAS, N.A.
and
SHOWBIZ PIZZA TIME, INC.
--------------------------
dated as of June 27, 1995
---------------------------
=================================================================
LOAN AGREEMENT, dated as of June 27, 1995, between SHOWBIZ
PIZZA TIME, INC., a Kansas corporation ("Company"), and BANK ONE,
TEXAS, N.A., as lender hereunder and as issuer of Letters of Credit
(capitalized terms are defined in Article I hereto) ("Bank One").
WHEREAS, the Company has applied to Bank One for, and Bank One
is willing to, among other things, provide for, a revolving credit
facility and secured and unsecured letter of credit facilities,
upon the terms and subject to the conditions set forth herein;
NOW, THEREFORE, on the basis of the premises and for good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Defined Terms. As used in this Agreement, the
terms defined in the recitals hereto shall have the respective
meanings ascribed thereto in said recitals and the following terms
shall have the following respective meanings:
"Adjusted LIBO Rate" shall mean, with respect to
any Interest Period applicable to any LIBO Rate Loan, the
rate of interest per annum, as determined by Bank One,
equal to the quotient (rounded to the nearest 1/100 of
1.00% or, if there is no nearest 1/100 of 1.00%, then to
the next higher 1/100 of 1.00%) obtained by dividing the
LIBO Base Rate by an amount equal to the result obtained
by subtracting the Eurodollar Reserve Percentage
(expressed as a decimal) from 1.00. The Adjusted LIBO
Rate shall be adjusted automatically on and as of the
opening of business on the effective date of any change
in the Eurodollar Reserve Percentage.
"Affiliate" means, at any time, and with respect to
any Person, (a) any other Person that at such time
directly or indirectly through one or more intermediaries
Controls, or is Controlled by, or is under common Control
with, such first Person, and (b) any Person beneficially
owing or holding, directly or indirectly, 10% or more of
any class of voting or equity interests of the Company or
any Subsidiary or any Corporation of which the Company
and its Subsidiaries beneficially own or hold, in the
aggregate, directly or indirectly, 10% or more of any
class of voting or equity interests. As used in this
definition, "Control" means the possession, indirectly or
indirectly, of the power to direct or cause the direction
of the management and policies of a Person, whether
through the ownership of voting securities, by contract
or otherwise. Unless the context otherwise clearly
requires, any reference to an "Affiliate" is a reference
to an Affiliate of the Company.
"Agreement" shall mean this Loan Agreement, as the
same may be amended and supplemented from time to time.
"Applicable Margin" shall mean, at all times during the
applicable periods or portions thereof, (i) unless an Event of
Default has occurred and is continuing, (A) 0.50% per annum
with respect to Prime Rate Loans and (B) 3.00% per annum with
respect to LIBO Rate Loans, and (ii) during the continuance of
an Event of Default and prior to the earlier of Maturity or
the expiration of the applicable Interest Period, if any, (A)
2.50% per annum with respect to Prime Rate Loans and (B) 5.00%
per annum with respect to LIBO Rate Loans.
"Asset Sale" shall mean any direct or indirect sale,
transfer, lease (as lessor), loan or other disposition of
any property or assets.
"Banking Day" shall mean any Business Day other than
a day on which commercial banks are required or
authorized by law to be closed in London, England.
"Board" shall mean the Board of Governors of the
Federal Reserve System.
"Capital Lease" shall mean, at any time, a lease
with respect to which the lessee is required concurrently
to recognize the acquisition of an asset and the
incurrence of a liability in accordance with GAAP.
"Capitalized Lease Obligations" shall mean with
respect to any Person, all outstanding obligations of
such Person in respect of Capital Leases, taken at the
capitalized amount thereof accounted for as indebtedness
in accordance with GAAP.
"Change of Control" shall mean (a) the acquisition
through purchase or otherwise (including the agreement to
act in concert with more), by any Person or "group"
(within the meaning of Section 13(d) or 14(d) of the
Exchange Act) directly or indirectly, in one or more
transactions, of the beneficial ownership or control of
securities representing more than 25% of the combined
voting power of the Company's Voting stock or (b) the
acquisition by an Person, entity or "group" (within the
meaning of Section 13(d) or 14(d) of the Exchange Act),
of the power (whether or not exercised) to elect a
majority of the Board of Directors of the Company. For
purposes of this definition, "beneficial ownership" shall
have the meaning set forth in Rule 13d-3 of the
Securities and Exchange Commission adopted pursuant to
the Exchange Act.
"Code" shall mean the Internal Revenue Code of 1986,
as amended from time to time, and the rules and
regulations promulgated thereunder from time to time.
"Commitments" shall mean the Revolving Credit
Commitment, the Secured LC Commitment and the Unsecured
LC Commitment as from time to time in effect.
"Commitment Period" at any date shall mean the
period from and including the Effective Date to, but
excluding, the Termination Date.
"Confidential Information" shall mean information
delivered to Bank One by or on behalf of the Company or
any Subsidiary in connection with the transactions
contemplated by or otherwise pursuant to this Agreement
or the other Loan Documents that is proprietary in nature
and that was clearly marked or labeled or otherwise
adequately identified when received by Bank One as being
confidential information of the Company or such
Subsidiary, provided that such term does not include
information that (a) was publicly known or otherwise
known to Bank One prior to the time of such disclosure,
(b) subsequently becomes publicly known through no act or
omission by Bank One or any person acting on its behalf,
(c) otherwise becomes known to Bank One other than
through disclosure by the Company or any Subsidiary or
(d) constitutes financial statements delivered to Bank
One under Section 6.1 hereof that are otherwise publicly
available.
"Consolidated Capitalization" shall mean, at any
date, the sum of (a) Consolidated Indebtedness plus (b)
Consolidated Net Worth plus (c) deferred tax liabilities
(if any), all as determined on a consolidated basis for
the Company and its Subsidiaries in accordance with GAAP.
"Consolidated Fixed Charge Coverage Ratio" shall
mean, for any period, the ratio of (i) the sum of (A)
EBITDA for such period, plus (B) Consolidated Operating
Lease Rental for such period to (ii) the sum of (A)
Consolidated Interest Expense for such period plus (B)
Consolidated Operating Lease Rentals for such period.
"Consolidated Indebtedness" shall mean, at any date,
all Indebtedness of the Company and its Subsidiaries
determined on a consolidated basis in accordance with
GAAP.
"Consolidated Interest Expense" shall mean for any
period means the sum for the Company and its
Subsidiaries, determined on a consolidated basis in
accordance with GAAP, of all amounts which would be
deducted in computing Consolidated Net Income on account
of interest on Indebtedness (including imputed interest
in respect of Capitalized Lease Obligations and
amortization of debt discount and expense).
"Consolidated Net Income" shall mean for any period
means the net income of the Company and its Subsidiaries
for such period, determined on a consolidated basis in
accordance with GAAP, excluding
(i) the proceeds of any life insurance policy,
(ii) any gains arising from (a) the sale or other
disposition of any assets (other than current assets) to
the extent that the aggregate amount of the gains during
such period exceeds the aggregate amount of the losses
during such period from the sale, abandonment or other
disposition of assets (other than current assets), (b)
any write-up of assets or (c) the acquisition of
outstanding securities of the Company or any Subsidiary,
(iii) any amount representing any interest in the
undistributed earnings of any other Person (other than a
Subsidiary),
(iv) any earnings, prior to the date of acquisition,
of any Person acquired in any manner, and any earnings of
any Subsidiary acquired prior to its becoming a
Subsidiary,
(v) any earnings of a successor to or transferee of
the assets of the Company prior to its becoming such
successor or transferee,
(vi) any deferred credit (or amortization of a
deferred credit) arising from the acquisition of any
Person, and
(vii) any extraordinary gains not covered by clause
(ii) above.
"Consolidated Net Worth" shall mean, at any date, on a
consolidated basis for the Company and its Subsidiaries, (a)
the sum of (i) capital stock taken at par or stated value plus
(ii) capital in excess of par or stated value relating to
capital stock plus (iii) retained earnings (or minus any
retained earning deficit) minus (b) the sum of capital stock
constituting treasury stock, capital stock subscribed for and
unissued, deferred compensation and other contra-equity
accounts, all determined in accordance with GAAP.
"Consolidated Operating Lease Rentals" shall mean,
for any period, the sum of the rental and other
obligations required to be paid by the Company and its
Subsidiaries as lessee under all leases of real or
personal property (other than Capital Leases), excluding
any amounts required to be paid by the lessee (whether or
not therein designated as rental or additional rental) on
account of maintenance and repairs, insurance, taxes,
assessments, water rates and similar charges, all
determined on a consolidated basis in accordance with
GAAP.
"Default" shall mean an event or condition the
occurrence or existence of which would, with the lapse of
time or the giving of notice or both, become an Event of
Default.
"Disclosure Documents" has the meaning provided in
Section 4.3 hereof.
"Dollars" and "$" shall mean dollars in lawful
currency of the United States of America.
"EBITDA" shall mean, for any period, Consolidated
Net Income plus all amounts deducted in the computation
thereof on account of (a) Consolidated Interest Expense,
(b) depreciation and amortization expenses (including
amortization of deferred compensation) and other non-cash
charges, (c) income and profits taxes and (d)
extraordinary losses (if any) of the type described in
clauses (ii) through (vii) of the definition of
"Consolidated Net Income" that are deducted in
determining Consolidated Net Income for such period.
"Effective Date" of this Agreement shall mean the
date on which (i) counterparts of this Agreement executed
and delivered by the parties hereto shall have been
received by Bank One and (ii) the conditions precedent
set forth in Article V hereto shall have been satisfied
or waived in writing by Bank One.
"Eligible Affiliate" shall mean, as of any date of
determination, any Affiliate of the Company (other than
a Subsidiary) that would qualify as a Subsidiary if the
Company were to exercise its then existing rights to
acquire additional Voting Stock in such Affiliate;
provided, however, that, as of the date hereof, "Eligible
Affiliate" shall include all entities listed on Schedule
4.4 hereto under the caption "Subsidiaries" that do not
qualify as a Subsidiary.
"Eligible LC Collateral" shall mean, with respect to
any Letter of Credit, Short Term Investments (i) in an
aggregate face amount (reduced for any unaccreted
discount) at least equal to 100% of the stated amount of
such Letter of Credit, and (ii) of a type and issuer and
maturing on or before a date or dates satisfactory to
Bank One in its discretion.
"Environmental Laws" means any and all Federal,
state, local, and foreign statutes, laws, regulations,
ordinances, rules, judgments, orders, decrees, permits,
concessions, grants, franchises, licenses, agreements or
governmental restrictions relating to pollution and the
protection of the environment or the release of any
materials into the environment, including but not limited
to those related to hazardous substances or wastes, air
emissions and discharges to waste or public systems.
"ERISA" means the Employee Retirement Income
Security Act of 1974, as amended from time to time, and
the rules and regulations promulgated thereunder from
time to time in effect.
"ERISA Affiliate" means any trade or business
(whether or not incorporated) that is treated as a single
employer together with the company under Section 414 of
the Code.
"Eurodollar Reserve Percentage" shall mean, with
respect to the calculation of the Adjusted LIBO Rate, the
percentage (expressed as a decimal) that is in effect on
each date included in such calculation, as prescribed by
the Board for determining the maximum reserve requirement
(including without limitation by basic, marginal,
special, supplemental or emergency reserves and
determined without benefit of any credits for proration,
exceptions, or offsets that may be available from time to
time) for a member bank of the Federal Reserve System
applicable to Eurocurrency funding by such member bank,
currently referred to as "Eurocurrency liabilities" in
Regulation D of the Board (or in respect of any other
category of liabilities, which includes deposits by
reference to which the interest rate on LIBO Rate Loans
is determined, or any category of extensions of credit or
other assets, including loans by a non-United States
office of Bank One to United States residents).
"Event of Default" shall mean any of the events
specified in Section 9.1 hereof.
"GAAP" shall mean generally accepted accounting
principles in the United States of America as in effect
from time to time.
"Governmental Authority" means
(a) the government of
(i) the United States of
America or any Sate or other
political subdivision thereof, or
(ii) any jurisdiction in which
the company or any Subsidiary
conducts all or any part of its
business, or which asserts
jurisdiction over any properties of
the Company or any Subsidiary, or
(b) any entity exercising executive,
legislative, judicial, regulatory or
administrative functions of, or pertaining to,
any such government.
"Guaranty" means, with respect to any Person, any
obligation (except the endorsement in the ordinary course
of business of negotiable instruments for deposit or
collection) of such Person guaranteeing or in effect
guaranteeing any Indebtedness, dividend or other
obligation of any other Person in any manner, whether
directly or indirectly, including without limitation
obligations incurred through an agreement, contingent or
otherwise, by such Person:
(a) to purchase such Indebtedness or
obligation or any property constituting
security therefor;
(b) to advance or supply funds (i) for
the purchase or payment of such indebtedness
or obligation, or (ii) to maintain any working
capital or other balance sheet condition or
any income statement condition of any other
Person or otherwise to advance or make
available funds for the purchase or payment of
such Indebtedness or obligation;
(c) to lease properties or to purchase
properties or services primarily for the
purpose of assuring the owner of such
Indebtedness or obligation of the ability of
any other Person to make payment of the
indebtedness or obligation; or
(d) otherwise to assure the owner of
such Indebtedness or obligation against loss
in respect thereof.
In any computation of the Indebtedness or other
liabilities of the obligor under any Guaranty, the
Indebtedness or other obligations that are the subject of
such Guaranty shall be assumed to be direct obligations
of such obligor.
"Hazardous Materials" means any and all pollutants,
toxic or hazardous wastes or any other substances that
might pose a hazard to health or safety, the removal of
which may be required or the generation, manufacture,
refining, production, processing, treatment, storage,
handling, transportation, transfer, use, disposal,
release, discharge, spillage, seepage, or filtration of
which is or shall be restricted, prohibited or penalized
by any applicable law (including without limitation
asbestos, urea formaldehyde foam insulation and
polycholorinated biphenyls).
"Indebtedness" with respect to any Person means, at
any time, without duplication,
(a) its liabilities for borrowed money,
(b) its liabilities for the deferred
purchase price of property acquired by such
Person (excluding accounts payable arising in
the ordinary course of business and not
overdue but including all liabilities created
or arising under any conditional sale or other
title retention agreement with respect to any
such property),
(c) its Capitalized Lease Obligations,
(d) all liabilities for borrowed money
secured by any Lien with respect to any
property owned by such Person (whether or not
it has assumed or otherwise become liable for
such liabilities),
(e) all its liabilities in respect of
letters of credit or instruments serving a
similar function issued or accepted for its
account by banks and other financial
institutions (whether or not representing
obligations for borrowed money),
(f) Swaps of such Person, and
(g) any Guaranty of such Person with
respect to liabilities of a type described in
any of clauses (a) through (f) above.
Indebtedness of any Person shall include all obligations
of such Person of the character described in clauses (a)
through (g) above to the extent such Person remains
legally liable in respect thereof notwithstanding that
any such obligation is deemed to be extinguished under
GAAP.
"Initial Revolving Credit Loan" shall mean the
Revolving Credit Loan or Loans made by Bank
One to the Company on the Effective Date.
"Initial Term" shall mean period from the Effective
Date to and including June 27, 1997.
"Interest Period" shall mean, with respect to a LIBO
Rate Loan, a period of borrowing commencing on and
including the date of advance, continuation or conversion
and ending on the numerically corresponding date that is
one, two, three or six months thereafter, as set forth in
the Loan Request, during which such Loan bears interest
at a particular fixed rate based on the Adjusted LIBO
Rate. Notwithstanding the foregoing:
(A). if the numerically
corresponding date in the
appropriate month is not a Bank Day,
such Interest Period shall be
extended to the next succeeding day
that is a Banking Day unless such
day falls in the succeeding calendar
month, in which event such Interest
Period shall end on the first
preceding day that is a Banking Day;
(B). if there is no
numerically corresponding date in
the appropriate month, such Interest
Period shall end on the last Banking
Day in such month, and
(C). in no case shall an
Interest Period end on a date
subsequent to the Termination Date.
"Investment" in any Person shall mean any loan,
advance, or extension of credit to or for the account of;
any guaranty, endorsement or other direct or indirect
contingent liability in connection with the obligations,
capital stock or dividends of; any ownership, purchase or
acquisition of any assets, business, capital stock,
obligations or securities of; or any other interest in or
capital contribution to; such Person.
"Letter of Credit" shall mean a standby letter of
credit issued by Bank One pursuant to and in accordance
with Section 2.15
"Letter of Credit Application" shall have the
meaning set forth in Section 5.3.
"LIBO Base Rate" shall mean, with respect to any
Interest Period, the rate, determined by Bank One, as the
rate per annum (rounded to the nearest 1/100 of 1.00% or,
if there is no nearest 1/100 of 1.00%, then to the next
higher 1/100 of 1.00%) at which deposits in Dollars are
offered in an amount comparable to the principal amount
of the LIBO Rate Loan and having a scheduled maturity
comparable to such Interest Period (as set forth in the
Loan Request) for delivery in immediately available funds
on the first day of such Interest Period on the display
designated as "Page 3750" on Telerate Access Service (or
such other display as may replace Page 3750 on Telerate
Access Service) as of 11:00 a.m., London time, on the
date that is two Banking Days preceding such Interest
Period; and if such rate does not appear on Telerate Page
3750 (or such other display), the rate for that Interest
Period will be determined on the basis of rates on which
deposits in Dollars are offered by the Reference Banks at
approximately 11:00 a.m., London time, on the day that is
two Banking Days preceding the commencement of the
Interest Period to prime banks in the London interbank
market in an amount comparable to the principal amount of
the LIBO Rate Loan and having a scheduled maturity
comparable to such Interest Period (as set forth in the
Loan Request) for delivery in immediately available funds
on the first day of such Interest Period. Bank One will
request the principal London office of each of the
Reference Banks to provide a quotation of its rate. If
at lease two such quotations are provided, the rate for
that Interest Period will be the arithmetic means of the
quotations. If fewer than two quotations are provided as
requested, the rate for that Interest Period will be the
arithmetic mean of the rates quoted by major banks in New
York City, selected by Bank One, at approximately 11:00
a.m., New York City time, on the first day of such
Interest Period for loans in Dollars to leading European
banks in an amount comparable to the principal amount of
the LIBO Rate Loan and having a scheduled maturity
comparable to such Interest Period (as set forth in the
Loan Request) for delivery in immediately available funds
on the first day of such Interest Period.
"LIBO Rate Loan" shall mean a Revolving Credit Loan
bearing interest during an Interest Period applicable to
such Revolving Credit Loan at a rate or rates determined
by reference to the Adjusted LIBO Rate.
"Lien" shall mean, with respect to any Person, any
mortgage, lien, pledge, charge, security interest or
other encumbrance, or any interest or title of any
vendor, lessor, lender or other secured party to or of
such Person under any conditional sale or other retention
agreement or Capital Lease, upon or with respect to any
property or asset of such Person (including in the case
of stock, stockholder agreements, voting trust agreements
and all similar arrangements).
"Loan Documents" shall mean and include this
Agreement, the Revolving Credit notes, any Loan Request
and any Letter of Credit Application.
"Loan Request" shall mean a request for one or more
Revolving Credit Loans, as the case may be, or for the
continuation or conversion of Revolving Credit Loans,
substantially in the form of Exhibit B hereto, executed
by a Responsible Officer on behalf of the Company.
"Material" shall mean material in relation to the
business, operations, affairs, financial condition,
profits, assets, properties or prospects of the Company
and its Subsidiaries taken as a whole.
"Material Adverse Affect" shall mean a material adverse
effect on (a) the business, operations, affairs, financial
condition, profits, assets, properties or prospects of the
Company and its Subsidiaries taken as a whole, (b) the ability
of the company to perform its obligations under this Agreement
and the other Loan Documents or (c) the validity or
enforceability of this Agreement or the Loan Documents.
"Memorandum" has the meaning provided in Schedule
4.3 hereof.
"Minority Affiliate" shall mean each entity listed
on Schedule 4.4 hereto under the caption "Affiliates".
"Multiemployer Plan" shall mean any Plan that is a
"multiemployer plan" (as such term is defined in Section
4001(a)(3) of ERISA).
"Note(s)" or "Revolving Credit Note(s)" shall mean
the promissory note(s) of the Company referred to in
Section 2.2 hereof and shall include any replacement(s)
therefor issued pursuant to Section 10.17 hereof.
"Officer's Certificate" means a certificate of a
Senior Financial Officer or of any other officer of the
Company whose responsibilities extend to the subject
matter of such certificate.
"Participant" shall mean any financial institution
or other Person now or hereafter participating by
contract directly or indirectly in the rights and/or
obligations of Bank One under this Agreement, the
Commitments, any Letter of Credit or any Revolving Credit
Loan.
"PBGC" shall mean the Pension Benefit Guaranty
Corporation referred to and defined in ERISA or any
successor thereto.
"Person" means an individual, partnership,
corporation, limited liability company, association,
trust, unincorporated organization, or a government or
agency or political subdivision thereof.
"Plan" means an "employee benefit plan" (as defined
in section 3(3) of ERISA) that is or, within the
preceding five years, has been established or maintained,
or to which contributions are or, within the preceding
five years, have been made or required to be made, by the
Company or any ERISA Affiliate or with respect to which
the Company or any ERISA Affiliate may have any
liability.
"Prime Rate" shall mean the annual rate of interest
announced by Bank One from time to time as its "Texas
base rate" in effect at its principal office in the
Dallas, Texas. The Prime Rate is determined as a means
of pricing for United States based customers and is not
directly fixed to any external rate of interest or index,
nor is it necessarily the lowest rate of interest charged
by Bank One at any given time for any particular class of
customers or credit extensions.
"Prime Rate Loan" shall mean, as of any date of
determination, a Revolving Credit Loan bearing interest,
as of such date of determination, at a variable rate of
interest determined by reference to the Prime Rate.
"Prohibited Payment" shall mean with respect to any
Person (the "Referenced Person") any of the following
when paid (or when the proceeds of which are paid) by or
on behalf of the Referenced Person to any other Person:
(i) any defeasance, redemption,
repurchase or other acquisition or retirement
for value prior to scheduled maturity of any
Indebtedness (A) ranked subordinate in right
of payment to the Revolving Credit Notes or
(B) having a maturity date subsequent to the
maturity of the Revolving Credit Notes,
(ii) any expenditure or the incurrence of any
liability to make any expenditure for any
Restricted Investment, or
(iii) the payment of any principal of,
interest on, or any amounts due in respect of,
any Indebtedness not permitted by Section 8.4
hereof.
"Property" or "property" shall mean, unless
otherwise specifically limited, real or personal property
of any kind, tangible or intangible, choate or inchoate.
"Reference Banks" means four major banks in the
London interbank market, selected by Bank One.
"Renewal Term" shall mean each successive one-year
period after the Initial Term during which the
Commitments of Bank One shall have been extended in
accordance with the provisions of Section 2.11 hereof.
"Responsible Officer" means any Senior Financial
Officer and any other officer of the Company with
responsibility for the administration of the relevant
portion of any Loan Document.
"Restricted Investment" shall mean any Investment,
to the extent it does not constitute (i) a Short Term
Investment, (ii) an Investment in a Subsidiary or an
Eligible Affiliate or a Minority Affiliate, (iii) an
Investment in a Person as a result of which such Person
becomes a Subsidiary or Eligible Affiliate or a Minority
Affiliate, (iv) an Investment made in the ordinary course
of business in a franchisee or licensee, or (v) a
guaranty of certain obligations related to restaurant
building and equipment leases entered into in the
ordinary course of business, provided, however, that
Investments in Minority Affiliates in excess of
$5,000,000 outstanding at any one time shall constitute
Restricted Investments.
"Revolving Credit Commitment" shall mean an amount
equal to $5,000,000 less the Unsecured LC Exposure
Amount, as the same may be reduced from time to time or
terminated pursuant to Section 2.4, 2.11 or 9.1 hereof.
"Revolving Credit Loan" or "Loan" shall mean a loan
or advance made pursuant to Section 2.1 hereof.
"Revolving Credit Loans" or "Loans" shall mean,
collectively, the Revolving Credit Loans from time to
time outstanding and unpaid.
"Secured LC Commitment" shall mean an amount equal
to $2,000,000, as the same may be reduced from time to
time or terminated pursuant to Sections 2.4, 2.11 or 9.1
hereof.
"Secured Letters of Credit" shall mean one or more
Letters of Credit, having an aggregate stated amount not
in excess of the Secured LC Commitment, in respect of
which the Company has pledged Eligible LC Collateral upon
terms satisfactory to Bank One in its discretion.
"Senior Financial Officer" means the chief financial
officer, principal accounting officer, treasurer or
comptroller of the Company.
"Short Term Investment" shall mean an Investment in
(i) direct obligations of the United
States of America, or obligations of any
instrumentality or agency thereof;
(ii) demand deposits in, negotiable
certificates of deposit issued by, or
negotiable bankers' acceptances (eligible for
discount at Federal Reserve Banks) of, or
repurchase agreements in respect of
obligations described in clause (i) with, Bank
One or any bank or trust company organized
under the laws of the United States of America
or any State thereof having capital and
surplus of not less than $250,000,000; and
(iii) readily marketable commercial
paper which, at the time of acquisition, is
rated at least A-1 by Standard & Poor's
Corporation or P-1 by Moody's Investor
Services, Inc.;
provided, that all of such Investments described in
clauses (i), (ii) and (iii) shall be payable in Dollars
and shall mature within twelve months after the date of
acquisition thereof.
"Solvent" shall mean, as to any Person, that such
Person has capital sufficient to carry on its business
and transactions and all business and transactions to
which it is about to engage and is able to pay its debts
as they mature and owns property and other assets having
a value both at fair valuation and at present fair
salable value, greater than the amount required to pay
its debts (including contingencies).
"Subsidiary" means, as to any Person, any
corporation or other business entity a majority of the
combined voting power of all Voting Stock of which is
owned by such Person or one or more of its Subsidiaries
or such Person and one or more of its Subsidiaries.
Unless the context otherwise clearly requires, any
reference to a "Subsidiary" is a reference to a
Subsidiary of the Company.
"Swaps" shall mean, with respect to any Person,
payment obligations with respect to interest rate swaps,
currency swaps and similar obligations obligating such
Person to make payments, whether periodically or upon the
happening of a contingency. For the purpose of the
Agreement, the amount of the obligation under any Swap
shall be the amount determined in respect thereof as of
the end of then most recently ended fiscal quarter of
such Person, based on the assumption that such Swap had
terminated at the end of such fiscal quarter, and in
making such determination, if any agreement relating to
such Swap provides for the netting of amounts payable by
and to such Person thereunder or if any such agreement
provides for the simultaneous payment of amounts by and
to such Person, then in each such case, the amount of
such obligation shall be the net amount so determined.
"Termination Date" shall mean the earlier of (i) the
date on which this Agreement shall terminate in
accordance with the provisions of Section 211 hereof or
(ii) the Business Day, if any, on which the Commitments
of Bank One are terminated in accordance with Section 2.4
or 9.1 hereof.
"Unsecured LC Commitment" shall mean an amount equal
to the lesser of (i) $2,000,000 or (ii) the amount by
which the aggregate principal amount of Revolving Credit
Loans then outstanding is less than the Revolving Credit
Commitment, as the same may be reduced from time to time
or terminated pursuant to Sections 2.4, 2.11 or 9.1
hereof.
"Unsecured LC Exposure Amount" shall mean an amount
equal to (i) the amount available to be drawn under all
outstanding Letters of Credit (other than Secured Letters
of Credit) plus (ii) all amounts drawn under any Letter
of Credit (other than a Secured Letter of Credit) to the
extent such amounts have not been converted into
Revolving Credit Loans.
"Voting Stock" means, with respect to any Person,
any shares of stock or other equity interests of any
class or classes of such Person whose holders are
entitled under ordinary circumstances (irrespective of
whether at the time stock or other equity interests of
any other class or classes shall have or might have
voting power by reason of the happening of any
contingency) to vote for the election of a majority of
the directors, managers, trustees or other governing body
of such Person.
"Wholly-Owned Subsidiary" means, at any time, any
Subsidiary all of the equity interests (except directors'
qualifying shares) and voting interests of which are
owned by any one or more of the Company and the Company's
other Wholly-Owned Subsidiaries at such time.
SECTION 1.2. Other Definitional Provisions. (a) All terms
defined in this Agreement in the singular shall have comparable
meanings when used in the plural, and vice versa.
(b) The words "hereof", "hereby", "herein" and "hereunder"
and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provisions
of this Agreement, the term "hereafter" shall mean after, and the
term "heretofore" shall mean before, the date of this Agreement,
and Article, Section, schedule, exhibit, annex and like references
are to this Agreement unless otherwise specified.
(c) Any defined term which relates to a document shall
include within its definition any amendments, modifications,
renewals, restatements, extensions, supplements, or substitutions
which may have been heretofore or may be hereafter executed in
accordance with the terms thereof and hereof.
(d) References in this Agreement to particular sections of
the Code, ERISA or any other legislation shall be deemed to refer
also to any successor sections thereto or other resignations for
codification purposes.
(e) All terms defined in the Uniform Commercial Code and not
otherwise defined or modified herein shall have the same respective
meanings as are given to such terms therein.
ARTICLE II
AMOUNT AND TERMS OF REVOLVING CREDIT LOANS
AND LETTERS OF CREDIT
-------------------------------------
SECTION 2.1. Commitments and Revolving Credit Loans.
Subject to the terms and conditions of this Agreement, Bank One
agrees to make one or more Revolving Credit Loans to the Company
from time to time during the commitment Period in an aggregate
amount at any one time outstanding not to exceed its Revolving
Credit Commitment. During the Commitment Period, the Company may
borrow, prepay and reborrow the Revolving Credit Loans, all in
accordance with the terms and conditions hereof; provided,
however, that in no event will Bank One be obligated to lend more
than its Revolving Credit Commitment.
SECTION 2.2. Revolving Credit Notes. (a) The Revolving
Credit Loans shall be evidenced by a Revolving Credit Note of the
Company, in substantially the form of Exhibit A hereto, payable to
the order of Bank One and representing the obligation of the
Company to pay the lesser of (i) the Revolving Credit Commitment of
Bank One and (ii) the aggregate principal amount of the Revolving
Credit Loans from time to time outstanding, together with interest
thereon. Bank One is hereby authorized to endorse the date, amount
and Loan type of each Revolving Credit Loan, the Interest Periods
during which such Revolving Credit Loan is a LIBO Rate Loan, and
each payment or prepayment of principal thereof on the schedule
(including additional pages thereto added by Bank One as required)
annexed to and constituting a part of its Revolving Credit Note,
which endorsement shall constitute prima facie evidence of the
accuracy of the information so endorsed; provided, however, that
the failure of Bank One to insert any such date or amount or other
information on such schedule shall not in any manner affect the
obligation of the Company to repay any Revolving Credit Loans in
accordance with the terms of this Agreement.
(b) Each Revolving Credit Note shall (i) be dated the
Effective Date, (ii) be payable on the Termination Date, and (iii)
bear interest, subject to the provisions of Section 10.13 hereof,
until its due date (whether at stated maturity, by acceleration,
declaration or otherwise), on the principal amount thereof from
time to time outstanding at an annual rate elected by the Company
in accordance with the notice provisions set forth in Section 2.3
hereof, equal to the sum of the Applicable Margin plus the Adjusted
LIBO Rate or the Prime Rate. In any case, such rate of interest
shall be computed on the basis of a 360-day year for the actual
number of days elapsed. Bank One agrees to notify the Company of
any change in the Prime Rate within 10 Business Days following the
adoption of such change; provided, however, that any failure of
Bank One to give such notice to the Company shall not in any manner
affect the interest rate otherwise payable pursuant to the
provisions hereof or any obligation or liability of the Company
hereunder or in connection herewith, nor shall Bank One have any
liability whatsoever with respect to, or as a result of, any such
failure to give such notice.
(c) Interest accrued on each Loan shall be payable, without
duplication, on:
(i) the maturity of such Loan;
(ii) with respect to the portion of the outstanding
principal amount of all Revolving Credit Loans maintained as
Prime Rate Loans, the first Business Day of each calendar
quarter, payable quarterly and in arrears, commencing with the
first such date following the date of the making of such
Revolving Credit Loans as, or their conversion into, Prime
Rate Loans; and
(iii) with respect to the portion of the outstanding
principal amount of all Revolving Credit Loans maintained as
LIBO Rate Loans, the last day of each applicable Interest
Period and, in connection with any such Revolving Credit Loan
having a six-month Interest Period, the day that would be the
last day of a three-month Interest Period commencing on the
same day as such six-month Interest Period commences.
(d) The unpaid principal balance of the Revolving Credit
Notes shall bear interest from and including its due date (whether
at stated maturity, by acceleration, declaration or otherwise)
until paid at the rate specified in Section 2.7 hereof.
(e) Bank One may charge any account of the Company maintained
at Bank One for any amounts due to Bank One under the Loan
Documents, including principal of or interest on the Revolving
Credit Notes.
SECTION 2.3. Procedure for Borrowings and Conversions.(a)
Borrowings. Subject to the limitations applicable to Interest
Periods for LIBO Rate Loans, the Company may borrow Revolving
Credit Loans on any Business Day (in the case of LIBO Rate Loans,
on any Banking Day) during the Commitment Period; provider,
however, that the Company shall give Bank One irrevocable written
notice in the form of a Loan Request (which may be sent via
teletransmission) as follows:
(A) in the case of a borrowing of a Revolving Credit
Loan as a Prime Rate Loan, on or before 12:30 p.m.,
prevailing Dallas, Texas time, on the requested borrowing
date (or irrevocable oral notice on or before 12:30 p.m.,
prevailing Dallas, Texas time, on such date confirmed in
a Loan Request (which may be sent via teletransmission)
no later than 3:00 p.m., prevailing Dallas, Texas time on
the borrowing date); and
(B) in the case of a borrowing of a Revolving Credit
Loan as a LIBO Rate Loan, on or before 3:00 p.m.,
prevailing Dallas, Texas time, on the third Banking Day
preceding the first day of the requested Interest Period
(or irrevocable oral notice on or before 3:00 p.m.,
prevailing Dallas Time, on such date confirmed in a Loan
Request (which may be sent via teletransmission) no later
than 5:00 p.m., prevailing Dallas, Texas time, on such
third banking Day preceding the first day of the
requested Interest Period).
If the Company furnishes a Loan Request to Bank One, but no
election is made as to either the Loan type or Interest Period to
be applicable thereto, the Revolving Credit Loan will be made as a
Prime Rate Loan. Each borrowing of a given Loan type shall be in
an aggregate principal amount, together with Revolving Credit Loans
of the same Loan type to be continued as such and Revolving Credit
Loans of other Loan types to be converted to such Loan type on the
same Business Day, of at least $300,000 or any integral multiple of
$100,000 in excess thereof.
(b) Continuations and Conversions. Subject to the
limitations applicable to Interest Periods for LIBO Rate Loans, the
Company may continue any LIBO Rate Loan as such for an additional
Interest Period or convert any Revolving Credit Loan of a given
Loan type into a Revolving Credit Loan of a different Loan type on
any Business Day (in the case of LIBO Rate Loans to be continued or
converted, on any Banking Day) during the Commitment Period;
provided, however, that:
(i) the Company shall give Bank One irrevocable
written notice in the form of a Loan Request in the
manner and by the applicable time specified in Section
2.3(a) hereof for the borrowing of a Revolving Credit
Loan of the Loan type to be converted to or continued
and, if applicable, the Interest Period therefor;
(ii) in the case of the continuation of less than
all of the outstanding Revolving Credit Loans of a given
Loan type on the same Business Day, the aggregate
principal amount of Revolving Credit Loans of such Loan
type to be continued as such, together with any Revolving
Credit Loans to be made as or converted to the same Loan
type on such Business Day, shall not be less than
$300,000 or any integral multiple of $100,000 in excess
thereof;
(iii) in the case of the conversion of less than
all of the outstanding Revolving Credit Loans of a given
Loan type to another Loan type on the same Business Day,
the aggregate principal amount of Revolving Credit Loans
of such Loan type to be converted to another Loan type,
together with any Revolving Credit Loans of such other
Loan type to be made or continued as such on such
Business Day, shall not be less than $300,000 or any
integral multiple of $100,000 in excess thereof;
(iv) LIBO Rate Loans may be converted only at the
end of the then applicable Interest Period;
(v) no LIBO Rate Loan may be continued as such, nor
may any Revolving Credit Loan be converted to a LIBO Rate
Loan, for less than the minimum applicable Interest
Period therefor; and
(vi) no LIBO Rate Loan may be continued as such, nor
may any Revolving Credit Loan be converted to a LIBO Rate
Loan, if any Default or Event of Default shall have
occurred and be continuing as of any date during the
period commencing on the date the Loan Request is
required to be submitted to Bank One and ending on the
first day of the requested Interest Period.
If the company fails, in connection with the expiration of an
Interest Period applicable to a Revolving Credit Loan that is a
LIBO Rate Loan, to furnish a Loan Request to Bank One for the
continuation or conversion thereof or fails to elect a Loan type or
permitted Interest Period therefor, or if the continuation or
conversion of Revolving Credit Loans as LIBO Rate Loans is
prohibited due to the occurrence and continuance of a Default or
Event of Default, such Revolving Credit Loan (unless prepaid in
accordance with the provisions of Section 2.5 hereof or accelerated
in accordance with Section 9.1 hereof) shall be converted
automatically to a Prime Rate Loan as of the expiration of the then
applicable Interest Period.
SECTION 2.4. Termination and Reduction of Commitments. The
Company shall have the option to terminate, and from time to time
to reduce permanently, the Commitments of Bank One, upon
irrevocable written notice to Bank One at least three Business Days
prior to the date of termination or reduction, as the case may be,
specifying such date, whether a termination or reduction is being
requested and, if a reduction is being requested, the amount
thereof. On the date specified in such notice such termination or
reduction shall be effected; provided that
(i) in the case of a termination, such termination
is accompanied by prepayment of the Revolving Credit
Loans in full, the reimbursement of all outstanding
drawings under Letters of Credit, and the cash
collateralization in full of all undrawn amounts under
outstanding Letters of Credit that are not surrendered to
Bank One, together with accrued and unpaid interest
thereon and accrued and unpaid fees in respect of the
Commitments, and
(ii) in the case of any reduction, such reduction is
accompanied by prepayment of the Revolving Credit Loans
and/or the surrender of Letters of Credit to the extent
(if any) that the aggregate principal amount of (A) the
Revolving Credit Loans, plus (B) unreimbursed drawings
under Letters of Credit (other than Secured Letters of
Credit) plus (C) undrawn amounts under outstanding
Letters of Credit (other than Secured Letters of Credit)
exceeds the amount of the Revolving Credit Commitment or
the Unsecured LC Commitment as then reduced or that the
aggregate principal amount of (A) unreimbursed drawings
under Secured Letters of Credit plus (B) undrawn amounts
under outstanding Secured Letters of Credit exceeds the
amount of the secured LC Commitment as then reduced.
Any reduction of the Commitments shall be in an aggregate amount of
$500,000 or integral multiple thereof. Upon any termination of the
Revolving Credit Commitment, the Secured LC Commitment and the
Unsecured LC Commitment shall terminate automatically, provided,
however, that a termination of either or both of the Secured LC
Commitment and the Unsecured LC Commitment shall have no automatic
effect upon the Revolving Credit Commitment or upon any other
Commitment not so expressly terminated. Upon termination of the
Commitments pursuant to this Section 2.4 and upon payment of all
amounts due by the Company to Bank One hereunder or under any Loan
Documents and the prepayment in full, pursuant to Section 2.5
hereof, of all such amounts, the obligations of the parties hereto,
except as otherwise provided herein (including without limitation
as to collateralization of Letters of Credit that remain
outstanding and fees applicable to the maintenance thereof, to
drawings thereunder, or to amendments thereof), shall be deemed
terminated; provided, however, that this Agreement shall continue
to be effective or be reinstated, as the case may be, if any
payment hereunder or in connection herewith is at any time
rescinded or must otherwise be returned as a result of the
bankruptcy, insolvency or reorganization of the Company or
otherwise, all as if such payment had not been made.
SECTION 2.5. Voluntary Prepayments. The Company from time
to time may prepay Loans, in whole or in part, without premium or
penalty, upon irrevocable written notice to Bank One given at least
as early before the proposed date of such prepayment as the
corresponding time specified in Section 2.3(a) hereof for notice of
the borrowing of a Revolving Credit Loan of the Loan type to be
prepaid, specifying the date of prepayment and the amount of the
prepayment; provided, however, that (i) each partial prepayment of
a Revolving Credit Loan shall be in an aggregate amount not less
than $100,000 or any integral multiple of $100,000 in excess
thereof and (ii) the company may not prepay any LIBO Rate Loan
prior to the last day of the Interest Period therefor. If any such
notice is given, the amount specified in such notice shall be due
and payable in the manner and by the time provided in Section 3.3
hereof on the date specified in such notice, together with accrued
interest thereon to such date as provided Section 2.2(c) hereof.
Any such prepayment of a Revolving Credit Loan may be reborrowed,
subject to the terms and conditions of this Agreement, from time to
time.
SECTION 2.6. Mandatory Prepayments. If, at any time, the
aggregate outstanding principal balance of the Revolving Credit
Loans exceeds the Revolving Credit Commitments, the Company shall
make a prepayment of Revolving Credit Loans in the amount of such
excess (rounded upwards to the next higher integral multiple of
$100,000), together with accrued interest thereon to the date of
prepayment as provided in Section 2.2(c) hereof. IN connection
with any such mandatory prepayment, the Company shall prepay Prime
Rate Loans first and LIBO Rate Loans second.
SECTION 2.7. Interest on Delinquent Payments. All unpaid
amounts due under the Revolving Credit Notes or the terms of this
Agreement that are not paid when due (including, to the extent
permitted by law, unpaid interest on the Revolving Credit Notes)
shall bear interest, subject to the provisions of Section 10.13
hereof, from and including its due date until paid in full (whether
before or after the occurrence of any Event of Default described in
Sections 9.1(g) and 9.1(h) hereof) at an annual rate equal to the
sum of (i) 2.50% plus (ii) the Prime Rate. Such rate of interest
shall be computed on the basis of a 360-day year for the actual
number of days elapsed and shall change when and as the Prime Rate
is changed, and any such change in the Prime Rate shall become
effective at the opening of business on the day on which such
change is adopted.
SECTION 2.8. Increased Costs. In the event any applicable
existing or future law, regulation, guideline, treaty or directive
or condition or interpretation thereof (including, without
limitation, any request, guideline or policy, whether or not having
the force of law), by any Governmental Authority charged with the
administration or interpretation thereof, or any change in any of
the foregoing, which:
(i) subjects Bank One or any Participant to any tax
with respect to its Commitments or any Revolving Credit
Loans or Letters of Credit (other than any tax on the
overall net income of Bank One or such Participant no
matter in what jurisdiction) or any participation
therein; or
(ii) changes the basis of taxation of payments to
Bank One or any Participant of principal of and/or
interest on the Revolving Credit Loans or its Commitments
and/or fees and other amounts payable hereunder (other
than any tax on the overall net income of Bank One or
such Participant no matter in what jurisdiction); or
(iii) imposes, modifies or deems applicable or
results in the application of or increases any reserve,
special deposit, or similar requirement against
extensions of credit or any deposits or other liabilities
taken or entered into by Bank One or any Participant
(based upon Bank One's or such Participant's reasonable
allocation of the aggregate of such requirements); or
(iv) imposes upon Bank One or any Participant any
other condition with respect to its Commitments, the
Revolving Credit Loans, the Letters of Credit, this
Agreement or any participation therein;
and the result of any of the foregoing is to increase the actual
cost to Bank One or such Participant of making or maintaining its
Commitments or the Revolving Credit Loans or Letters of Credit
hereunder or any participation therein or to reduce the amount of
any payment (whether of principal, interest, or otherwise) received
or receivable by Bank One or any Participant or to require Bank One
or any Participant to make any payment, in each case by or in an
amount which Bank One or any Participant reasonably deems material,
or
(vi) if Bank One or any participant shall determine
that any applicable law, rule or regulation regarding
capital maintenance, capital ratios or other similar
requirements against its Commitments or any participation
therein (including, without limitation, the issuance of
any final rule or regulation), or any change therein, or
any change in the interpretation or administration
thereof by and Governmental Authority charged with the
interpretation or administration thereof, or compliance
by Bank One or any Participant with any request or
directive or guideline regarding capital maintenance,
capital ratios or other similar requirements against its
Commitments or any participation therein (whether or not
having the force of law) of any such Governmental
Authority, has or would have the effect of reducing the
rate of return on its capital to less than 15% per annum
(after giving effect to all applicable taxes on net
income no matter what the jurisdiction and taking into
consideration its policies with respect to capital
adequacy);
then and in any such case set forth in paragraphs (i) through (v)
above:
(1) Bank One shall promptly notify the Company in
writing of the happening of such event;
(2) Bank One shall promptly deliver to the company
a certificate of Bank One or such Participant stating the
event which has occurred or the reserve or requirements
or other conditions which have been imposed on it or the
request, directive, guideline or requirement with which
it has complied together with the date thereof and the
amount (based upon such its reasonable policies as to the
allocation of capital and costs, as applicable) of such
increased cost, reduction or payment for one or more
periods ending not later than the date of such
certificate; and
(3) the Company shall pay within 10 days after
demand therefor such amount or amounts as will compensate
Bank One or such Participant for such additional cost,
reduction or payment.
The certificate of Bank One or such Participant as to the
additional amounts payable pursuant to this Section 2.8 delivered
to the Company shall, in the absence of manifest error, be
conclusive of the amount thereof. The protection of this Section
2.8 shall be available to Bank One or any Participant regardless of
any possible contention of invalidity or inapplicability of the
law, regulation or condition which has been imposed. In the event
that any such law, regulation or condition is subsequently held to
be invalid or inapplicable and the result thereof is to eradicate
any such additional cost, reduction or payment, Bank One shall
promptly pay to the Company (upon Bank One's receipt from its
Participant in the case of compensation previously paid to such
Participant) an amount equal to the amount of compensation paid by
the Company to Bank One for its account or the account of a
Participant as a result of such invalid or inapplicable law,
regulation or condition.
SECTION 2.9. Use of Proceeds. The proceeds of all Revolving
Credit Loans made by Bank One to the Company hereunder shall be
used for general corporate purposes of the company in the ordinary
course of business.
SECTION 2.10. Payment on Non-Business Days. Whenever any
payment to be made hereunder or under the Notes shall be stated to
be due on a Saturday, Sunday or other day on which Bank One is not
open for business at its offices set forth herein (any other day
being a "Business Day"), such payment may be made on the next
succeeding Business Day, and such extension of time shall in such
case be included in the computation of payment of interest or
commitment fees, as the case may be.
SECTION 2.11. Term of Commitments. Subject to the next
sentence, (a) during the Initial Term, the obligations of Bank One
under this Agreement shall automatically terminate on the last day
of the Initial Term, and (b) during any Renewal Term, the
obligations of Bank One under this Agreement shall automatically
terminate on the last day of such Renewal Term. If, at least three
months prior to the last day of the Initial Term or any Renewal
Term, as the case may be, the Company gives Bank One written notice
requesting that Bank One extend one or more of its Commitments for
a Renewal Term, Bank One, at least one month prior to the last day
of the Initial Term or any Renewal Term, as the case may be, will
respond in writing whether it is willing, in its sole and absolute
discretion, to extend some or all of its Commitments for one
Renewal Term.
Notwithstanding the foregoing, upon the occurrence and during
the continuance of an Event of Default, the provisions of Article
IX hereof shall apply and Bank One may take and action permitted
thereunder. On the date of termination, the Commitments shall
terminate and the unpaid balance of the Revolving Credit Notes and
all interest accrued thereon and any accrued and unpaid fees and
expenses due and payable hereunder or under any other Loan Document
shall become immediately due and payable without notice or demand
and the Company shall be obligated to pledge cash and/or Eligible
LC Collateral in an aggregate face amount (reduced for any
unaccreted discount) at least equal to the Unsecured LC Exposure
Amount. Such termination shall not release, terminate or limit
Bank One's rights or remedies under this Agreement (including, but
not limited to, Bank One's rights in the collateral for the Secured
Letters of Credit, including collateral created or acquired after
such termination) or the Company's obligations under this
Agreement, and such rights and remedies of Bank One and obligations
of the Company shall survive until the Company shall have fully
paid and performed its obligations hereunder.
SECTION 2.12. Funding Losses. (a) the Company shall pay,
within 10 days after demand therefor, such amount as will
compensate Bank One for any loss or reasonable expense it may
sustain as a consequence of:
(i) any default in payment of the principal amount
of any LIBO Rate Loan or any part thereof or interest
accrued thereon, or any other amount due,
(ii) the occurrence of any Default hereunder,
(iii) the receipt or recovery or conversion for any
reason (including without limitation mandatory prepayment
pursuant to Section 2.6 hereof or mandatory conversion
pursuant to Section 2.15 hereof) of all or any part of a
LIBO Rate Loan prior to the last day of the applicable
Interest Period therefor, or
(iv) any failure to borrow, convert to, or continue
any LIBO Rate Loan as such after submitting a Loan
Request (whether oral or written) relating thereto to
Bank One,
including, but not limited to, (A) any loss or expense sustained or
incurred in liquidating or employing deposits from third parties
acquired to effect or maintain a LIBO Rate Loan or any part
thereof or (B) any loss of margin on reemployment of the funds so
received or recovered.
(b) Bank One shall be entitled to fund its Loans in such
manner as it may determine in its sole discretion, including
without limitation the London interbank market; provided, however,
that, for the purposes of calculations under this Section 2.12,
each LIBO Rate Loan shall be deemed to have been funded by the
purchase in the London interbank market for a dollar deposit in an
amount comparable to the principal amount of such LIBO Rate Loan
and having a maturity comparable to the applicable Interest Period
therefor.
(c) A certificate of Bank One as to any additional amounts
payable pursuant to this Section 2.12 setting forth the basis and
method of determining such amounts shall be conclusive, absent
manifest error, as to the determination by Bank One set forth
therein.
SECTION 2.13. Alternate Rate of Interest. In the event, and
on each occasion on which Bank One shall determine, on the day two
Banking Days prior to the commencement of any Interest Period for
a LIBO Rate Loan, that
(i) Dollar deposits in an amount comparable to the
principal amount of such LIBO Rate Loan and having a
scheduled maturity comparable to the Interest Period set
forth in the related Loan Request are not generally
available in the London interbank market,
(ii) the rate at which such Dollar deposits are
being offered will not adequately and fairly reflect the
cost to Bank One of making or maintaining such LIBO Rate
Loan during such Interest Period, or
(iii) reasonable means do not exist for
ascertaining the LIBO Base Rate,
Bank One, as soon as practical thereafter, shall give oral notice
of such determination to the Company, promptly confirmed in writing
(which may be by teletransmission). In the event of any such
determination and until Bank One notifies the Company that the
circumstances giving rise to such notice no longer exist, no
Revolving Credit Loans will be made as LIBO Rate Loans and no
Revolving Credit Loans will be converted to or continued as LIBO
Rate Loans, but shall convert to Prime Rate Loans at the end of the
applicable Interest Period, if any, therefor. Each determination
by Bank One hereunder shall be conclusive absent manifest error.
SECTION 2.14. Change in Legality. (a) If, anything to the
contrary herein contained notwithstanding, any applicable existing
or future law, regulation, guideline, treaty or directive or
condition or interpretation thereof (including, without limitation,
any request,, guideline or policy, whether or not having the force
of law), by any Governmental Authority charged with the
administration or interpretation thereof, or any change in any of
the foregoing shall make it unlawful or improper for Bank One to
make or maintain any Revolving Credit Loans as LIBO Rate Loans,
then, by oral notice to the Company, promptly confirmed in writing
(which may be teletransmission), Bank One may:
(i) declare that Revolving Credit Loans thereafter
will not be made by Bank One as LIBO Rate Loans,
whereupon the Company shall be prohibited from requesting
LIBO Rate Loans unless and until such declaration is
withdrawn; and
(ii) require that all outstanding LIBO Rate Loans be
converted to Prime Rate Loans, in which event all such
Revolving Credit Loans shall be converted automatically
to Prime Rate Loans as of the end of their applicable
Interest Periods or as of such earlier date as may be
required of Bank One for the lawful or proper conduct of
its lending activities.
SECTION 2.15. Letters of Credit. (a) Bank One agrees to
issue Letters of Credit in a form to be agreed to by the Company
and Bank One, issued at any time commencing on the date hereof and
expiring on a date not exceeding one year from its date of
issuance; provided, however, that (i) no Letter of Credit shall
expire later than the Termination Date; (ii) Bank One will not
issue any Letter of Credit to the extent that, after giving effect
to such issuance, the Unsecured LC Exposure would exceed the
Unsecured LC Commitment or the Company would be required to make a
mandatory prepayment of Revolving Credit Loans under Section 2.6
hereof, (iii) Bank One will not issue any Secured Letter of Credit
unless the required Eligible LC Collateral is delivered in pledge,
and (iv) Bank One will not issue any Secured Letter of Credit to
the extent that, after giving effect to such issuance, the amount
available to be drawn under all Secured Letters of Credit would
exceed the Secured LC Commitment.
(b) The Company shall pay, except as otherwise provided in
the last sentence of this Section 2.15(b), to Bank One in
immediately available funds upon notice to the Company the amount
of each payment made by Bank One under a Letter of Credit.
Notwithstanding Section 10.4, such notice may be given by
telephone, but shall be confirmed that same day by a
teletransmission in a writing from Bank One to the Company.
Payment by the Company to Bank One on account of a payment under a
Letter of Credit shall be made in immediately available funds by
3:00 p.m. (Dallas, Texas time) on the day notice thereof is given
if notice is given prior to 12:00 p.m. (Dallas, Texas time) on such
day. If notice is given by Bank One after 12:00 p.m. (New York
City time), payment shall be made by the company by 1:00 p.m.
(Dallas, Texas time) on the next succeeding Business Day. Interest
on any amounts paid by Bank One under a Letter of Credit shall
accrue beginning on the date payment by the Company is due and
payable at the rate specified in Section 2.7 hereof. If (i) such
payment due from the Company is not made on the date such payment
is otherwise due and payable, (ii) the conditions precedent in
Section 5.4 hereof have been satisfied and (iii) the Company shall
give Bank One irrevocable written notice signed by a duly
authorized officer of the Company (which notice may be sent via
teletransmission) on or before 11:00 a.m., Dallas, Texas time, on
a day succeeding the date such payment is otherwise due and
payable, then the amount of such payment due and unpaid plus any
interest accrued thereon shall automatically, and without any
further action on the part of the Company or Bank One, be converted
into and become a Revolving Credit Loan for all purposes of this
Agreement subject to all the terms and conditions of this Agreement
relating to Revolving Credit Loans. Alternatively, if any payment
due from the company in connection with a Secured Letter of Credit
is not made on the date such payment is otherwise due and payable,
the Company hereby expressly authorizes Bank One to liquidate
Eligible LC Collateral pledged therefor in an amount sufficient to
make such payment on the next succeeding Business Day; provided,
however, that Bank One shall have no obligation or duty to exercise
such right.
(c) Each Letter of Credit shall be issued on at least three
Business Days' notice from the Company to Bank One specifying the
date such Letter of Credit will be issued (the "Issuance Date"),
the amount, the expiry date, the name of the proposed beneficiary
of such Letter of Credit (the "Proposed Beneficiary"), and such
other information and documents as reasonably may be required or
requested by Bank One for the issuance of or drawing under such
Letter of Credit. Notwithstanding Section 10.4, such notice may be
given by telephone, but shall be confirmed that same day by
teletransmission in a writing from the Company to Bank One. On the
Issuance Date specified by the Company in such notice and upon
fulfillment of the applicable conditions set forth in Article V,
Bank One will issue the Letter of Credit to the Proposed
Beneficiary in the amount specified in such notice.
ARTICLE III
FEES AND PAYMENTS
--------------------------------------
SECTION 3.1. Facility Fees and Letter of Credit Fees. (a)
The Company shall pay a facility fee to Bank One equal to 0.375%
per annum of the average daily, unused amount of the Revolving
Credit Commitment (for which purpose an outstanding Unsecured
Letter of Credit shall be deemed to be usage of the Revolving
Credit Commitment in the amount available to be drawn thereunder)
for the period from the Effective Date to and including the last
day of the Commitment Period, payable quarterly in arrears on the
first day of each calendar quarter during the Commitment Period,
commencing with the first such date after the Initial Revolving
Credit Loan is made hereunder, and on the Termination Date.
Facility fees shall be calculated on the basis of a 360-day year
for the actual number of days elapsed.
(b) In consideration of the issuance by Bank One of each
Letter of Credit, the Company hereby agrees to pay Bank One, in
addition to the fee described in Section 3.1(a), a fee with respect
to the amount available to be drawn under such Letter of Credit
issued, computed on the basis of a 360-day year for the actual
number of days occurring in the period in which such Letter of
Credit is outstanding, at a rate equal to 1.5% per annum (the
"Annual Fee") on the amount available to be drawn under such Letter
of Credit issued plus Bank One's normal fees, including but not
limited to, fees for issuance, amendments, cancellations, postage
and telex charges where necessary. Such fees are to be paid as
incurred in immediately available funds, except that the annual Fee
shall be paid in immediately available funds quarterly in arrears
on the first day of each calendar quarter and on the date of
expiration or earlier termination of such Letter of Credit.
SECTION 3.2. Payments. Each payment (including each
prepayment) by the Company pursuant to this Agreement or the
Revolving Credit Notes, whether in respect of principal, interest,
fees, or increased costs, shall be made by the company to Bank One
for the accounts of the parties entitled thereto. All such
payments required to be made to Bank One shall be made, without
set-off, withholding, deduction, or counterclaim, not later than
12:00 noon, Dallas, Texas time, on the date due, in same day or
immediately available funds, to such account as Bank One shall
specify from time to time by notice to the Company. Funds received
after that time shall be deemed to have been received by Bank One
on the next following Business Day.
SECTION 3.3. Taxes. (a) Any and all payments by the Company
pursuant to this Agreement or the Revolving Credit Notes shall be
made, in accordance with the terms hereof and thereof, 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 taxes described in
the parenthetical contained in Section 2.8(i) hereof and franchise
taxes imposed on Bank One or any Participant by the jurisdiction
under the laws of which Bank One or such Participant is organized
or any political subdivision thereof (all such non-excluded taxes,
levies, imposts, deductions, charges, withholdings and liabilities
being hereinafter referred to as "Taxes"). If the Company shall be
required by law to deduct any Taxes from or in respect of any sum
payable hereunder to Bank One, (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 3.3) Bank One shall receive an amount
equal to the sum it would have received had no such deductions been
made, (ii) the Company shall make such deductions, (iii) the
Company shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law, and
(iv) the Company shall deliver to Bank One evidence of such payment
to the relevant Governmental Authority.
(b) In addition, the Company agrees to pay any present or
future stamp or documentary taxes or any other excise or property
taxes, charges or similar levies of the United States or any State
or political subdivision thereof or any applicable foreign
jurisdiction that arise from any payment made hereunder or from the
execution, delivery or registration of, or otherwise with respect
to, this Agreement or any other Loan Document (hereinafter referred
to as "Other Taxes") and to deliver to Bank One evidence of such
payment to the relevant Governmental Authority.
(c) The Company will indemnify Bank One for the full amount
of taxes and Other Taxes (including without limitation Taxes and
Other Taxes imposed by any jurisdiction on amounts payable under
this section 3.3) paid by Bank One (as the case may be) and any
liability (including penalties, interest and expenses) arising
therefrom or with respect thereto, whether or not such Taxes or
Other Taxes were correctly or legally asserted. This
indemnification shall be made within 10 days after written demand
therefor by Bank One.
(d) Without prejudice to the survival of any other agreement
of the Company hereunder, the agreements and obligations of the
Company contained in this Section 3.3 shall survive the payment in
full of principal, interest, fees and other amounts hereunder and
under the other Loan Documents.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
-----------------------------------------------
In order to induce Bank One to enter into this Agreement, to
make the Revolving Credit Loans and to issue the Letters of Credit
herein provided for, the Company, as to itself and its
Subsidiaries, if any, hereby makes the following representations
and warranties, which shall survive the execution and delivery of
the Loan Documents and (except to the extent that any of such
representations and warranties expressly relate to earlier dates)
shall be deemed repeated and confirmed as of each date on which (i)
any Revolving Credit Loans are requested by the Company or made by
Bank One or (ii) any Letters of Credit are requested by the Company
or issued by Bank One:
SECTION 4.1. Organization: Power and Authority. The
Company is a corporation duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation,
and is duly qualified as a foreign corporation and is in good
standing in each jurisdiction in which such qualification is
required by law, other than those jurisdictions as to which the
failure to be so qualified or in good standing could not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. The Company has the corporate power and
authority to own or hold under lease the properties it purports to
own or hold under lease, to transact the business it transacts and
proposes to transact, to execute and deliver this Agreement and the
other Loan Documents and to perform the provisions hereof and
thereof.
SECTION 4.2. Authorization, Etc. This Agreement and
the other Loan Documents have been duly authorized by all necessary
corporate action on the part of the Company, and each of this
Agreement and the other Loan Documents constitutes a legal, valid
and binding obligation of the Company, enforceable against the
Company in accordance with its terms, except as such enforceability
may be limited by (a) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and (b) general
principles of equity (regardless or whether such enforceability is
considered in a proceeding in equity or at law).
SECTION 4.3. Disclosure. The Company, through its
agent, CS First Boston, has delivered to Bank One a copy of a
private Placement Memorandum, dated March 1995 (the "Memorandum").
The Memorandum fairly describes, in all material respects, the
general nature of the business and principal properties of the
Company and its Subsidiaries. This Agreement, the Memorandum, the
documents, certificates or other writings delivered to Bank One by
or on behalf of the Company in connection with the transactions
contemplated hereby and described in Schedule 4.3 (together with
the Memorandum, the "Disclosure Documents"), and the financial
statements listed in Schedule 4.5, taken as a whole, do not contain
any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein not
misleading in light of the circumstances under which they were
made. Since December 31, 1994, there has been no change in the
financial condition, operations, business, properties or prospects
of the Company or any Subsidiary except as disclosed in the
Disclosure Documents or in the financial statements listed in
Schedule 4.5 and other changes that individually or in the
aggregate could not reasonably be expected to have a Material
Adverse Effect. There is no fact known to the Company that could
reasonably be expected to have a Material Adverse Effect that has
not been set forth herein or in the Disclosure Documents.
SECTION 4.4. Organization and Ownership of Shares of
Subsidiaries: Affiliates. (a) Schedule 4.4 contains (except as
noted therein) complete and correct lists of the Company's (i)
Subsidiaries, showing, as to each Subsidiary, the correct name
thereof, the jurisdiction of its organization, and the percentage
of shares of each class of its capital stock or similar equity
interests outstanding owned by the Company and each other
Subsidiary, (ii) Affiliates, other than Subsidiaries, and (iii)
directors and senior officers.
(b) All of the outstanding shares of capital stock or similar
equity interests of each Subsidiary shown in Schedule 4.4 as being
owned by the Company and its Subsidiaries have been validly issued,
are fully paid and nonassessable and are owned by the Company or
another Subsidiary free and clear of any Lien (except as otherwise
disclosed in Schedule 4.4).
(c) Each Subsidiary identified in Schedule 4.4 is a
corporation duly organized, validly existing and in good standing
under the laws of its jurisdiction of organization, and is duly
qualified as a foreign corporation or other legal entity and is in
good standing in each jurisdiction in which such qualification is
required by law, other than those jurisdictions as to which the
failure to be so qualified or in good standing could not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. Each such Subsidiary has the corporate or
other power and authority to own or hold under lease the properties
it purports to own or hold under lease and to transact the business
it transacts and proposes to transact.
(d) No Subsidiary is a party to, or otherwise subject to any
legal restriction or any agreement (other than this Agreement, the
agreements listed in Schedule 4.4 and customary limitations imposed
by corporate law statues) restricting the ability of such
Subsidiary to pay dividends out of profits or make any other
similar distributions of profits to the Company or any of its
Subsidiaries that owns outstanding shares of capital stock or
similar equity interests of such Subsidiary.
SECTION 4.5. Financial Statements. The Company has
delivered to Bank One copies of the financial statements of the
Company and its Subsidiaries listed in Schedule 4.5. All of said
financial statements (including in each case the related schedules
and notes) fairly present in all material respects the consolidated
financial position of the Company and its Subsidiaries as of the
respective dates specified in such Schedule and the consolidated
results of their operations and cash flows for the respective
periods so specified and have been prepared in accordance with GAAP
consistently applied throughout the periods involved except as set
forth in the notes thereto (subject, in the case of any interim
financial statements, to normal year-end adjustments).
SECTION 4.6. Compliance with Laws, Other Instruments, Etc.
The execution, delivery and performance by the Company of this
Agreement and the other Loan Documents will not (i) contravene,
result in any breach of, or constitute a default under, or result
in the creation of any Lien in respect of any property of the
Company or any Subsidiary under, any indenture, mortgage, deed of
trust, loan, purchase or credit agreement, lease, corporate charter
or by-laws, or any other agreement or instrument to which the
Company or any Subsidiary is bound or by which the Company or any
Subsidiary or any of their respective properties may be bound or
affected, (ii) conflict with or result in a breach of any of the
terms, conditions or provisions of any order, judgment, decree, or
ruling of any court, arbitrator or Governmental Authority
applicable to the Company or any Subsidiary or (iii) violate any
provision of any statute or other rule or regulation of any
Governmental Authority applicable to the Company or any Subsidiary.
SECTION 4.7. Governmental Authorizations, Etc. No consent,
approval or authorization of, or registration, filing or
declaration with, any Governmental Authority is required for the
validity of the execution, delivery or performance by the Company
of this Agreement or the other Loan Documents.
SECTION 4.8. Litigation; Observance of Agreements, Statutes
and Orders. (a) Except as disclosed in Schedule 4.8, there are no
actions, suits or proceedings pending or, to the knowledge of the
Company, threatened against or affecting the Company or any
Subsidiary or any property of the Company or any Subsidiary in any
court or before any arbitrator of any kind or before or by any
Governmental Authority that, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect.
(b) Neither the Company nor any Subsidiary is in default
under any term of any agreement or instrument to which it is a
party or by which it is bound, or any order, judgment, decree or
ruling of any court, arbitrator or Governmental Authority or is in
violation of any applicable law, ordinance, rule or regulation
(including without limitation Environmental Laws) or any
Governmental Authority, which default or violation, individually or
in the aggregate, could reasonably be expected to have a Material
Adverse Effect.
SECTION 4.9. Taxes. The Company and its Subsidiaries have
filed all tax returns that are required to have been filed in any
jurisdiction, and have paid all taxes shown to be due and payable
on such returns and all other taxes and assessments levied upon
them or their properties, assets, income or franchises, to the
extent such taxes and assessments have become due and payable and
before they have become delinquent, except for any taxes and
assessments (a) currently payable without penalty or interest, (b)
the amount of which is not individually or in the aggregate
Material or (c) the amount, applicability or validity of which is
currently being contested in good faith by appropriate proceedings
and with respect to which the Company or a Subsidiary, as the case
may be, has established adequate reserves in accordance with GAAP.
The Company knows of no basis for any other tax or assessment that
individually or in the aggregate might be Material. The charges,
accruals and reserves on the books of the Company and its
Subsidiaries in respect of Federal, state or other taxes for all
fiscal periods are adequate. As of the date hereof, the Federal
income tax liabilities of the Company and its Subsidiaries have
been determined by the Internal Revenue Service and paid for all
fiscal years up to and including the fiscal year ended December 31,
1993.
SECTION 4.10. Title to Property: Leases. The Company and its
Subsidiaries have good and marketable title to their respective
real properties and good and sufficient title to their respective
other properties that individually or in the aggregate are
Material, including all such properties reflected in the most
recent audited balance sheet listed on Schedule 4.5 or purported to
have been acquired by the Company or any Subsidiary after said date
(except as sold or otherwise disposed or in the ordinary course of
business), in each case free and clear of Liens prohibited by this
Agreement. All leases that individually or in the aggregate are
Material are valid and subsisting and are in full force and effect
in all material respects.
SECTION 4.11. Licenses, Permits, Etc. Except as disclosed in
Schedule 4.11,
(a) the Company and its Subsidiaries own or possess all
licenses, permits, franchises, authorizations, patents, copyrights,
service marks, trademarks and trade names, or rights thereto, that
individually or in the aggregate are Material, without known
conflict with the rights of others;
(b) to the best knowledge of the Company, no product of the
Company infringes in any material respect any license, permit,
franchise, authorization, patent, copyright, service mark,
trademark, trade name or other right owned by any other Person; and
(c) to the best knowledge of the Company, there is no Material
violation by any Person of any right of the Company or any of its
Subsidiaries with respect to any patent, copyright, service mark,
trademark, trade name or other right owned or used by the Company
or any of its Subsidiaries.
SECTION 4.12. Compliance with ERISA. (a) The Company and each
ERISA Affiliate have operated and administered each Plan in
compliance with all applicable laws except for such instances of
noncompliance as have not resulted in and could not reasonably be
expected to result in a Material Adverse Effect. Neither the
Company nor any ERISA Affiliate has incurred any liability pursuant
to Title I or IV of ERISA or the penalty or excise tax provisions
of the Code relating to employee benefit plans (as defined in
Section 3 of ERISA), and no event, transaction or condition has
occurred or exists that could reasonably be expected to result in
the incurrence of any such liability by the Company or any ERISA
Affiliate, or in the imposition of any Lien on any of the rights,
properties or assets of the Company or any ERISA Affiliate, in
either case pursuant to Title I or IV of ERISA or to such penalty
or excise tax provisions or to Section 401(a)(29) or 412 of the
Code, other than such liabilities or Liens as would not be
individually or in the aggregate Material.
(b) The present value of the aggregate benefit liabilities
under each of the Plans (other than Multiemployer Plans),
determined as of the end of such Plan's most recently ended plan
year on the basis of the actuarial assumptions specified for
funding purposes in such Plan's most recent actuarial valuation
report, did not exceed the aggregate current value of the assets of
such Plan allocable to such benefit liabilities. The term "benefit
liabilities" has the meaning specified in section 4001 of ERISA and
the terms "current value" and "present value" have the meaning
specified in section 3 of ERISA.
(c) The Company and its ERISA Affiliates have not incurred
withdrawal liabilities (and are not subject to contingent
withdrawal liabilities) under section 4201 or 4204 of ERISA in
respect of Multi-employer Plans that individually or in the
aggregate are Material.
(d) The expected postretirement benefit obligation (determined
as of the last day of the Company's most recently ended fiscal year
in accordance with Financial Accounting Standards Board Statement
No. 106, without regard to liabilities attributable to continuation
coverage mandated by section 4980B of the Code) of the Company and
its Subsidiaries is not Material.
SECTION 4.13. Margin Regulations. Except for treasury stock
of the Company, neither the Company nor any Subsidiary thereof owns
any "margin stock" as such term is defined in Regulation U, as
amended (12 C.F.R. Part 221), issued by the Board or is obligated
to register with the Board as a "lender" as such term is defined in
Regulation G, as amended (12 C.F.R. Part 207), issued by the Board.
The proceeds of the borrowings made pursuant to this Agreement will
be used by the Company only for the purposes set forth in Section
2.9 hereof. None of such proceeds and none of the proceeds of any
loan or advance made by the Company or any Subsidiary thereof will
be used, directly or indirectly, for the purpose of purchasing or
carrying any margin stock or for the purposes of maintaining,
reducing or retiring any Indebtedness that originally was incurred
to purchase or carry margin stock or for any other purpose that
might constitute any of the Revolving Credit Loans under this
Agreement or any such loans or advances a "purpose credit" within
the meaning of said Regulations G and U or Regulation X (12 C.F.R.
Part 224) of the Board. Neither the Company nor any Subsidiary
thereof nor any Bank One acting in its or on their behalf has taken
or will take any action that might cause this Agreement or any of
the documents or instruments delivered pursuant hereto or other
Loan Documents to violate any regulation of the Board or to violate
the Securities Exchange Act of 1934, as amended.
SECTION 4.14. Investment Company. Neither the Company nor
any Subsidiary thereof 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. The acquisition of the
Revolving Credit Notes by Bank One, the application of the proceeds
and repayment thereof by the company and the performance of the
transactions contemplated by this Agreement and the other Loan
Documents will not violate any provision of said Act, or any rule,
regulation or order issued by the Securities and Exchange
Commission thereunder.
SECTION 4.15. Existing Indebtedness; Future Liens. (a)
Schedule 4.15 sets forth a complete and correct list of all
outstanding Indebtedness of the Company and its Subsidiaries as of
March 3, 1995, since which date there has been no Material change
in the amounts, interest rates, sinking funds, installment payments
or maturities of the Indebtedness of the Company or its
Subsidiaries (except as disclosed in Schedule 4.15). Neither the
Company nor any Subsidiary is in default, and no waiver of default
is currently in effect, in the payment of any principal or interest
on any Indebtedness of the Company or such Subsidiary and no event
or condition exists with respect to any Indebtedness of the Company
or any Subsidiary that would permit (or that with notice or the
lapse of time, or both, would permit) one or more Persons to cause
such Indebtedness to become due and payable before its stated
maturity or before its regularly scheduled dates of payment.
(b) Except as disclosed in Schedule 4.15, neither the Company
nor any Subsidiary has agreed or consented to cause or permit in
the future (upon the happening of a contingency or otherwise) any
of its property, whether now owned or hereafter acquired, to be
subject to a Lien not permitted by Section 8.1
SECTION 4.16. Environmental Matters. Neither the Company nor
any Subsidiary has knowledge of any claim or has received any
notice of any claim, and no proceeding has been instituted raising
any claim against the Company or any of its Subsidiaries or any of
their respective real properties now or formerly owned, leased or
operated by any of them or other assets, alleging any damage to the
environment or violation of any Environmental Laws, except, in each
case, such as could not reasonably be expected to result in a
Material Adverse Effect. Except as otherwise disclosed to Bank One
in writing prior to the execution and delivery of this Agreement,
(a) neither the Company nor any Subsidiary has knowledge
of any facts which would give rise to any claim, public or private,
of violation of Environmental Laws or damage to the environment
emanating from, occurring on or in any way related to real
properties now or formerly owned, leased or operated by any of them
or to other assets or their use, except, in each case, such as
could not reasonably be expected to result in a Material Adverse
Effect;
(b) neither the Company nor any of its Subsidiaries has
stored any Hazardous Materials on real properties now or formerly
owned, leased or operated by any of them and has not disposed of
any Hazardous Materials in a matter contrary to any Environmental
laws in each case in any manner that could reasonably be expected
to result in a Material Adverse Effect; and
(c) all buildings on all real properties now owned,
leased or operated by the Company or any of its Subsidiaries are in
compliance with applicable Environmental Laws, except where failure
to comply could not reasonably be expected to result in a Material
Adverse Effect.
SECTION 4.17. Event of Default. No event has occurred and is
continuing that constitutes a Default or an Event of Default or
would constitute such a Default or Event of Default after notice or
lapse of time or both.
SECTION 4.18. Solvency. The Company is Solvent, and will
not, as a result of the transactions contemplated hereby, by the
Loan Documents (i) become not Solvent, (ii) be left with
unreasonably small capital, or (iii) have liabilities (including
contingencies) in excess of the fair salable value of its assets.
SECTION 4.19. First Priority. When the Secured Letters of
Credit are issued, the pledge of Eligible LC Collateral therefor
will create valid and perfected first priority security interests
in and to all such Eligible LC Collateral enforceable against the
Company, its Subsidiaries, if any, and all third parties in all
relevant jurisdictions and securing the reimbursement of amounts
drawn under the Secured Letters of Credit.
ARTICLE V
CONDITIONS PRECEDENT
----------------------------------------
SECTION 5.1. Conditions to Initial Revolving Credit Loan.
The obligation of Bank One to make the Initial Revolving Credit
Loan hereunder is subject to the satisfaction on the Effective Date
of the following conditions precedent:
(a) Bank One shall have received, on or before
making the Initial Revolving Credit Loan, the following,
each in form and substance satisfactory to Bank One in
all respects:
(i) an original of this Agreement and a
Revolving Credit Note conforming to the
requirements hereof in the form of Exhibit A
hereto, both executed by a Responsible Officer
of the Company, duly authorized thereunto;
(ii) opinions of counsel to the Company
substantially in the form of Exhibit C hereto;
such opinion shall also cover such other
matters incident to the transactions
contemplated by this Agreement and the other
Loan Documents as Bank One reasonably may
require;
(iii) a copy of the Certificate of
Incorporation of the Company and all
amendments thereto, certified as of a recent
date by the Secretary of State of Kansas, and
certified by the Secretary or an Assistant
Secretary of the Company to the effect that
such Certificate of Incorporation has not been
amended since such date;
(iv) copies of the By-Laws of the Company
in effect as of the Effective Date, certified
by a Secretary or Assistant Secretary of the
Company;
(v) certified copies of the resolutions
of the Board of Directors of the Company
approving each of the Loan Documents to which
it is a party and each of the other
instruments and documents to be executed by it
and delivered to Bank One pursuant to this
Agreement or any Loan Document, certified by a
Secretary or an Assistant Secretary of the
Company, as the case may be, and certified
copies of all documents evidencing other
necessary corporate action and governmental
approvals, if any, with respect thereto;
(vi) certificates of the Secretary or an
Assistant Secretary of the Company certifying
the names and true signatures of the officers
of the Company authorized to sign each
document to which it is a signatory and which
is to be delivered by it hereunder or pursuant
to any other Loan Document to which it is a
party;
(vii) an Officers' Certificate to the
effect that (A) the financial statements
referred to in Schedule 4.5 hereto present
fairly in all material respects the
consolidated financial position of the Company
and its Subsidiaries as of the respective
dates specified in such Schedule and the
consolidated results of their operations and
cash flows for the respective periods so
specified and (B) no material adverse change
in the pro forma condition, financial or
otherwise, of the Company has occurred since
the date of such financial statements;
(viii) copies of all other documents,
instruments and agreements requested by Bank
One in connection with the transactions
contemplated by this Agreement.
(b) The Company is a corporation duly organized and
validly existing, has all licenses, permits and
authorizations necessary to own its properties and to
carry on its business as now conducted and proposed to be
conducted and is in good standing in the jurisdiction of
its organization and in each other jurisdiction in which
the nature of its business or ownership or use of its
property requires such qualification, except where the
failure to qualify could not reasonably be expected to
have Material Adverse Effect, and Bank One shall receive
such evidence thereof, as Bank One may request.
(c) All requisite corporate action and proceedings,
as the case may be, in connection with the Loan Documents
shall be satisfactory in form and substance to Bank One,
and Bank One shall have received all information and
copies of all documents, including, without limitation,
records of requisite corporate action and proceedings
which Bank One and its counsel may have requested in
connection therewith, such documents, where so requested,
to be certified by appropriate corporate officers or
Governmental Authorities.
(d) The Company shall have paid all reasonable fees,
costs and expenses incurred or sustained by Bank One
(including all attorneys' fees and disbursements) in
connection with the preparation, execution and delivery
of this Agreement, the other Loan Documents and any
related documents.
(e) All necessary approvals, authorizations and
consents, if any be required, of any Governmental
Authority having jurisdiction with respect to the
transactions contemplated by this Agreement shall have
been obtained. In addition, the Company and its
Subsidiaries shall be in compliance with all Material
laws, rules, regulations, orders and administrative
guidelines applicable to the operation of their business.
SECTION 5.2. Conditions to All Revolving Credit Loans. The
obligation of Bank One to make any Revolving Credit Loans
(including the Initial Revolving Credit Loan) is further subject to
the satisfaction of the following conditions precedent:
(a) Each of the representations and warranties made
by the Company in or pursuant to any Loan Document or
which are contained in any agreement, instrument,
certificate, document or other writing furnished at any
time under or in connection herewith or therewith shall
be true and correct in all Material respects when made
and on and as of the date of the making of such Revolving
Credit Loan (except to the extent any representation or
warranty expressly relates to an earlier date);
(b) No Default or Event of Default shall have
occurred and be continuing on such date or after giving
effect to the Revolving Credit Loans to be made on such
date; and
(c) No event, act or condition having or causing a
Material Adverse Effect with respect to the Company has
occurred since the Effective Date.
Each borrowing by the Company hereunder shall constitute a
representation and warranty by the Company as of the date of such
borrowing that the conditions in clauses (a), (b) and (c) of this
Section 5.2 have been satisfied.
SECTION 5.3. Conditions Precedent to Issuance of Letters of
Credit. The obligation of Bank One to issue a Letter of Credit is
subject in the case of each such issuance to the conditions
precedent applicable to the Revolving Credit Loans required by
Sections 5.1 and 5.2 and, in addition, to the further conditions
that Bank One shall have received:
(a) on or before the date of such issuance, a
completed application to open a stand-by letter of credit
substantially in the form and substance of Exhibit D
("Letter of Credit Application"), together with the
proposed text of the Letter of Credit in a form
reasonably satisfactory to Bank One; and
(b) if the Letter of Credit requested by the
Company is a Secured Letter of Credit, shall have
received in pledge the Eligible LC Collateral required by
the provisions hereof.
SECTION 5.4. Conditions Precedent to Conversion of Letter of
Credit Reimbursements. The conversion, pursuant to Section 2.15(b)
hereof, of any amount due and unpaid plus any accrued interest
thereon in respect of any Letter of Credit is subject in the case
of each such conversion to the conditions precedent applicable to
Revolving Credit Loans required by Section 5.2. Any such
conversion shall constitute a representation and warranty by the
Company that the conditions shall constitute a representation and
warranty by the Company that the conditions in Section 5.2 hereof
have been satisfied.
ARTICLE VI
AFFIRMATIVE COVENANTS
---------------------------------------
The Company covenants and agrees that, until the Revolving
Credit Notes together with interest and all other Indebtedness of
the Company to Bank One under the Loan Documents are paid in full
and the Commitments are terminated, unless specifically waived in
writing by Bank One:
SECTION 6.1. Financial Statements and Other Information.
The Company shall furnish to Bank One:
(a) Quarterly Statements -- within one Business Day
after the day that is 45 days after the end of each
quarterly fiscal period in each fiscal year of the
Company (other than the last quarterly fiscal period of
each such fiscal year), duplicate copies of,
(i) consolidated and consolidating
balance sheets of the Company and its
Subsidiaries as at the end of such quarter,
(ii) consolidated and consolidating
statements of income, changes in shareholders'
equity and cash flows of the Company and its
Subsidiaries, for such quarter and (in each
case of the second and third quarters) for the
portion of the fiscal year ending with such
quarter,
setting forth in each case in comparative form the
figures for the corresponding periods in the previous
fiscal year, all in reasonable detail, prepared in
accordance with GAAP applicable to quarterly financial
statements generally, and certified by a Senior Financial
Officer as fairly presenting, in all material respects,
the financial positions of the companies being reported
on and their results of operations and cash flows,
subject to changes resulting from year-end adjustments;
provided, that delivery within the time period specified
above of copies of the Company's Quarterly Report on Form
10-Q prepared in compliance with the requirements
therefor and filed with the Securities and Exchange
Commission shall be deemed to satisfy the requirements of
this Section 6.1(a);
(b) Annual Statements -- within one Business Day
after the day that is 90 days after the end of each
fiscal year of the Company, duplicate copies of,
(i) consolidated and consolidating
balance sheets of the Company and its
Subsidiaries as at the end of such year, and
(ii) consolidated and consolidating
statements of income, changes in shareholders'
equity and cash flows of the Company and its
Subsidiaries for such year,
setting forth in each case in comparative form the
figures for the previous fiscal year, all in reasonable
detail, prepared in accordance with GAAP, and accompanied
by
(A) by an opinion thereon of independent
public accountants of recognized national
standing, which opinion shall state that such
financial statements present fairly, in all
material respects, the financial position of
the companies being reported upon and their
results of operations and cash flows and have
been prepared in conformity with GAAP, and
that the examination of such accountants in
connection with such financial statements has
been made in accordance with generally
accepted auditing standards, and that such
audit provides a reasonable basis for such
opinion in the circumstances, and
(B) a certificate of such accountants
stating that they have reviewed Sections 7.1,
7.2, 7.3, 8.2 and 8.4 of this Agreement and
stating further whether, in making their
audit, they have become aware of any condition
or event that then constitutes a Default or an
Event of Default under said Sections, and, if
they are aware that any such condition or
event then exists, specifying the nature and
period of the existence thereof (it being
understood that such accountants shall not be
liable, directly or indirectly, for any
failure to obtain knowledge of any Defaults or
Event of Default unless such accountants
should have obtained knowledge thereof in
making an audit in accordance with generally
accepted auditing standards or did not make
such an audit),
provided, that the delivery within the time period
specified above of the Company's Annual Report of Form
10-K for such fiscal year (together with the Company's
annual report to shareholders, if any, prepare pursuant
to Rule 14a-3 under the Exchange Act) prepared in
accordance with the requirements therefor and filed with
the Securities and Exchange Commission, together with the
accountant's certificate described in clause (B) above,
shall be deemed to satisfy the requirements of this
Section 6.1(b);
(c) SEC and Other Reports -- promptly upon their
becoming available, one copy of (i) each financial
statement, report, notice or proxy statement sent by the
Company or any Subsidiary generally to its shareholders
or to it creditors (other than the Company or another
Subsidiary), and (ii) each regular or periodic report,
each registration statement (without exhibits except as
expressly requested by such holder), and each prospectus
and all amendments thereto filed by the Company or any
Subsidiary with the Securities and Exchange Commission
and of each press release and other statements made
available generally by the Company or any Subsidiary to
the public concerning developments that are Material;
(d) Notice of Default or Event of Default --
promptly, and in any event within five days after a
Responsible Officer becoming aware of the existence of
any Default or Event of Default or that any Person has
given any notice or taken any action with respect to a
claimed default hereunder or that any Person has given
any notice or taken any action with respect to a claimed
default of the type referred to in Section 9.1(e), a
written notice specifying the nature and period of
existence thereof and what action the Company is taking
or proposes to take with respect thereto;
(e) ERISA Matters -- promptly, and in any event
within five days after a Responsible Officer becoming
aware of any of the following, a written notice setting
forth the nature thereof and the action, if any, that the
Company or an ERISA Affiliate proposes to take with
respect thereto:
(i) with respect to any Plan, any
reportable event, as defined in section
4043(b) of ERISA and the regulations
thereunder, for which notice thereof has not
been waived pursuant to such regulations as in
effect on the date hereof; or
(ii) the taking by the PBGC of steps to
institute, or the threatening by the PBGC of
the institution of, proceedings under section
4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any
Plan, or the receipt by the Company or any
ERISA Affiliate of a notice from a
Multiemployer Plan that such action has been
taken by the PBGC with respect to such
Multiemployer Plan; or
(iii) any event, transaction or
condition that could result in the incurrence
of any liability by the Company or any ERISA
Affiliate pursuant to Title I or IV of ERISA
or the penalty or excise tax provisions of the
Code relating to employee benefit plans, or in
the imposition of any Lien on any of the
rights, properties or assets of the Company or
any ERISA Affiliate pursuant to Title I or IV
of ERISA or such penalty or excise tax
provisions, if such liability or Lien, taken
together with any other such liabilities or
Liens then existing, could reasonably be
expected to have a Material Adverse Effect;
(f) Accounts Reports -- promptly, and in any event
within 30 days of receipt thereof by a Responsible
Officer of the Company, copies of any report as to
material inadequacies in accounting controls submitted by
independent accountants in connection with any audit of
the Company or any Subsidiary;
(g) Material Litigation -- promptly, and in any
event within 30 days after a Responsible Office of the
Company becomes aware of any litigation, arbitration or
administrative proceedings affecting the Company or any
of its Subsidiaries and which, if adversely determined,
could be reasonably expected to have a Material Adverse
Effect, a written statement of a Responsible Officer
describing the nature and status of such matters and what
action the Company or a Subsidiary has taken, is taking
or proposes to take with respect thereto;
(h) Notices from Governmental Authority --
promptly, and in any event within 30 days of receipt
thereof, copies of any notice to the Company or any
Subsidiary from any Federal or state Governmental
Authority relating to any order, ruling, statute, or
other law or regulation that could reasonably be expected
to have a Material Adverse Effect; and
(i) Requested Information -- with reasonable
promptness, such other data and information relating to
the business, operations, affairs, financial condition,
assets or properties of the Company or any of its
Subsidiaries or relating to the ability of the Company to
perform its obligations hereunder and under the other
Loan Documents as from time to time may be reasonably
requested by Bank One.
SECTION 6.2. Additional Quarterly Reports and Certificate. The
financial statements required to be furnished under Section 6.1(a)
and (b) hereof, shall be accompanied by:
(a) Compliance Certificate -- the information
(including detailed calculations) required in order to
establish whether the Company was in compliance with the
requirements of Sections 7.1, 7.2 and 7.3 during the
quarterly or annual period covered by the statements then
being furnished (including with respect to each such
Section, where applicable, the calculations of the
maximum or minimum amount, ratio or percentage, as the
case may be, permissible under the terms of such
Sections, and the calculation of the amount, ratio or
percentage then in existence); and
(b) Default -- a statement that such Senior
Financial Officer has reviewed the relevant terms hereof
and has made, or caused to be made, under his or her
supervision, a review of the transactions and conditions
of the Company and its Subsidiaries from the beginning of
the quarterly or annual period covered by the statements
then being furnished to the date of the certificate and
that such review shall not have disclosed the existence
during such period of any condition or event that
constitutes a Default or an Event of Default or, if any
such condition or event existed or exists (including,
without limitation, any such event or condition resulting
from the failure of the Company or any Subsidiary to
comply with any Environmental Law), specifying the nature
and period of existence thereof and what action the
Company shall have taken or proposes to take with respect
thereto.
SECTION 6.3. Inspection by Bank One. The Company shall
permit the representatives of Bank One:
No Default -- if no Default or Event of Default then
exists, at the expense of such holder and upon reasonable
prior notice to the Company, to visit the principal
executive office of the Company, to discuss the affairs,
finances and accounts of the Company and its Subsidiaries
with the Company's officers, and (with the consent of the
Company, which consent will not be unreasonably withheld)
its independent public accountants, and (with the consent
of the Company, which consent will not be unreasonably
withheld) to visit the other offices and properties of
the Company and each Subsidiary, all at such reasonable
times and as often as may be reasonably requested in
writing; and
Default -- if a Default or Event of Default then
exists, at the expense of the Company, to visit and
inspect any of the offices or properties of the Company
or any Subsidiary, to examine all their respective books
of account, records, reports and other papers, to make
copies and extracts therefrom, and to discuss their
respective affairs, finances and accounts with their
respective officers, employees, and independent public
accountants (and by this provision the Company authorizes
said accountants to discuss the affairs, finances and
accounts of the Company and its Subsidiaries), all at
such times and as often as may be requested.
SECTION 6.4. Compliance With Laws. The Company will and
will cause each of its Subsidiaries to comply with all laws,
ordinances or governmental rules or regulations to which each of
them is subject, including without limitation Environmental Laws,
and will obtain and maintain in effect all licenses, certificates,
permits, franchises and other governmental authorizations necessary
to the ownership of their respective properties or to the conduct
of their respective businesses, in each case to the extent
necessary to ensure that non-compliance with such laws, ordinances,
or governmental rules or regulations or failures to obtain or
maintain in effect such licenses, certificates, permits, franchises
and other governmental authorizations could not, individually or in
the aggregate, reasonably be expected to have a Material Adverse
Effect.
SECTION 6.5. Insurance. (a) The Company shall, and shall
cause each of its Subsidiaries to, (i) keep all of its properties
adequately insured at all times with responsible insurance carriers
against loss or damage by fire and other hazards and (ii) maintain
adequate insurance at all times with responsible carriers against
liability on account of damage to persons and property and under
all applicable workmen's compensation laws. For the purposes of
this Section 6.5(a), insurance shall be deemed adequate if the same
is not less extensive in coverage and amount than is customarily
maintained by other persons engaged in the same or similar business
similarly situated.
(b) The Company, from time to time upon request of Bank One,
promptly shall furnish or cause to be furnished to Bank One
evidence, in form and substance satisfactory to Bank One, of the
maintenance of all insurance required by this Section 6.5 to be
maintained, including, but not limited to, such originals or copies
as Bank One may request of policies, certificates of insurance,
riders and endorsements relating to such insurance and proof of
premium payments.
SECTION 6.6. Maintain Properties. The Company will and will
cause each of its Subsidiaries to maintain and keep, or cause to be
maintained and kept, their respective properties in good repair,
working order and condition (other than ordinary wear and tear), so
that the business carried on in connection therewith may be
properly conducted at all times, provided that this Section shall
not prevent the Company or any Subsidiary from discontinuing the
operation and the maintenance of any of its properties if such
discontinuance is desirable in the conduct of its business and the
Company has concluded that such discontinuance could not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
SECTION 6.7. Taxes and Claims. The Company shall duly pay
and discharge, and shall cause each of its Subsidiaries to file all
tax returns required to be filed in any jurisdiction and to pay and
discharge all taxes shown to be due and payable on such returns and
all other taxes, assessments, governmental charges, or levies
imposed on them or any of their properties, assets, income or
franchises, to the extent such taxes and assessments have become
due and payable and before they have become delinquent and all
claims for which sums have become due and payable that have or
might become a Lien on properties or assets of the Company or any
Subsidiary; provided, that neither the Company nor any Subsidiary
need pay any such tax or assessment or claim if (i) the amount,
applicability or validity thereof is contested by the Company or
such Subsidiary on a timely basis in good faith and in appropriate
proceedings, and the Company or a Subsidiary has established
adequate reserves therefor in accordance with GAAP on the books of
the Company or such Subsidiary or (ii) the nonpayment of all such
taxes and assessments in the aggregate could not reasonably be
expected to have a Material Adverse Effect.
SECTION 6.8. Corporate Existence. The Company shall, and
shall cause each of its Subsidiaries to, do or cause to be done all
things necessary to preserve, renew and keep in full force and
effect (i) its corporate existence (except as otherwise may be
permitted by Section 8.3 hereof) and (ii) all rights and franchises
(as franchisee) unless, in the good faith judgment of the Company,
the termination of or failure to preserve and keep in full force
and effect any such right or franchise could not, individually or
in the aggregate, have Material Adverse Effect.
SECTION 6.9. Change in Business. The Company shall, and
shall cause each of its Subsidiaries to, remain engaged solely in
the business of owning and operating family
restaurant/entertainment centers and other businesses directly
related thereto.
SECTION 6.10. Maintenance of Security Interest. The Company
shall maintain perfected, first priority security interests in the
Eligible LC Collateral securing any Secured Letters of Credit in
favor of Bank One in accordance with the terms of any applicable
pledge agreement entered into in connection therewith, subject only
to the Liens permitted pursuant to Section 8.1 hereof.
SECTION 6.11. Further Assurances. Upon the request of Bank
One, the Company at its cost and expense shall, and shall cause
each of its Subsidiaries to, duly execute and deliver, or cause to
be duly executed and delivered, to Bank One such further
instruments and do and cause to be done such further acts as may be
reasonably necessary or proper in the opinion of Bank One to carry
out more effectually any pledge of Eligible LC Collateral in
connection with any Secured Letter of Credit.
SECTION 6.12. Other Indebtedness Covenants. If the Company
or any Subsidiary at any time after the Effective Date and prior to
the Termination Date shall enter into any agreement relating to
Indebtedness with any party (the "Other Lender"), that requires the
Company or any Subsidiary to comply with financial covenants that
are in addition to or more restrictive than the financial covenants
in this Agreement at the time, or that permits the Other Lender to
accelerate or require the Company or any Subsidiary to purchase or
repay such Indebtedness prior to its stated maturity by reason of
a default or event of default that is in addition to or more
restrictive than the Defaults of Events or Default specified in
this Agreement at the time (in any such case howsoever described in
such agreement), each covenant, event of default or other provision
to such effect, and each related definition, in such agreement (as
amended or modified from time to time thereafter) shall be deemed
to be incorporated by reference in this Agreement, mutatis
mutandis, as if then and thereafter set forth herein in full.
Promptly after entering into any such agreement (or any amendment
or modification thereof) the Company will furnish a copy thereof
(or a copy of the covenant, event of default or other provision
that is incorporated by reference in this Agreement as aforesaid)
to Bank One.
ARTICLE VII
FINANCIAL COVENANTS
-----------------------------
The Company covenants and agrees that, until the Revolving
Credit Notes together with interest and all other Indebtedness of
the Company to Bank One under the Loan Documents are paid in full
and the Commitments are terminated, the Company shall not, without
the prior written consent of Bank One:
SECTION 7.1. Consolidated Fixed Charge Coverage Ratio.
Suffer or permit the Consolidated Fixed Charge Coverage Ratio
(calculated as of the end of each calendar quarter for the periods
of two and three consecutive quarterly accounting periods
respectively ending on or about June 30 and September 30, 1995 to
be less than 1.50 to 1.00 for such periods, and thereafter the
Company will not permit the Consolidated Fixed Charge Coverage
Ratio for any period of four consecutive quarterly accounting
periods to be less than the applicable ratio for such period
specified below:
Four Quarterly Accounting Minimum
Periods Ending on or About Ratio
-------------------------- --------
December 31, 1995 to September 30, 1996 1.50 to 1.00
thereafter to September 30, 1997 1.75 to 1.00
thereafter 2.00 to 1.00
SECTION 7.2. Minimum Net Worth. Suffer or permit at any time
(i) prior to the last day of the fiscal year ending on or about
December 31, 1995 Consolidated Net Worth to be less than
$115,000,000 and (ii) thereafter Consolidated Net Worth to be less
than the sum of (A) $115,000,000 plus (B) 75% of Consolidated Net
Income for each fiscal year ending after the Effective Date (but
without any deduction for any consolidated net loss in any fiscal
year) plus (C) 100% of the net cash proceeds of all sales of
equity securities by the Company after the Effective Date.
SECTION 7.3. Maximum Indebtedness. Suffer or permit
Consolidated Indebtedness as of the last day of any quarterly
accounting period (commencing with such accounting period ending on
or about June 30, 1995) to exceed 175% of EBITDA for the four
consecutive quarterly accounting periods then ended.
ARTICLE VIII
NEGATIVE COVENANTS
----------------------------
The Company covenants and agrees that, until the Revolving
Credit Notes together with interest and all other Indebtedness of
the Company to Bank One under this Agreement are paid in full and
the Commitments are terminated:
SECTION 8.1. Liens. (a) The Company will not and will not
permit any Subsidiary to create, assume, incur or suffer to exist
any Lien upon or with respect to any property or assets, whether
now owned or hereafter acquired, securing any Indebtedness;
provided, that nothing in this Section 8.1 shall prohibit:
(i) Liens in respect of property of the Company or
a Subsidiary existing on the date hereof and described
in Schedule 8.1 hereto, and Liens relating to any
extension, renewal or replacement of Indebtedness secured
by any such Lien as described in Schedule 8.1, provided
that the principal amount of Indebtedness secured by any
such Lien is not increased and such Lien does not extend
to or cover any property of the Company or such
Subsidiary, as the case may be, other than the property
covered by such Lien on the date hereof;
(ii) Liens in respect of property acquired by the
Company or a Subsidiary after the date hereof, (A)
existing on such property at the time of acquisition
thereof (and not incurred in anticipation thereof),
whether or not the Indebtedness secured thereby is
assumed by the Company or a Subsidiary, or (B) created
within 180 days after acquisition or completion of
construction of improvements on such property, to secure
Indebtedness assumed or incurred to finance all or any
part of the purchase price or cost of construction of
improvements on such property; or (C) in the case of any
Person that hereafter becomes a Subsidiary or is
consolidated with or merged with or into the Company or
a Subsidiary or sells, leases or otherwise disposes of
all or substantially all of its property to the Company
or a Subsidiary, existing at the time such Person becomes
a Subsidiary or is so consolidated or merged or effects
such sale, lease or other disposition of property (and
not incurred in anticipation thereof); provided that in
any such case:
(x) no such Lien shall extend to or
cover any other property of the Company or
such Subsidiary, as the case may be,
(y) the aggregate principal amount of
Indebtedness secured by all such Liens in
respect of any such property shall not exceed
the cost of such property at the time of such
acquisition or, in the case of a Lien in
respect of property existing at the time of
such Person becoming a Subsidiary or being so
consolidated or merged or effecting such sale,
lease or other disposition, the fair market
value of such property at such time, and
(z) no Lien may be created pursuant to
subclause (B) above prior to December 31,
1996;
(iii) Liens securing Indebtedness owed by a
Subsidiary to the Company or to a Wholly-Owned
Subsidiary; and
(iv) Liens securing reimbursement obligations in
connection with letters of credit obtained by the Company
or a Subsidiary (including Secured Letters of Credit
issued under this Agreement), provided that the aggregate
unpaid principal amount of Indebtedness in respect f all
such letters of credit secured by such Liens permitted by
this Section 8.1(a)(iv) does not at any time exceed
$5,000,000.
For purposes of this Section 8.1(a), any Lien existing in respect
of property at the time such property is acquired or in respect of
property of a Person at the time such Person is acquired,
consolidated or merged with or into the Company or a Subsidiary
shall be deemed to have been created at that time.
(b) In case any property is subjected to a Lien in violation
of Section 8.1(a), the Company will make or cause to be made
effective provision whereby the obligations of the Company
hereunder and under the other Loan Documents will be secured
equally and ratably with all Indebtedness and other obligations
secured by such Lien, and in any case Bank One shall have the
benefit, to the full extent that, and with such priority as, Bank
One may be entitled thereto under applicable law, of an equitable
lien on such property securing the obligations of the Company
hereunder and under the other Loan Documents. Such violation of
Section 8.1(a) shall constitute an Event of Default hereunder,
whether or not any such provision is made pursuant to this Section
8.1(b).
SECTION 8.2. Asset Sales. The Company will not and will
not permit any Subsidiary to effect any Asset Sale other than:
(a) Asset Sales in the ordinary course of business,
(b) Asset Sales of property or assets by a
Subsidiary to the Company or a Wholly-Owned Subsidiary or
a Person then becoming a Wholly-Owned Subsidiary,
(c) Asset Sales consisting of the Company's
investment as of the date of this Agreement in shares or
Indebtedness issued by Monterey Acquisition Corp., the
owner of Monterey Tex-Mex Restaurants, and
(d) other Asset Sales; provided that
(i) immediately before and after giving
effect to each such Asset Sale, no Default or
Event of Default shall have occurred and be
continuing,
(ii) the aggregate net book value of
property or assets disposed of in each Asset
Sale and all other Asset Sales by the Company
and its Subsidiaries (A) during the
immediately preceding twelve months does not
exceed 5% of Consolidated Capitalization and
(B) during the period from the date of the
Closing to and including the effective date of
such proposed Asset Sale does not exceed 10%
of Consolidated Capitalization (in each case
determined as of the last day of the quarterly
accounting period ending on or most recently
prior to the effective date of such proposed
Asset Sale), and
(iii) such Asset Sales in the aggregate
shall not involve a substantial number of
Chuck E. Cheese's restaurants (except in
connection with closing in the ordinary course
of business) or any intangible assets related
to Chuck E. Cheese's restaurants generally,
and,
provided, further, that for purposes of clause (ii) above
there shall be excluded the net book value of property or
assets disposed of in an Asset Sale if and to the extent
such Asset Sale is made for cash, payable in full upon
the completion of such Asset Sale, and an amount equal to
the net proceeds realized upon such Asset Sale is applied
by the Company or such Subsidiary, as the case may be,
within one year after the effective date of such Asset
Sale to reinvest in similar categories of property or
assets for use in the business of the Company and its
Subsidiaries (but not in a transaction permitted by
Section 8.1(a)(ii).
SECTION 8.3. Merger and Consolidation. The Company will not
and will not permit any Subsidiary to enter into any transaction of
merger or consolidation with any Person, except that the Company
may merge or consolidate with any other Person, provided that (i)
the Company shall be the surviving and continuing corporation and
(ii) no Default or Event of Default shall have occurred and be
continuing, and provided, further, that any Subsidiary of the
Company may merge or consolidate with the Company or a Wholly-Owned
Subsidiary of the Company.
SECTION 8.4. Subsidiary Indebtedness and Equity. (a) The
Company will not permit any Subsidiary to create, assume, incur,
guarantee or otherwise become liable in respect of any Indebtedness
except:
(i) Indebtedness securing Liens permitted by clause
(i), (ii) or (iii) of Section 8.1(a), and
(ii) Indebtedness of a Wholly-Owned Subsidiary owing
to the Company or another Wholly-Owned Subsidiary.
For purposes of this Section 8.4, a Subsidiary shall be deemed to
have incurred indebtedness in respect of any obligation previously
owed to the Company or to a Wholly-Owned Subsidiary on the date the
obligee ceases for any reason to be the Company or a Wholly-Owned
Subsidiary and a Person that hereafter becomes a Subsidiary shall
be deemed at that time to have incurred all of its outstanding
Indebtedness.
(b) Notwithstanding the provisions of Section 8.2 (other than
Section 8.2(c)), the Company will not sell or otherwise dispose of
and will not permit any Subsidiary to issue, sell, transfer or
otherwise dispose of any shares of capital stock of any class
(including as "capital stock" for the purposes of this Section 8.4,
any warranties, rights or options to purchase or otherwise acquire
capital stock or other securities exchangeable for or convertible
into capital stock) of any Subsidiary of the Company to any Person
other than the Company or a Wholly-Owned Subsidiary of the Company;
provided, however, that notwithstanding the foregoing, to the
extent necessary either to (i) permit a Subsidiary to operate in
conformity with applicable licensing or other similar requirements
or (ii) provide for any required directors' qualifying shares, the
Company may sell and any Subsidiary may issue, sell and transfer
shares of capital stock of a Subsidiary to Persons other than the
Company or a Wholly-Owned Subsidiary of the Company.
SECTION 8.5. Transactions with Affiliates. The Company will
not and will not permit any Subsidiary to enter into directly or
indirectly any transaction or Material group of related
transactions (including without limitation the purchase, lease,
sale or exchange of properties of any kind or the rendering of any
service) with any Affiliate (other than the Company or another
Subsidiary), except in the ordinary course and pursuant to the
reasonable requirements of the Company's or such Subsidiary's
business and upon fair and reasonable terms no less favorable to
the Company or such Subsidiary than would be obtainable in a
comparable arm's-length transaction with a Person not an Affiliate.
SECTION 8.6. Prohibited Payments. The Company will not and
will not permit any Subsidiary to make, or obligate itself to make,
any Prohibited Payment.
SECTION 8.7. Lease-Backs. Notwithstanding the provisions of
Section 8.2 hereof, the Company will not and will not permit any
Subsidiary to enter into any arrangements, directly or indirectly,
with any Person, whereby the Company or any of its Subsidiaries
shall sell or transfer any property; whether now owned or hereafter
acquired, used or useful in their respective businesses in
connection with the rental or lease of the property so sold or
transferred or of other property which the Company or any of its
Subsidiaries intends to use for substantially the same purpose or
purposes as the properties so sold or transferred.
SECTION 8.8. Negative Pledges. The Company will not and will
not permit any Subsidiary to enter into any agreement (excluding
this Agreement and the other Loan Documents) prohibiting the
creation or assumption of any Lien upon its properties, revenues,
or assets, whether now owned or hereafter acquired; provided,
however, that notwithstanding the foregoing, the Company may enter
into any such agreement in connection with and securing
Indebtedness that is (i) scheduled to mature after the Termination
Date, (ii) in an aggregate principal amount not in excess of
$12,000,000 less the Revolving Credit Commitment outstanding from
time to time hereunder, and (iii) lent by a Person other than a
commercial bank or trust company or an Affiliate thereof.
ARTICLE IX
DEFAULTS AND REMEDIES
------------------------------
SECTION 9.1. Events of Default. If any one or more of the
following events (herein called "Events of Default") shall occur
and be continuing for any reason whatsoever (and whether such
occurrence shall be voluntary or involuntary or come about or be
effected by operation of law or pursuant to or in compliance with
any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body), that is to
say:
(a) the Company defaults in the due and punctual
payment of the principal of or interest on any of the
Revolving Credit Loans or any other amounts due and owing
to Bank One, when and as the same shall become due and
payable and, with respect to defaults in payment other
than payment of principal, such default shall continue
for more than five days; or
(b) the Company defaults in the performance or
observance of, or shall occur under, any covenant,
agreement or provision contained in Sections 6.1(d) or
Article VII or VIII hereof; or
(c) the Company defaults in the performance of or
compliance with any term contained herein (other than
those referred to in Section 9.1(a) and (b)) and such
default is not remedied within 30 days after the earlier
of (i) a Responsible Officer obtaining actual knowledge
of such default and (ii) the Company receiving written
notice of such default from any holder of a Note (any
such written notice to be identified as a "notice of
default" and to refer specifically to this Section
9.1(c); or
(d) any representation or warranty made in writing
by or on behalf of the Company or by any officer of the
Company in this Agreement or any other Loan Document or
in any writing furnished in connection with the
transactions contemplated hereby proves to have been
false or incorrect in any material respect on the date as
of which made; or
(e) (i) the Company or any Subsidiary is in default
(as principal or as guarantor or other surety) in the
payment of any principal of or premium or make-whole
amount or interest on any Indebtedness (other than the
Notes) that is outstanding in an aggregate principal
amount of at least $1,000,000 beyond any period of grace
provided with respect thereto, or (ii) the Company or any
Subsidiary is in default in the performance of or
compliance with any term of any evidence of any
Indebtedness in an aggregate outstanding principal amount
of at least $1,000,000 or of any mortgage, indenture or
other agreement relating thereto or any other condition
exists, and as a consequence of such default or condition
such Indebtedness has become, or has been declared, or
one or more Persons are entitled to declare such
Indebtedness to be, due and payable before its stated
maturity or before its regularly scheduled dates of
payment, or (iii) as a consequence of the occurrence or
continuation of any event or condition (other than the
passage of time or the right of the holder of
Indebtedness to convert such Indebtedness into equity
interests), (x) the Company or any Subsidiary has become
obligated to purchase or repay Indebtedness before its
regular maturity or before its regularly scheduled dates
of payment in an aggregate outstanding principal amount
of at least $1,000,000, or (y) one or more Persons have
the right to require the Company or any Subsidiary so to
purchase or repay such Indebtedness; or
(f) the Company or any Subsidiary (i) is generally
not paying, or admits in writing its inability to pay,
its debts as they become due, (ii) files, or consents by
answer or otherwise to the filing against it of, a
petition for relief or reorganization or arrangement or
any other petition in bankruptcy, for liquidation or to
take advantage of any bankruptcy, insolvency,
reorganization, moratorium or other similar law of any
jurisdiction, (iii) makes an assignment for the benefit
of its creditors, (iv) consents to the appointment of a
custodian, receiver, trustee or other officer with
similar powers with respect to it or with respect to any
substantial part of its property, (v) is adjudicated as
insolvent or to be liquidated, or (vi) takes corporate
action for the purpose of any of the foregoing; or
(g) a court or governmental authority of competent
jurisdiction enter an order appointing, without consent
by the Company or any Subsidiary, a custodian, receiver,
trustee or other officer with similar powers with respect
to it or with respect to any substantial part of its
property, or constituting an order for relief or
approving a petition for relief or reorganization or any
other petition in bankruptcy or for liquidation or to
take advantage of any bankruptcy or insolvency law of any
jurisdiction, or ordering the dissolution, winding-up or
liquidation of the Company or any Subsidiary, or any such
petition shall be filed against the Company or any
Subsidiary and such petition shall not be dismissed
within 60 days; or
(h) a final judgment or judgments for the payment
of money aggregating in excess of $500,000 are rendered
against one or more of the Company and its Subsidiaries
which judgments are not, within 60 days after entry
thereof, bonded, paid, discharged or stayed pending
appeal, or are not discharged within 60 days after the
expiration of such stay; or
(i) if (i) any Plan shall fail to satisfy the
minimum funding standards of ERISA of the Code for any
plan year or par thereof or a waiver of such standards or
extension of any amortization period is sought or granted
under section 412 of the Code, (ii) a notice of intent to
terminate any Plan shall have been or is reasonably
expected to be filed with the PBGC or the PBGC shall have
instituted proceedings under ERISA section 4042 to
terminate or appoint a trustee to administer any Plan or
the PBGC shall have notified the Company or any ERISA
Affiliate that a Plan may become a subject of any such
proceedings, (iii) the aggregate "amount of unfunded
benefit liabilities" (within the meaning of section
4001(a)(18) of ERISA) under all Plans, determined in
accordance with Title IV of ERISA, shall exceed
$1,000,000, (iv) the Company or any ERISA Affiliate shall
have incurred or is reasonably expected to incur any
liability pursuant to Title I or IV of ERISA or the
penalty or excise tax provisions of the Code relating to
employee benefit plans, (v) the Company or any ERISA
Affiliate withdraws from any Multiemployer Plan, or (vi)
the Company or any Subsidiary establishes or amends any
employee welfare benefit plan that provides post-
employment welfare benefits in a manner that would
increase the liability of the Company or any Subsidiary
thereunder; and any such event or events described in
clauses (i) through (vi) above, either individually or
together with any other such event or events, could
reasonably be expected to have a Material Adverse Effect
(for which purpose, as used in this Section 9.1(i), the
terms "employee benefit plan" and "employee welfare
benefit plan" shall have the respective meanings assigned
to such terms in Section 3 of ERISA); or
(j) if there shall occur a Change of Control;
then, in the case of an Event of Default described in clause (f) or
(g) above, the Commitments shall automatically terminate and (i)
the unpaid balance of the Revolving Credit Notes and all interest
accrued thereon and (ii) any accrued and unpaid fees and expenses
due and payable hereunder or under any other Loan Document shall
automatically (without any action on the part of Bank One and
without presentment, demand, protest or notice of any kind, all of
which are hereby expressly waived) forthwith become due and
payable, and, in the case of any other Event of Default, then and
in any such event, and at any time thereafter, if such or any other
Event of Default shall then be continuing, Bank One may declare (i)
the Commitments to be terminated, whereon the obligation of Bank
One to make further Revolving Credit Loans hereunder or to issue
additional Letters of Credit shall terminate immediately and (ii)
the Revolving Credit Notes to be due and payable, whereupon the
maturity of the then unpaid balance of the Revolving Credit Notes
shall be accelerated and the same, and all interest accrued thereon
and any accrued and unpaid fees and expenses due and payable
hereunder, shall forthwith become due and payable without
presentment, demand, protest or notice of any kind, all of which
are hereby expressly waived, anything contained herein or in
Revolving Credit Notes to the contrary notwithstanding. In
addition, upon any termination of the Commitments as set forth
above, Bank One, in its sole discretion, may demand that the
Company pay to Bank One immediately as cash collateral an amount
equal to the sum of the aggregate amounts available to be drawn
under all outstanding Letters of Credit (other than Secured Letters
of Credit) plus the aggregate amounts drawn under any Letter of
Credit to the extent such amounts have not been reimbursed or
converted into Revolving Credit Notes.
SECTION 9.2. Suits for Enforcement. In case any one or more
Events of Default shall occur and be continuing, Bank One may
proceed to protect and enforce their rights or remedies either by
suit in equity or by action at law, or both, whether for the
specific performance of any covenant, agreement or other provision
contained herein, in the other Loan Documents, or in any document
or instrument delivered in connection with or pursuant to this
Agreement or the other Loan Documents or to enforce the payment of
the Revolving Credit Notes or any other legal or equitable right or
remedy.
SECTION 9.3. Rights and Remedies Cumulative. No right
or remedy herein conferred upon Bank One is intended to be
exclusive of any other right or remedy contained herein or in the
other Loan Documents or in any instrument or document delivered in
connection with or pursuant to this Agreement or the other Loan
Documents, and every such right or remedy shall be cumulative and
shall be in addition to every other such right or remedy contained
herein and therein or now or hereafter existing at law or in equity
or by statute, or otherwise.
SECTION 9.4. Rights and Remedies Not Waived. No course
of dealing between the Company and Bank One or any failure or delay
on the part of Bank One in exercising any rights or remedies
hereunder shall operate as a waiver of any rights or remedies of
Bank One and no single or partial exercise of any rights or
remedies hereunder shall operate as a waiver or preclude the
exercise of any other rights or remedies hereunder.
ARTICLE X
MISCELLANEOUS
------------------
SECTION 10.1. Collection Costs. In the event that Bank
One shall retain or engage an attorney or attorneys to collect or
enforce or protect its interests with respect to this Agreement,
any of the other Loan Documents, or any instrument or document
delivered pursuant to this Agreement or the other Loan Documents,
including, without limitation, each of the documents referred to in
Article V hereof, or to protect the rights of any holder or holders
with respect thereto, the Company shall pay, within 10 days after
demand therefor, all of the costs and expenses of such collection,
enforcement or protection, including reasonable attorneys' fees and
disbursements, and Bank One may take judgment for all such amounts,
in addition to the unpaid principal balance of the Revolving Credit
Notes and accrued interest thereon and any accrued and unpaid fees
and expenses due and payable hereunder.
SECTION 10.2. Modification and Waiver. No modification,
amendment or waiver of any provision of this Agreement, the other
Loan Documents or any other documents executed in connection
herewith or therewith and no consent by Bank One to any departure
therefrom by the Company shall be effective unless such
modification, amendment, waiver or consent shall be in writing and
signed by Bank One and, in the case of a modification or amendment
other a waiver or consent, by a duly authorized officer of the
Company, and the same shall then be effective only for the period
and on the conditions and for the specific instances and purposes
specified in such writing. No notice to or demand on the Company
in any case shall entitle the Company to any other or further
notice or demand in similar or other circumstances.
SECTION 10.3. GOVERNING LAW. THIS AGREEMENT AND THE
REVOLVING CREDIT NOTES AND THE RIGHTS AND DUTIES OF THE PARTIES
THEREUNDER AND WITH RESPECT TO INTEREST, SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF TEXAS,
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.
SECTION 10.4. Notices. All notices, requests, demands
or other communications provide for herein shall be in writing and
shall be deemed to have been given (i) three days after the date
mailed if sent by registered or certified mail, postage prepaid,
return receipt requested, or (ii) on the day of delivery if
personally delivered, addressed, as the case may be, to Bank One as
follows: to Bank One at 1717 Main Street, Dallas, Texas 75201
(Attention: Paul Koch), with a copy of Willkie Farr & Gallagher,
153 E. 53rd Street, New York, New York 10022 ( Attention: Brent W.
White, Esq.); and to the Company at P. O. Box 152077, Irving, Texas
75015, (Attention: Larry Page), with a copy to Winstead, Sechrest
& Minick, 5400 Renaissance Tower, 1201 Elm Street, Dallas, Texas
75270 (Attention: Darrel Rice, Esq.), or to such other person or
address as either party shall designate to the other from time to
time in writing forwarded in like manner, or (iii) on the day of
transmission if sent by telecopier and confirmed, on the same day
as such notice is sent, by telephonic notice or by one of the other
two methods listed above.
SECTION 10.5. Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with
GAAP, consistently applied. Where any accounting determination or
calculation is required to be made under this Agreement, such
determination or calculation (unless otherwise provided) will be
made in accordance with GAAP, consistently applied except that if,
because of a change in GAAP, the Company would have to alter a
previously utilized accounting method or policy in order to remain
in compliance with GAAP, such determination or calculation may be
made in accordance with the Company's accounting methods or
policies that are consistent with any such change in GAAP. Unless
otherwise specified herein all financial statements required to be
delivered hereunder, shall be prepared and all financial records
shall be maintained in accordance with GAAP.
SECTION 10.6. Costs and Expenses; Indemnity. (a) The Company
agrees to pay on demand all reasonable out-of-pocket costs and
expenses incurred by Bank One in connection with the preparation,
execution, delivery, filing, recording, administration,
modification, restatement or amendment of this Agreement, the other
Loan Documents and all instruments and documents delivered pursuant
to this Agreement or the other Loan Documents (including any
waivers or consents which may be requested by the Company)
including, without limitation, each of the documents referred to in
Section 5.1 hereof, all out-of-pocket costs and expenses, if any,
in connection with the enforcement (whether in the context of a
civil action, adversary proceeding, workout or otherwise) of this
Agreement, the other Loan Documents, and such other instruments and
documents, including, without limitation, reasonable attorneys'
fees, audit charges, appraisal fees, UCC lien search fees and
filing fees. The Company agrees to be responsible for payment of
the amounts referred to in this Section 10.6 whether or not any
Revolving Credit Loans are made hereunder.
(b) The Company further agrees to indemnify and save harmless
Bank One, any Participants and each of their respective officers,
directors, employees, Bank One, and Affiliates from and against any
and all actions, causes of action, suits, losses, liabilities and
damages and expenses (including, without limitation, attorneys'
fees) in connection therewith (herein called the "Indemnified
Liabilities") incurred by Bank One, any Participants or any of
their respective officers, directors, employees, Bank Ones or
Affiliates as a result of, or arising out of or relating to any of
the transactions contemplated hereby or by the other Loan
Documents, except for any Indemnified Liabilities arising on
account of the gross negligence or willful misconduct of the Person
seeking indemnity under this Section 10.6(b); provided, however,
that, if and to the extent such agreement to indemnify may be
unenforceable for any reason, the Company shall make the maximum
contribution to the payment and satisfaction of each of the
Indemnified Liabilities which shall be permissible under applicable
law. The agreements in this Section 10.6 shall survive the payment
of the Revolving Credit Notes and related obligations.
SECTION 10.7. WAIVER OF JURY TRIAL AND SETOFF. EACH OF
COMPANY AND BANK ONE HEREBY WAIVES TRIAL BY JURY IN ANY LITIGATION
IN ANY COURT WITH RESPECT TO, IN CONNECTION WITH, OR ARISING OUT OF
THIS AGREEMENT, THE OTHER LOAN DOCUMENTS OR ANY INSTRUMENT OR
DOCUMENT DELIVERED PURSUANT TO THIS AGREEMENT OR THE OTHER LOAN
DOCUMENTS, OR THE VALIDITY, PROTECTION, INTERPRETATION. COLLECTION
OR ENFORCEMENT THEREOF, OR ANY OTHER CLAIM OR DISPUTE HOWSOEVER
ARISING, BETWEEN COMPANY AND BANK ONE; AND COMPANY HEREBY WAIVES
THE RIGHT TO INTERPOSE ANY SETOFF, COUNTERCLAIM OR CROSS-CLAIM IN
CONNECTION WITH ANY SUCH LITIGATION, IRRESPECTIVE OF THE NATURE OF
SUCH SETOFF, COUNTERCLAIM OR CROSS-CLAIM (UNLESS SUCH SETOFF,
COUNTERCLAIM OR CROSS-CLAIM COULD NOT, BY REASON OF ANY APPLICABLE
FEDERAL OR STATE PROCEDURAL LAWS, BE INTERPOSED, PLEADED OR ALLEGED
IN ANY OTHER ACTION).
SECTION 10.8. Captions. The captions of the various
sections and paragraphs of this Agreement have been inserted only
for the purpose of convenience; such captions are not a part of
this Agreement and shall not be deemed in any manner to modify,
explain, enlarge or restrict any of the provisions of this
Agreement.
SECTION 10.9. Lien; Setoff by Bank One. The Company
hereby grants to Bank One a continuing lien for its reimbursement
obligations to Bank One in connection with the Secured Letters of
Credit upon:
(i) any and all moneys, securities and other
property of the Company and its Subsidiaries and the
proceeds thereof, now or hereafter held or received by or
in transit to, Bank One from or for the Company or any of
its Subsidiaries, whether for safekeeping, custody,
pledge, transmission, collection or otherwise, and
(ii) any and all deposits (general or specific, but
excluding any special deposit established for the benefit
of any Person other than the Company or an Affiliate
thereof) and credits of the Company and its Subsidiaries
with, and any and all claims of the Company and its
Subsidiaries against, Bank One, at any time existing.
In addition, the Company acknowledges that, upon the occurrence of
any Event of Default, Bank One may, to the extent provided by
applicable law, at any time and from time to time, without notice
to the Company, setoff, appropriate and apply any or all items
hereinabove referred to against all Indebtedness of the Company to
Bank One, whether under this Agreement, the Revolving Credit Notes
or otherwise, and whether now existing or hereafter arising. Bank
One agrees promptly to notify the Company after any such setoff and
application is made, provided that the failure to give such notice
shall not affect the validity of such setoff and application.
SECTION 10.10. Jurisdiction; Service of Process. The Company
hereby irrevocably consents to the jurisdiction of the Courts of
the State of Texas and of any Federal Court, in either case located
in Dallas, Texas, and agrees that venue in each of such Courts is
proper in connection with any action or proceeding arising out of
or relating to this Agreement, the other Loan Documents, or any
document or instrument delivered pursuant to this Agreement or the
other Loan Documents. Nothing herein shall affect the fight of
Bank One to serve process in any other manner permitted by law or
to commence legal proceedings or otherwise proceed against the
Company in any other jurisdiction.
SECTION 10.11. Benefit of Agreement. This Agreement shall be
binding upon and inure to the benefit of the Company, Bank One and
their respective successors and assigns, except that the obligation
of Bank One to make Revolving Credit Loans hereunder and to issue
Letters of Credit hereunder shall not inure to the benefit of any
successors or assigns of the Company.
SECTION 10.12. Counterparts. This Agreement may be executed
by the parties hereto individually or in any combination, in one or
more counterparts, each of which shall be an original and all of
which shall together constitute one and the same agreement.
SECTION 10.13. Interest. (a) Usury Limitation. It is the
intention of the parties hereto to conform strictly to the usury
laws now in force in the appropriate controlling jurisdiction.
Accordingly, if the transactions contemplated hereby would be
usurious, under any controlling law, then, in that event,
notwithstanding anything to the contrary in this Agreement the
Revolving Credit Notes or any other instrument or agreement entered
into in connection therewith, it is agreed as follows:
(i) the aggregate of all charges which constitute
interest under the laws of the controlling jurisdiction
that are contracted for, chargeable or receivable under
this Agreement or under any of the other aforesaid
instruments or agreements or otherwise in connection with
the Revolving Credit Notes ("Interest") shall under no
circumstances exceed the maximum amount of interest
permitted by law (the "Maximum Amount" and any Interest
in excess of the Maximum Amount shall be canceled
automatically and shall not be payable under this
Agreement, the Revolving Credit Notes or the aforesaid
instruments or agreements and, if theretofore paid, shall
be either refunded to the Company or credited ratably on
the principal of the Revolving Credit Notes; and
(ii) in the event that the maturity of the Revolving
Credit Notes is accelerated by reason of an election of
Bank One resulting from any Event of Default under this
Agreement or otherwise, or in the event of any voluntary
or mandatory prepayment by the Company permitted or
required by this Agreement, the Revolving Credit Notes or
any of the other aforesaid instruments or agreements,
then Interest may never include more than the Maximum
Amount, and excess Interest, if any, shall be canceled
automatically as of the date of such acceleration of
prepayment, and if theretofore paid, shall be either
refunded to the Company or credited ratably on the
principal of the Revolving Credit Notes;
provided, that nothing contained in this Section 10.13 shall be
deemed to imply that the laws of any State other than the State of
Texas shall govern this Agreement or the Revolving Credit Notes.
(b) Recapture. If, at any time, Interest would exceed the
Maximum Amount but for the foregoing limitation, Interest shall
remain at the Maximum Amount, notwithstanding any subsequent
reduction of Interest, until the total amount of Interest equals
the amount of Interest which would have accrued if Interest had not
been limited to the Maximum Amount, but nothing in this paragraph
shall affect or extend the maturity of any of the Revolving Credit
Notes.
If, at maturity or final payment of any of the Revolving
Credit Notes, the total amount of Interest paid is less than the
total amount of Interest which would have accrued had Interest not
been limited to the Maximum Amount, the Company agrees, to the full
extent permitted by law, to pay to Bank One an amount equal to the
positive difference, if any, derived by subtracting (x) the amount
of Interest which accrued on its respective Revolving Credit Notes
pursuant to the provisions of the foregoing two paragraphs from (y)
the lesser of (i) the amount of Interest which would have accrued
on such Revolving Credit Notes if the Maximum Amount had at all
times been in effect, and (ii) the amount of Interest which would
have accrued if Interest on such Revolving Credit Notes, not
limited to the Maximum Amount, had at all times been in effect.
(c) To the extent federal law permits Bank One to contract
for, charge, or receive a greater amount of interest than the
Maximum Amount, Bank One will rely upon federal law instead of
TEX.REV.CIV.STAT.ANN. Article 5069-1.04, as amended, for the
purpose of determining the maximum rate or amount. Additionally,
to the maximum extent permitted by applicable law now or hereafter
in effect, Bank One may, at it option and from time to time,
implement any other method of computing the maximum rate under such
Article 5069.1.04, as amended, or under other applicable law by
giving notice, if required to the Company as provided by applicable
law now or hereafter in effect. Notwithstanding anything to the
contrary contained herein or in any of the other Loan Documents, it
is not the intention of Bank One to accelerate the maturity of any
interest that has not accrued at the time of such acceleration or
to collect unearned interest at the time of such acceleration.
SECTION 10.14. Attorneys' Fees. As used in this Agreement,
"attorneys' fees" shall include, without limitation, all reasonable
fees of counsel (including, without limitation, those incurred on
appeals) arising from such services and all reasonably incurred
expenses, costs, charges and other fees of such counsel, and all
such fees shall constitute Indebtedness of the Company to Bank One
under this Agreement Without limiting the generality of the
foregoing, such expenses, costs, charges and fees may include:
paralegal fees, costs and expenses; accountants' fees, costs and
expenses; court costs and expenses; photocopying and duplicating
expenses; long distance telephone charges; air express and courier
charges; telegram charges; secretarial overtime charges; and,
expenses for travel, lodging and food paid or incurred in
connection with the performance of such legal services.
SECTION 10.15. Severability. Any provision of this Agreement
prohibited by the laws of any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition, or
modified to conform with such laws, without invalidating the
remaining provisions of this Agreement, and any such prohibition in
any jurisdiction shall not invalidate such provisions in any other
jurisdiction.
SECTION 10.16. Confidentiality. Bank One will maintain the
confidentiality of Confidential Information in accordance with
procedures adopted by it in good faith to protect confidential
information of third parties delivered to it; provided that Bank
One may deliver or disclose Confidential Information to (i) its
directors, officers, trustees, employees, agents, attorneys and
Affiliates (to the extent such disclosure reasonably relates to the
administration of this transactions contemplated hereby), (ii) its
financial advisors and other professional advisors whose duties
require them to hold confidential the Confidential Information
substantially in accordance with the terms of this Section 10.16,
(iii) any other holder of any Note, (iv) any Person to whom Bank
One sells or offers to sell such Note or any part thereof or any
participation therein (if such Person has agreed in writing prior
to its receipt of such Confidential Information to be bound by the
provisions of this Section 10.16), (v) any Person from which Bank
One offers to purchase any security of the Company (if such Person
has agreed in writing prior to its receipt of such Confidential
Information to be bound by the provisions of this Section 10.16),
(vi) any federal or state regulatory authority having jurisdiction
over Bank One, (vii) any other Person to which such delivery or
disclosure may be necessary or appropriate (w) to effect compliance
with any law, rule, regulation or order applicable to Bank One, (x)
in response to any subpoena or other legal process, (y) in
connection with any litigation to which Bank One is a party or (z)
if an Event of Default has occurred and is continuing, to the
extent Bank One may reasonably determine such delivery and
disclosure to be necessary or appropriate in the enforcement or for
the protection of the rights and remedies under this Agreement and
the other Loan Documents.
SECTION 10.17. Loss, Theft, Etc. of Notes. Upon receipt by
the Company of (i) an affidavit of an authorized officer of Bank
One setting forth the fact of loss, theft or destruction of any
Note and of its ownership of the Note at the time of such loss,
theft or destruction or (ii) a mutilated Note, such affidavit or
mutilated Note shall be accepted as satisfactory evidence thereof
and no further indemnity shall be required as a condition to the
execution and delivery of a new Note of like tenor in lieu of such
lost, stolen, destroyed or mutilated Note without expense to the
holder thereof, provided that Bank One agrees in writing to
indemnify the Company.
ARTICLE XI
PARTICIPATIONS; SALES AND TRANSFERS
------------------------------------------------
SECTION 11.1. Participations. (a) Bank One may grant
participations to other Persons of such its choosing in all or any
portion of its rights and/or obligations hereunder, under its
Commitments and the Revolving Credit Loans. As between the Company
and Bank One, however, Bank One shall not be relieved of any of its
obligations hereunder as a result of the granting of any
participation. The Company hereby acknowledges and agrees that the
grant of any participation described in this Section 11.1 will give
rise to a direct obligation of the Company to the Participant and
such Person may rely on, and posses all rights under, any opinions,
certificates, or other instruments delivered under or in connection
with this Agreement or the other Loan Documents, provided, however,
that the Company shall only be required to deliver information and
data required pursuant to this Agreement to Bank One; and provided,
further, that no Participant shall be entitled to any payment from
the Company in an amount greater than that which Bank One would
have been entitled to under this Agreement.
(b) Bank One may furnish to Participants (including, without
limitation, prospective Participants) any information concerning
the Company or its Subsidiaries received by it from time to time
pursuant to this Agreement, provided, however, that each
Participant to whom any such information is delivered shall agree
not to use or to disclose to any other Person such information
except as provided in Section 10.17.
THIS AGREEMENT CONTAINS A WAIVER OF TRIAL BY JURY. SEE
SECTION 10.7 HEREOF.
IN WITNESS WHEREOF, the Company and Bank One have caused this
Agreement to be duly executed by their respective officers
thereunto duly authorized as of the day and year first above
written.
SHOWBIZ PIZZA TIME, INC.
By:Larry G. Page
Title:Chief Financial Officer
BANK ONE, TEXAS, N.A.
By:Paul C. Koch
Title:Vice President
EXHIBIT
REVOLVING CREDIT NOTE
$5,000,000 Dallas, Texas
June 27, 1995
FOR VALUE RECEIVED, the undersigned, SHOWBIZ PIZZA TIME, INC.,
a Kansas corporation ("Company"), hereby unconditionally promises
to pay to the order of BANK ONE, TEXAS, N.A. ("Bank One") at the
office of Bank One or any successor, currently located at 1717 Main
Street, Dallas, Texas 75201, on June 27, 1997 (or on any annual
anniversary thereof agreed to in writing by Bank One and the
Company), in lawful money of the United States of America and
immediately available funds, an amount equal to the lesser of (a)
FIVE MILLION DOLLARS ($5,000,000), and (b) the aggregate unpaid
principal amount of all Revolving Credit Loans made by Bank One to
the Company pursuant to Section 2.1 of the Loan Agreement, dated as
of June 27, 1995, between Bank One and the Company (as amended,
modified or supplemented from time to time in accordance with its
terms, the "Loan Agreement").
The Company further promises to pay interest (computed on the
basis of a 360-day year for the actual days elapsed) in like money
on the unpaid principal balance of this Note from time to time
outstanding at the annual rates provided in the Loan Agreement.
Interest shall be payable at the times and in the manner provided
in the Loan Agreement.
All Revolving Credit Loans made by Bank One pursuant to
Section 2.1 of the Loan Agreement and all payments of the principal
thereof shall be endorsed by the holder of this Note on the
schedule annexed hereto (including any additional pages such holder
may add to such schedule), which endorsement shall constitute prima
facie evidence of the accuracy of the information so endorsed;
provided, however, that the failure of the holder of this Note to
insert any date or amount or other information on such schedule
shall not in any manner affect the obligation of the company to
repay any Revolving Credit Loans in accordance with the terms of
the Loan Agreement.
On and after the stated or any accelerated maturity hereof,
this Note shall bear interest until paid in full (whether before or
after the occurrence of any event of Default described in Sections
9.1(g) and 9.1(h) of the Loan Agreement) at a rate of 2.50% per
annum in excess of the Prime Rate, payable on demand, but in no
event in excess of the maximum rate of interest permitted under
applicable law. Such interest rate shall change when and as the
Prime Rate changes.
This Note is a Revolving Credit Note referred to in the Loan
Agreement, is entitled to the benefits thereof and is subject to
optional and mandatory prepayment, in whole or in part, as provided
therein. Reference is herein made to the Loan Agreement for the
rights of the holder to accelerate the unpaid balance hereof prior
to maturity.
The Company hereby waives diligence, demand, presentment,
protest and notice of any kind, release, surrender or substitution
of security, or forbearance or other indulgence, without notice.
This Note and all of the other Loan Documents are intended to
be performed in accordance with, and only to the extent permitted
by, all applicable usury laws. If any provision hereof or of any
of the other Loan Documents or the application thereof to any
person or circumstance shall, for any reason and to any extent, be
invalid or unenforceable, neither the application of such provision
to any other person or circumstance nor the remainder of the
instrument in which such provision is contained shall be affected
thereby and shall be enforced to the greatest extent permitted by
law. It is expressly stipulated and agreed to be the intent of
Bank One at all times to comply with the usury and other applicable
laws now or hereafter governing the interest payable on the
Indebtedness evidenced by this Note. If the applicable law is ever
revised, repealed or interpreted so as to render usurious any
amount called for under this Note or any of the other Loan
Documents, or contracted for, charged, taken, reserved or received
with respect to the Indebtedness evidenced by this Note, or if Bank
One's exercise of the option to accelerate the maturity of this
Note, or if any prepayment by the Company results in the Borrower's
having paid any interest in excess of that permitted by law, then
it is the express intent of the company and Bank One that all
excess amounts theretofore collected by Bank One be credited on the
principal balance of this Note (or, if this Note and all other
Indebtedness arising under or pursuant to the other Loan Documents
have been paid in full, refunded to the Company), and the
provisions of this Note and the other Loan Documents immediately be
deemed reformed and the amounts thereafter collectable hereunder
and thereunder reduced, without the necessity of the execution of
any new document, so as to comply with the then applicable law, but
so as to permit the recovery of the fullest amount otherwise called
for hereunder or thereunder. All sums paid, or agreed to be paid,
by the Company for the use, forbearance, detention, taking,
charging, receiving or reserving of the Indebtedness of the company
to Bank One under this Note or arising under of pursuant to the
other Loan Documents shall, to the maximum extent permitted by
applicable law, be amortized, prorated, allocated and spread
throughout the full term of such Indebtedness until payment in full
so that the rate or amount of interest on account of such
Indebtedness does not exceed the usury ceiling from time to time in
effect and applicable to such Indebtedness for so long as such
Indebtedness is outstanding. To the extent federal law permits
Bank One to contract for, charge, or receive a greater amount of
interest, Bank One will rely upon federal law instead of TEX. REV.
CIV. STAT. ANN. Article 5069-1.04, as amended, for the purpose of
determining the maximum rate or amount. Additionally, to the
maximum extent permitted by applicable law now or hereafter in
effect, Bank One may, at is option and from time to time, implement
any other method of computing the maximum rate under such Article
5069-1.04, as amended, or under other applicable law by giving
notice, if required to the Company as provided by applicable law
now or hereafter in effect. Notwithstanding anything to the
contrary contained herein or in any of the other Loan Documents, it
is not the intention of Bank One to accelerate the maturity of any
interest that has not accrued at the time of such acceleration or
to collect unearned interest at the time of such acceleration.
Capitalized terms used herein and not otherwise defined shall
have the meaning ascribed to them in the Loan Agreement.
This Note may not be changed, modified, or terminated orally,
but only by an agreement in writing signed by the party to be
charged.
IN THE EVENT OF ANY LITIGATION WITH RESPECT TO THIS REVOLVING
CREDIT NOTE, COMPANY WAIVES (TO THE EXTENT PERMITTED BY LAW) THE
RIGHT TO A TRIAL BY JURY. ALL RIGHTS OF SETOFF AND RIGHTS TO
INTERPOSE COUNTERCLAIMS AND CROSS-CLAIMS (UNLESS SUCH SETOFF,
COUNTERCLAIM OR CROSS-CLAIM COULD NOT, BY REASON OF ANY APPLICABLE
FEDERAL OR STATE PROCEDURAL LAWS, BE INTERPOSED, PLEADED OR ALLEGED
IN ANY OTHER ACTION) AND THE DEFENSES OF FORUM NON CONVENIENS AND
IMPROPER VENUE. COMPANY HEREBY IRREVOCABLY CONSENTS TO THE NON-
EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF TEXAS AND OF
ANY FEDERAL COURT LOCATED IN THE DALLAS, TEXAS, IN CONNECTION WITH
ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
REVOLVING CREDIT NOTE. THIS NOTE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAW AND SHALL BE BINDING UPON
THE SUCCESSORS AND ASSIGNS OF COMPANY AND INURE TO THE BENEFIT OF
BANK ONE AND ITS SUCCESSORS AND ASSIGNS. If any term or provision
of this Revolving Credit Note shall be held invalid, illegal or
unenforceable, the validity of all other terms and provisions
herein shall in no way be affected thereby.
IN WITNESS WHEREOF, the Company has executed and delivered
this Note on the date first above written.
SHOWBIZ PIZZA TIME, INC.
By:____________________________________
Title:______________________________
Grid Schedule
--------------
Attached to and made part of the revolving Credit Note, dated
June 27, 1995, by ShowBiz Pizza Time, Inc. to the order
of Bank One, Texas, N.A. ("Bank One") pursuant to the
Loan Agreement, dated as of June 27, 1995 between Bank One
and ShowBiz Pizza Time, Inc.
------------------------------------------------------------------------------
Loan Type
(LIBO Rate Loan or
Prime Rate Loan) Interest Period
Principal (Borrowed or and Interest Rate
Date Amount Converted to) (LIBO Rate only)
------------------------------------------------------------------------------
Unpaid
Amount of Principal Balance Name of
Principal Paid or or Prepaid or Person Making
Prepaid or Converted Converted Notation
-------------------------------------------------------------------------------
EXHIBIT B
FORM OF REVOLVING CREDIT LOAN REQUEST
_____________, 19__
Bank One, Texas, N.A.
1717 Main Street
Dallas, Texas 75201
Att'n: Paul Koch
Re: Loan Agreement, dated as of June 27, 1995, (as
amended or supplemented from time to time, the
"Loan Agreement"), between ShowBiz Pizza time, Inc.
(the "Company") and Bank One, Texas, N.A.
Dear Sir:
Reference is made to the above-referenced Loan Agreement
(capitalized terms used herein that are not defined shall have the
respective meanings ascribed thereto in the Loan Agreement). The
Company hereby gives notice of its intention to borrow, continue or
convert Revolving Credit Loans under the Loan Agreement as set
forth below.
The amount of each given Loan type requested to be borrowed,
continued or converted is in an aggregate principal amount,
together with Revolving Credit Loans of the same Loan type to be
made or continued as such and Revolving Credit Loans of other Loan
types to be converted to such Loan type (or, in the case of the
conversion of less than all of the outstanding Revolving Credit
Loans of a given Loan type to another Loan type, any Revolving
Credit Loans of such other Loan type made or continued as such
other Loan type) pursuant to this Loan Request, of at least
$300,000 or any integral multiple of $100,000.
I. Advances
[In the case all or a portion of a borrowing is made as Prime Rate
Loans.]
Please advance $__________ as Prime Rate Loans effective on
___________, 19___. Interest accrued for such Prime Rate Loans
shall be payable quarterly and in arrears on the first Business Day
of each calendar quarter commencing with the first such date
following the date of the advance of such Prime Rate Loans.
[In the case all or a portion of a borrowing is made as LIBO Rate
Loans.]
Please advance $__________as LIBO Rate Loans effective on
___________, 19___ (which is not less than three Banking Days from
the date hereof). The Interest Period for such LIBO Rate Loans
will commence on and include the date of advance and will end,
subject to the limitations applicable to Interest Periods contained
in the Loan Agreement, on the date that is [30] [60] [90] [120]
[180] days thereafter.
II. Conversions
A. Conversions from Prime Rate
[In the case of the conversion of all [or a portion] of
Revolving Credit Loans that are Prime Rate Loans into LIBO Rate
Loans.]
Please convert $_____[, which amount represents the entire
outstanding principal amount] of the Revolving Credit Loans that
are Prime Rate Loans into LIBO Rate Loans effective on ______, 19__
(which is not less than three Banking Days from the date hereof).
The Interest Period for such LIBO Rate Loans will commence on and
include the date of advance and will end, subject to the
limitations applicable to Interest Periods contained in the Loan
Agreement, on the date that is [30] [60] [90] [120] [180] days
thereafter.
B. Conversions from LIBO Rate
[In the case of the conversion of all [or a portion] of LIBO Rate
Loans into Prime Rate Loans.]
Please convert $__________ [, which amount represents the
entire outstanding principal amount] of the LIBO Rate Loans of the
undersigned, the Interest Period with respect to which ends on
________________, 19___, into Prime Rate Loans effective on such
date.
III. Continuations
[In the case of the continuation of all [or a portion] of LIBO Rate
Loans.]
Please continue $__________ [, which amount represents the
entire outstanding principal amount] of the LIBO Rate Loans of the
undersigned, the Interest Period with respect to which ends on
_______________ (which is not less than three Banking Days from the
date hereof), as LIBO Rate Loans with an Interest Period commencing
on and including such date and ending, subject to the limitations
applicable to Interest Periods contained in the Loan Agreement, on
the date that is [30] [60] [90] [120] [180] days thereafter.
[The remaining $__________ of such LIBO Rate Loans will be
prepaid or converted on __________, 19___.]
[All the following shall be supplied in all loan requests:]
The Company represents and warrants, as of the date hereof and
as of the date any Revolving Credit Loan is made, converted, or
continued as requested above, as follows;
(a) after giving effect to the Revolving Credit
Loan(s) requested above, including any continuation or
conversion of any Revolving Credit Loan(s), all the
requirements contained in Section 2.3 of the Loan Agreement
are satisfied;
(b) each of the representations and warranties
made in or pursuant to any Loan Document or which is
contained in any agreement, instrument, certificate, document
or other writing furnished at any time under or in connection
with any Loan Document (except to the extent any
representation or warranty expressly relates to an earlier
date) is, and as of the effective date of any advance,
continuation or conversion requested above will be, true and
correct in all material respects, and each of the covenants
and agreements contained in any Loan Document have been
performed (to the extent required to be performed on or
before the date hereof or each such effective date);
(c) no Default or Event of Default has occurred
and is continuing on the date hereof, nor will any thereof
occur after giving effect to the Revolving Credit Loan(s)
requested above; and
(d) no event, act, or condition having or causing
a Material Adverse Effect has occurred since the Effective
Date.
SHOWBIZ PIZZA TIME, INC.
By:____________________
Title:_________________
EXHIBIT C
OPINION OF COUNSEL TO THE COMPANY
----------------------------------
The following opinions are to be provided by counsel for the
Company, subject to customary assumptions, limitations and
qualifications. Opinions should be allocated between inside and
outside counsel as is customary. All capitalized terms used herein
without definition shall have the meanings ascribed thereto in the
Loan Agreement.
1. The Company is a corporation duly organized and
validly existing under the laws of the State of Kansas and
has all requisite power and authority to own or hold under
lease the property it purports to own or hold under lease, to
carry on its business as now being conducted and to execute
and deliver the Loan Agreement and the other Loan Documents
and to perform the provisions thereof. The Company has duly
qualified and is authorized to do business in each
jurisdiction where such qualification and authorization is
necessary, except where the failure to so qualify could not
reasonably be expected to have a Material Adverse Effect.
2. The Loan Agreement and the other Loan Documents
have been duly authorized, executed and delivered by the
Company and constitute legal, valid and binding agreements of
the Company, enforceable against the Company in accordance
with their terms.
3. The Revolving Credit Note issued to you today
pursuant to the Loan Agreement has been duly authorized,
executed and delivered by the Company and constitutes a
legal, valid and binding obligations of the Company,
enforceable against the Company in accordance with its terms.
4. No consent, approval or authorization of, or
declaration, registration or filing with, any Governmental
Authority is required to be obtained or made as a condition
to the validity of the execution and delivery by the Company
of the Loan Agreement or the other Loan Documents.
5. Each Subsidiary is a corporation [or other
legal entity] duly organized, validly existing and in good
standing under the laws of the jurisdiction of its
incorporation or organization and is duly qualified as a
foreign corporation or other legal entity and is in good
standing in each jurisdiction in which such qualification is
required by law, except where the failure to be so qualified
could not, individually or in the aggregate, have a Material
Adverse Effect. Each Subsidiary has all requisite power and
authority to own or hold under lease the property it purports
to own or hold under lease and to transact the business it
transacts.
6. Neither the Company nor any Subsidiary is
subject to regulation under the Investment Company Act of
1940, as amended, the Public Utility Holding Company Act of
1935, as amended, or the Federal Power Act, as amended.
7. None of the transactions contemplated by the
Loan Agreement and the other Loan Documents (including
without limitation the use of the proceeds of the Revolving
Credit Notes) will violate or result in a violation of
Section 7 of the Exchange Act, or any regulations issued
pursuant thereto, including without limitation Regulations G,
T, U and X of the Board of Governors of the Federal Reserve
System (12 C.F.R., Part 207, part 220, Part 221 and Part 224,
respectively).
8. There are no actions, suits or proceedings
pending, or to our knowledge threatened, against or affecting
the Company or any Subsidiary or any property of the Company
or any Subsidiary in any court or before any arbitrator of
any kind or before or by any Governmental Authority, except
actions, suits or proceedings which (a) individually do not
in any manner draw into question the validity of the Loan
Agreement or the other Loan Documents and (b) in the
aggregate could not reasonably be expected to have a Material
Adverse Effect.
9. A Texas court would give effect to Section 10.3
of the Loan Agreement and the governing law provisions of the
Revolving Credit Note issued to you today.
* * * *
This opinion is given solely for your benefit, and for the
benefit of any participants having an interest in the Revolving
Credit Note issued to you today or in any Letter of Credit issued
by you pursuant to the terms of the Loan Agreement, and may not be
relied upon by any other person for any purpose without our prior
written consent.
EXHIBIT D
FORM OF LETTER OF CREDIT APPLICATION
SCHEDULE 4.3
Disclosure Documents
Form 10K Annual Report for Fiscal year ended December 30,
1994
Form 10Q Quarterly Report for quarterly period ended March
31, 1995
Form 8K Current Report for May 5, 1995
Proxy
Statement Notice of Annual Meeting of Shareholders to be held
June 8, 1995
Proxy
Supplement Supplemental Information for Annual Meeting of
Shareholders to be held on June 8, 1995
SCHEDULE 4.4
Subsidiaries
BHC Acquisition Corporation
State of Incorporation: Texas
Shares/Equity Owned by Company: 100%
Directors:
Richard M. Frank
Michael H. Magusiak
Richard T. Huston
Officers:
Richard M. Frank CEO, President, COO
Alice Winters Vice President, Secretary
Michael H. Magusiak Vice President,
Controller, Treasurer
Odom Sherman Assistant Treasurer
Richard T. Huston Vice President
Gene Cramm Vice President
ShowBiz of Laurel, Inc.
State of Incorporation: Maryland
Shares/Equity Owned by Company: 73%
Directors:
Vivian K. Oram
Gene Cramm
Carol E. Neal
Officers:
Vivian K. Oram President, Treasurer
Gene Cramm Secretary, Vice President
Carol Elkins Neal Assistant Secretary
Chuck E. Cheese of Waldorf, Inc.
State of Incorporation: Maryland
Shares/Equity Owned by Company: 100%
Directors:
Richard M. Frank
Michael H. Magusiak
Lorie Martinsen
Officers:
Lorie Martinsen President
Alice Winters Secretary, Treasurer
Sandra Schiranko Vice President
Chuck E. Cheese of Gaithersburg, Inc.
State of Incorporation: Maryland
Shares/Equity Owned by Company: 80%
Directors:
Lois Perry
Lorie Martinsen
Leslie Cherkis
Officers:
Lois Perry President
Lorie Martinsen Secretary/Treasurer
Leslie Cherkis Vice President
Chuck E. Cheese of Glen Burnie, Inc.
State of Incorporation: Maryland
Shares/Equity Owned by Company: 97%
Directors:
Richard M. Frank
Michael H. Magusiak
Alice M. Winters
Officers:
Alice M. Winters President
Lorie Martinsen Vice President,
Secretary, Treasurer
Ruth Ann Raup Assistant Secretary
ShowBiz of Madison, Inc.
State of Incorporation: Wisconsin
Shares/Equity Owned by Company: 100%
Directors:
Richard M. Frank
Officers:
Richard M. Frank President
Alice Winters Vice President, Secretary
Michael H. Magusiak Treasurer
Chuck E. Cheese of Diamond Point, Inc.
State of Incorporation: Maryland
Shares/Equity Owned by Company: 97%
Directors:
Richard M. Frank
Michael H. Magusiak
Alice Winters
Officers:
Alice Winters President
Karessa Rollwage Secretary, Treasure
Chuck E. Cheese of Westview, Inc.
State of Incorporation: Maryland
Shares/Equity Owned by Company: 98%
Directors:
Lorie Martinsen
Richard M. Frank
Michael H. Magusiak
Officers:
Lorie Martinsen President
Alice Winters Secretary, Treasurer
Hospitality Distribution Incorporated
State of Incorporation: Texas
Shares/Equity Owned by Company: 0%
Shares/Equity Indirectly Owned by Company: 100%
Directors:
Michael H. Magusiak
Richard M. Frank
Lorie Martinsen
Officers:
Richard M. Frank President
Lorie Martinsen Secretary
Michael H. Magusiak Vice President, Treasurer
Odom Sherman, Jr. Assistant Treasurer
Chuck E. Cheese of Silver Springs, Inc.
State of Incorporation: Maryland
Shares/Equity Owned by Company: 0%
Shares/Equity Indirectly Owned by Company: 80%
Directors:
Richard T. Huston
Alice Winters
Susan Velasquez
Officers:
Richard T. Huston President
Alice Winters Secretary, Treasurer
Susan Velasquez Vice President
ShowBiz of La Crosse, Inc.
State of Incorporation: Wisconsin
Shares/Equity Owned by Company: 100%
Directors:
Richard M. Frank
Officers:
Richard M. Frank President
Alice Winters Vice President, Secretary
Michael H. Magusiak Treasurer
ShowBiz of Ashwaubenon, Inc.
State of Incorporation: Wisconsin
Shares/Equity Owned by Company: 100%
Directors:
Richard M. Frank
Officers:
Richard M. Frank President
Alice Winters Vice President, Secretary
Michael H. Magusiak Treasurer
SB Hospitality Corporation
State of Incorporation: Texas
Shares/Equity Owned by Company: 100%
Directors:
Richard T. Huston
Alice Winters
Odom Sherman, Jr.
Officers:
Richard T. Huston President
Alice Winters Secretary, Vice President
Odom Sherman, Jr. Treasurer
ShowBiz of Arkansas, Inc.
State of Incorporation: Arkansas
Shares/Equity Owned by Company: 50%
Directors:
Richard M. Frank
Officers:
Richard M. Frank President
Alice Winters Vice President, Secretary
Michael H. Magusiak Treasurer
Odom Sherman Assistant Treasurer
Affiliates
International Association of ShowBiz Pizza Time Restaurants, Inc.
State of Incorporation: Texas
Shares/Equity Owned by Company: Non-Profit
Directors:
Jim Rudolph
R.C. Schmidt
Bryon Schlosser
Michael H. Magusiak
Michael A. Hilton
Ronald Hake
Officers:
Michael A. Hilton President
Michael Magusiak Secretary, Treasurer
R.C. Schmidt Vice President
B - SB Joint Venture Agreement
An Oklahoma joint venture including Harold W. Burlingame, Barbara
Jean Burlingame and ShowBiz Pizza Time, Inc.
Shares/Equity Owned by Company: 50%
MCBIZ/SHOWBIZ Joint Venture Agreement
A Kansas joint venture including MCBIZ Limited Partnership, a
Kansas limited partnership and ShowBiz Pizza Time, Inc.
Shares/Equity Owned by Company: 51%
Mid-South Joint Venture Agreement
A South Carolina joint venture including Mid-South Food
Management, Inc., a South Carolina corporation and ShowBiz Pizza
Time, Inc.
Shares/Equity Owned by Company: 30%.
ShowBiz White Settlement Club, Inc.
State of Incorporation: Texas
Shares/Equity Owned by Company: Non-Profit
Directors:
Richard T. Huston
Alice M. Winters
John E. Artope
Officers:
Richard T. Huston President
Alice Winters Secretary, Treasurer
John E. Artope Vice President
ShowBiz Richardson Club, Inc.
State of Incorporation: Texas
Shares/Equity Owned by Company: Non-Profit
Directors:
Richard T. Huston
Alice M. Winters
John E. Artope
Officers:
Richard T. Huston President
Alice Winters Secretary, Treasurer
John E. Artope Vice President
ShowBiz Redbird Club, Inc.
State of Incorporation: Texas
Shares/Equity Owned by Company: Non-Profit
Directors:
Richard T. Huston
Alice M. Winters
John E. Artope
Officers:
Richard T. Huston President
Alice Winters Secretary, Treasurer
John E. Artope Vice President
ShowBiz Montfort Club, Inc.
State of Incorporation: Texas
Shares/Equity Owned by Company: Non-Profit
Directors:
Richard T. Huston
Alice M. Winters
John E. Artope
Officers:
Richard T. Huston President
Alice Winters Secretary, Treasurer
John E. Artope Vice President
2500 South Coulter Street Club
State of Incorporation: Texas
Shares/Equity Owned by Company: Non-Profit
Directors:
Richard T. Huston
Alice M. Winters
John E. Artope
Officers:
Richard T. Huston President
Alice Winters Secretary, Treasurer
John E. Artope Vice President
2402 South Stemmons Freeway Club
State of Incorporation: Texas
Shares/Equity Owned by Company: Non-Profit
Directors:
Richard T. Huston
Alice M. Winters
John E. Artope
Officers:
Richard T. Huston President
Alice Winters Secretary, Treasurer
SCHEDULE 4.5
Financial Statements
10K Annual Report for Fiscal year ended December 28, 1990.
10K Annual Report for Fiscal year ended December 27, 1991.
10K Annual Report for Fiscal year ended January 1, 1993.
10K Annual Report for Fiscal year ended December 31, 1993.
10K Annual Report for Fiscal year ended December 30, 1994.
10Q Quarterly Report for quarterly period ended March 31,
1995.
SCHEDULE 4.8
Litigation
-----------
None.
SCHEDULE 4.11
Licenses, Etc.
--------------
None, except the following trademark filings in Brazil made by
third parties:
.CHICO CHEESES PIZZA, Brazilian Trademark, Registration No.
817043209 in Class 28.10 ("games, toys and pastimes")
.CHICO CHEESES PIZZA, Brazilian Trademark, Registration No.
817043217 in Class 32.10 ("doughs, pastries in general")
SCHEDULE 4.15
Existing Indebtedness
Liens on personal property securing Standby Letters of Credit
Nos. 50060624 and 50072426 issued by the Bank of Boston in the
respective face amounts of $58,600 and $1,500,000.
$29,200,000 owed to the Bank of Boston as of March 31, 1995,
excluding the Letters of Credit, paid off from the proceeds under
the Note Purchase Agreement, dated June 15, 1995.
On June 15, 1995, the Company issued Series A Senior Notes and
Series B Senior Notes, totaling $28,000,000.
Other existing indebtedness on the date of closing which would be
permitted under Section 8.1 (a) of the Loan Agreement, consisting
of capital lease obligations totaling $1,193,915 and other
indebtedness that does not exceed in the aggregate $500,000.
The Company has guaranteed certain obligations related to
restaurant building and equipment leases. The underlying assets
are collateral for the leases and the makers or assignees of all
of the obligations are required to perform thereunder before the
Company is required to fulfill its guarantee. In the event of
default by the maker or assignee, the Company, in almost all
cases, may make payment under the guarantees in accordance with
the original payment schedule and has the right to locate
potential buyers or subtenants for the assets. As of March 31,
1995, such guarantees aggregated approximately $989,000.
The Company has a limited recourse guaranty of Monterey
Acquisition Corp.'s obligation to repay a $4,700,000 term loan to
Greyhound Financial Corporation. This guaranty is limited in
recourse to the Company's pledge of its interest in 143,250
shares of common stock of Monterey Acquisition Corp. valued at
$437,500 in the aggregate.
SCHEDULE 8.1
Liens
Liens on personal property securing Standby Letters of Credit
Nos. 50060624 and 50072426 issued by the Bank of Boston in the
respective face amounts of $58,600 and $1,500,000.
Other existing indebtedness on the date of closing which would be
permitted under Section 8.1 (a) of the Loan Agreement, consisting
of capital lease obligations totaling $1,193,915 and other
indebtedness that does not exceed in the aggregate $500,000.
The Company has guaranteed certain obligations related to
restaurant building and equipment leases. The underlying assets
are collateral for the leases and the makers or assignees of all
of the obligations are required to perform thereunder before the
Company is required to fulfill its guarantee. In the event of
default by the maker or assignee, the Company, in almost all
cases, may make payment under the guarantees in accordance with
the original payment schedule and has the right to locate
potential buyers or subtenants for the assets. As of March 31,
1995, such guarantees aggregated approximately $989,000.
EXHIBIT 10(h)(2) - Revolving Credit Note
REVOLVING CREDIT NOTE
$5,000,000 Dallas, Texas
June 27, 1995
FOR VALUE RECEIVED, the undersigned, SHOWBIZ PIZZA TIME,
INC., a Kansas corporation ("Company"), hereby unconditionally
promises to pay to the order of BANK ONE, TEXAS, N.A. ("Bank
One") at the office of Bank One or any successor, currently
located at 1717 Main Street, Dallas, Texas 75201, on June 27,
1997 (or on any annual anniversary thereof agreed to in writing
by Bank One and the Company), in lawful money of the United
States of America and immediately available funds, an amount
equal to the lesser of (a) FIVE MILLION DOLLARS ($5,000,000), and
(b) the aggregate unpaid principal amount of all Revolving Credit
Loans made by Bank One to the company pursuant to Section 2.1 of
the Loan Agreement, dated as of June 27, 1995, between Bank One
and the Company (as amended, modified or supplemented from time
to time in accordance with its terms, the "Loan Agreement").
The Company further promises to pay interest (computed on
the basis of a 360-day year for the actual days elapsed) in like
money on the unpaid principal balance of this Note from time to
time outstanding at the annual rates provided in the Loan
Agreement. Interest shall be payable at the times and in the
manner provided in the Loan Agreement.
All Revolving Credit Loans made by Bank One pursuant to
Section 2.1 of the Loan Agreement and all payments of the
principal thereof shall be endorsed by the holder of this Note on
the schedule annexed hereto (including any additional pages such
holder may add to such schedule), which endorsement shall
constitute prima facie evidence of the accuracy of the
information so endorsed; provided, however, that the failure of
the holder of this Note to insert any date or amount or other
information on such schedule shall not in any manner affect the
obligation of the company to repay any Revolving Credit Loans in
accordance with the terms of the Loan Agreement.
On and after the stated or any accelerated maturity hereof,
this Note shall bear interest until paid in full (whether before
or after the occurrence of any event of Default described in
Sections 9.1(g) and 9.1(h) of the Loan Agreement) at a rate of
2.50% per annum in excess of the Prime Rate, payable on demand,
but in no event in excess of the maximum rate of interest
permitted under applicable law. Such interest rate shall change
when and as the Prime Rate changes.
This Note is a Revolving Credit Note referred to in the Loan
Agreement, is entitled to the benefits thereof and is subject to
optional and mandatory prepayment, in whole or in part, as
provided therein. Reference is herein made to the Loan Agreement
for the rights of the holder to accelerate the unpaid balance
hereof prior to maturity.
The Company hereby waives diligence, demand, presentment,
protest and notice of any kind, release, surrender or
substitution of security, or forbearance or other indulgence,
without notice.
This Note and all of the other Loan Documents are intended
to be performed in accordance with, and only to the extent
permitted by, all applicable usury laws. If any provision hereof
or of any of the other Loan Documents or the application thereof
to any person or circumstance shall, for any reason and to any
extent, be invalid or unenforceable, neither the application of
such provision to any other person or circumstance nor the
remainder of the instrument in which such provision is contained
shall be affected thereby and shall be enforced to the greatest
extent permitted by law. It is expressly stipulated and agreed
to be the intent of Bank One at all times to comply with the
usury and other applicable laws now or hereafter governing the
interest payable on the Indebtedness evidenced by this Note. If
the applicable law is ever revised, repealed or interpreted so as
to render usurious any amount called for under this Note or any
of the other Loan Documents, or contracted for, charged, taken,
reserved or received with respect to the Indebtedness evidenced
by this Note, or if Bank One's exercise of the option to
accelerate the maturity of this Note, or if any prepayment by the
Company results in the Borrower's having paid any interest in
excess of that permitted by law, then it is the express intent of
the company and Bank One that all excess amounts theretofore
collected by Bank One be credited on the principal balance of
this Note (or, if this Note and all other Indebtedness arising
under or pursuant to the other Loan Documents have been paid in
full, refunded to the Company), and the provisions of this Note
and the other Loan Documents immediately be deemed reformed and
the amounts thereafter collectable hereunder and thereunder
reduced, without the necessity of the execution of any new
document, so as to comply with the then applicable law, but so as
to permit the recovery of the fullest amount otherwise called for
hereunder or thereunder. All sums paid, or agreed to be paid, by
the Company for the use, forbearance, detention, taking,
charging, receiving or reserving of the Indebtedness of the
company to Bank One under this Note or arising under of pursuant
to the other Loan Documents shall, to the maximum extent
permitted by applicable law, be amortized, prorated, allocated
and spread throughout the full term of such Indebtedness until
payment in full so that the rate or amount of interest on account
of such Indebtedness does not exceed the usury ceiling from time
to time in effect and applicable to such Indebtedness for so long
as such Indebtedness is outstanding. To the extent federal law
permits Bank One to contract for, charge, or receive a greater
amount of interest, Bank One will rely upon federal law instead
of TEX. REV. CIV. STAT. ANN. Article 5069-1.04, as amended, for
the purpose of determining the maximum rate or amount.
Additionally, to the maximum extent permitted by applicable law
now or hereafter in effect, Bank One may, at is option and from
time to time, implement any other method of computing the maximum
rate under such Article 5069-1.04, as amended, or under other
applicable law by giving notice, if required to the Company as
provided by applicable law now or hereafter in effect.
Notwithstanding anything to the contrary contained herein or in
any of the other Loan Documents, it is not the intention of Bank
One to accelerate the maturity of any interest that has not
accrued at the time of such acceleration or to collect unearned
interest at the time of such acceleration.
Capitalized terms used herein and not otherwise defined
shall have the meaning ascribed to them in the Loan Agreement.
This Note may not be changed, modified, or terminated
orally, but only by an agreement in writing signed by the party
to be charged.
IN THE EVENT OF ANY LITIGATION WITH RESPECT TO THIS
REVOLVING CREDIT NOTE, COMPANY WAIVES (TO THE EXTENT PERMITTED BY
LAW) THE RIGHT TO A TRIAL BY JURY. ALL RIGHTS OF SETOFF AND
RIGHTS TO INTERPOSE COUNTERCLAIMS AND CROSS-CLAIMS (UNLESS SUCH
SETOFF, COUNTERCLAIM OR CROSS-CLAIM COULD NOT, BY REASON OF ANY
APPLICABLE FEDERAL OR STATE PROCEDURAL LAWS, BE INTERPOSED,
PLEADED OR ALLEGED IN ANY OTHER ACTION) AND THE DEFENSES OF FORUM
NON CONVENIENS AND IMPROPER VENUE. COMPANY HEREBY IRREVOCABLY
CONSENTS TO THE NON-EXCLUSIVE JURISDICTION OF THE COURTS OF THE
STATE OF TEXAS AND OF ANY FEDERAL COURT LOCATED IN THE DALLAS,
TEXAS, IN CONNECTION WITH ANY ACTION OR PROCEEDING ARISING OUT OF
OR RELATING TO THIS REVOLVING CREDIT NOTE. THIS NOTE SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF TEXAS WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW
AND SHALL BE BINDING UPON THE SUCCESSORS AND ASSIGNS OF COMPANY
AND INURE TO THE BENEFIT OF BANK ONE AND ITS SUCCESSORS AND
ASSIGNS. If any term or provision of this Revolving Credit Note
shall be held invalid, illegal or unenforceable, the validity of
all other terms and provisions herein shall in no way be affected
thereby.
IN WITNESS WHEREOF, the Company has executed and delivered
this Note on the date first above written.
SHOWBIZ PIZZA TIME, INC.
By:Larry G. Page
Title:Chief Financial
Officer
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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FINANCIAL DATA SCHEDULE
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<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-29-1995
<PERIOD-END> JUN-30-1995
<CASH> 4,733
<SECURITIES> 0
<RECEIVABLES> 3,777
<ALLOWANCES> 420
<INVENTORY> 3,274
<CURRENT-ASSETS> 15,897
<PP&E> 215,552
<DEPRECIATION> 84,144
<TOTAL-ASSETS> 192,716
<CURRENT-LIABILITIES> 29,615
<BONDS> 29,102
<COMMON> 1,429
1,953
0
<OTHER-SE> 125,922
<TOTAL-LIABILITY-AND-EQUITY> 192,716
<SALES> 133,051
<TOTAL-REVENUES> 134,958
<CGS> 70,954
<TOTAL-COSTS> 131,638
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,453
<INCOME-PRETAX> 2,303
<INCOME-TAX> 918
<INCOME-CONTINUING> 1,385
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,385
<EPS-PRIMARY> .10
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