Indenture - NE Restaurant Co. Inc. and United States Trust Co. of New York
EXECUTION COPY
NE RESTAURANT COMPANY, INC.
AND
UNITED STATES TRUST COMPANY OF NEW YORK,
as Trustee
10 3/4% Senior Notes due 2008
INDENTURE
Dated as of July 20, 1998
TABLE OF CONTENTS
Page
ARTICLE I
Definitions and Incorporation by Reference....................................1
SECTION 1.1. Definitions.....................................................1
SECTION 1.2. Other Definitions..............................................17
SECTION 1.3. Incorporation by Reference of Trust Indenture Act..............18
SECTION 1.4. Rules of Construction..........................................19
ARTICLE II
The Securities...............................................................19
SECTION 2.1. Form, Dating and Terms.........................................19
SECTION 2.2. Execution and Authentication...................................26
SECTION 2.3. Registrar and Paying Agent.....................................27
SECTION 2.4. Paying Agent To Hold Money in Trust............................28
SECTION 2.5. Securityholder Lists...........................................28
SECTION 2.6. Transfer and Exchange..........................................28
SECTION 2.7. Form of Certificate to be Delivered in Connection with
Transfers to Institutional Accredited Investors................32
SECTION 2.8. Form of Certificate to be Delivered in Connection with
Transfers Pursuant to Regulation S.............................33
SECTION 2.9. Mutilated, Destroyed, Lost or Stolen Securities................34
SECTION 2.10. Outstanding Securities.........................................35
SECTION 2.11. Temporary Securities...........................................36
SECTION 2.12. Cancellation...................................................36
SECTION 2.13. Payment of Interest; Defaulted Interest........................36
<PAGE>
SECTION 2.14. Computation of Interest........................................37
SECTION 2.15. CUSIP Numbers..................................................37
ARTICLE III
Covenants....................................................................38
SECTION 3.1. Payment of Securities..........................................38
SECTION 3.2. SEC Reports and Available Information..........................38
SECTION 3.3. Limitation on Indebtedness.....................................39
SECTION 3.4. Limitation on Restricted Payments..............................40
SECTION 3.5. Limitation on Restrictions on Distributions from Restricted
Subsidiaries...................................................42
SECTION 3.6. Limitation on Sales of Assets and Subsidiary Stock.............43
SECTION 3.7. Limitation on Sale/Leaseback Transactions......................44
SECTION 3.8. Limitation on Affiliate Transactions...........................45
SECTION 3.9. Change of Control..............................................45
SECTION 3.10. Limitation on Dispositions of Capital Stock of Restricted
Subsidiaries...................................................48
SECTION 3.11. Limitation on Liens............................................48
SECTION 3.12. Future Subsidiary Guarantors...................................48
SECTION 3.13. Maintenance of Office or Agency................................49
SECTION 3.14. Corporate Existence............................................49
SECTION 3.15. Payment of Taxes and Other Claims..............................49
SECTION 3.16. Compliance Certificate.........................................50
SECTION 3.17. Further Instruments and Acts...................................50
ARTICLE IV
Successor Company ...........................................................50
SECTION 4.1. Merger and Consolidation.......................................50
ARTICLE V
Redemption of Securities.....................................................51
SECTION 5.1. Optional Redemption............................................51
SECTION 5.2. Escrow Account; Special Mandatory Redemption...................51
SECTION 5.3. Applicability of Article.......................................53
SECTION 5.4. Election to Redeem; Notice to Trustee..........................53
SECTION 5.5. Selection by Trustee of Securities to Be Redeemed..............53
SECTION 5.6. Notice of Redemption...........................................54
SECTION 5.7. Deposit of Redemption Price....................................55
SECTION 5.8. Securities Payable on Redemption Date..........................55
SECTION 5.9. Securities Redeemed in Part....................................55
SECTION 5.10. Offer to Purchase by Application of Excess Proceeds............56
ARTICLE VI
Defaults and Remedies........................................................58
SECTION 6.1. Events of Default..............................................58
SECTION 6.2. Acceleration...................................................60
SECTION 6.3. Other Remedies.................................................60
SECTION 6.4. Waiver of Past Defaults........................................60
SECTION 6.5. Control by Majority............................................61
<PAGE>
SECTION 6.6. Limitation on Suits............................................61
SECTION 6.7. Rights of Holders to Receive Payment...........................61
SECTION 6.8. Collection Suit by Trustee.....................................61
SECTION 6.9. Trustee May File Proofs of Claim...............................61
SECTION 6.10. Priorities.....................................................62
SECTION 6.11. Undertaking for Costs..........................................62
ARTICLE VII
Trustee......................................................................62
SECTION 7.1. Duties of Trustee..............................................62
SECTION 7.2. Rights of Trustee..............................................64
SECTION 7.3. Individual Rights of Trustee...................................65
SECTION 7.4. Trustee's Disclaimer...........................................65
SECTION 7.5. Notice of Defaults.............................................65
SECTION 7.6. Reports by Trustee to Holders..................................65
SECTION 7.7. Compensation and Indemnity.....................................66
SECTION 7.8. Replacement of Trustee.........................................66
SECTION 7.9. Successor Trustee by Merger....................................67
SECTION 7.10. Eligibility; Disqualification..................................68
SECTION 7.11. Preferential Collection of Claims Against Company..............68
ARTICLE VIII
Discharge of Indenture; Defeasance...........................................68
SECTION 8.1. Discharge of Liability on Securities; Defeasance...............68
SECTION 8.2. Conditions to Defeasance.......................................69
SECTION 8.3. Application of Trust Money.....................................70
SECTION 8.4. Repayment to Company...........................................70
SECTION 8.5. Indemnity for U.S. Government Obligations......................71
SECTION 8.6. Reinstatement..................................................71
ARTICLE IX
Amendments...................................................................71
SECTION 9.1. Without Consent of Holders.....................................71
SECTION 9.2. With Consent of Holders........................................72
SECTION 9.3. Compliance with Trust Indenture Act............................73
SECTION 9.4. Revocation and Effect of Consents and Waivers..................73
SECTION 9.5. Notation on or Exchange of Securities..........................73
SECTION 9.6. Trustee To Sign Amendments.....................................73
ARTICLE X
Guarantee....................................................................74
SECTION 10.1. Guarantee.....................................................74
SECTION 10.2. Limitation on Liability; Termination, Release and Discharge...75
SECTION 10.3. Right of Contribution.........................................76
SECTION 10.4. No Subrogation................................................76
SECTION 10.5. Execution and Delivery of Subsidiary Guarantee................76
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ARTICLE XI
Miscellaneous................................................................77
SECTION 11.1. Trust Indenture Act Controls..................................77
SECTION 11.2. Notices.......................................................77
SECTION 11.3. Communication by Holders with other Holders...................78
SECTION 11.4. Certificate and Opinion as to Conditions Precedent............78
SECTION 11.5. Statements Required in Certificate or Opinion.................78
SECTION 11.6. When Securities Disregarded...................................79
SECTION 11.7. Rules by Trustee, Paying Agent and Registrar..................79
SECTION 11.8. Legal Holidays................................................79
SECTION 11.9. GOVERNING LAW.................................................79
SECTION 11.10. No Recourse Against Others....................................79
SECTION 11.11. Successors....................................................80
SECTION 11.12. Multiple Originals............................................80
SECTION 11.13. Variable Provisions...........................................80
SECTION 11.14. Qualification of Indenture....................................80
SECTION 11.15. Table of Contents; Headings...................................80
EXHIBIT A Form of the Initial Security
EXHIBIT B Form of the Exchange Security
EXHIBIT C Form of Supplemental Indenture
EXHIBIT D Form of Notation of Subsidiary Guarantee
CROSS-REFERENCE TABLE
TIA Indenture
Section Section
310(a)(1) ................................... 7.10
(a)(2) ................................... 7.10
(a)(3) ................................... N.A.
(a)(4) ................................... N.A.
(a)(5) ................................... 7.10
(b) ................................... 7.8; 7.10
(c) ................................... N.A.
311(a) ................................... 7.11
(b) ................................... 7.11
(c) ................................... N.A.
312(a) ................................... 2.5
(b) ................................... 11.3
(c) ................................... 11.3
313(a) ................................... 7.6
(b)(2) ................................... 7.6
(c) ................................... 7.6
(d) ................................... 7.6
314(a) ................................... 3.2; 11.2
(b) ................................... N.A.
(c)(1) ................................... 11.4
(c)(2) ................................... 11.4
(c)(3) ................................... N.A.
(d) ................................... N.A.
(e) ................................... 11.5
315(a) ................................... 7.1
(b) ................................... 7.5; 11.2
(c) ................................... 7.1
<PAGE>
(d) ................................... 7.1
(e) ................................... 6.11
316(a)(last sentence) ................................... 11.6
(a)(1)(A) ................................... 6.5
(a)(1)(B) ................................... 6.4
(a)(2) ................................... N.A.
(b) ................................... 6.7
317(a)(1) ................................... 6.8
(a)(2) ................................... 6.9
(b) ................................... 2.4
318(a) ................................... 11.1
N.A. means Not Applicable.
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
part of the Indenture.
INDENTURE dated as of July 20, 1998, among NE RESTAURANT COMPANY,
INC., a Delaware corporation (the "COMPANY"), and United States Trust Company of
New York, as Trustee (the "TRUSTEE").
Each party agrees as follows for the benefit of the other parties and
for the equal and ratable benefit of the Holders of the Company's 10 3/4% Senior
Notes due 2008 (the "INITIAL SECURITIES") and, if and when issued in exchange
for Initial Securities as provided in the Registration Rights Agreement (as
hereinafter defined), the Company's 10 3/4% Senior Notes due 2008 (the "EXCHANGE
SECURITIES" and, together with the Initial Securities, the "SECURITIES"):
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1. DEFINITIONS.
"Acquisition" means the acquisition by the Company of at least 90% of
the outstanding shares of common stock (including shares currently owned by the
Company and determined on a fully diluted basis) of Bertucci's, Inc. and the
subsequent merger of NERC Acquisition Corp., a wholly owned subsidiary of the
Company, with Bertucci's, Inc.
"Additional Assets" means (i) any property or assets (other than
Indebtedness and Capital Stock) to be used by the Company or a Restricted
Subsidiary in a Related Business; (ii) the Capital Stock of a Person that
becomes a Restricted Subsidiary as a result of the acquisition of such Capital
Stock by the Company or a Restricted Subsidiary of the Company; or (iii) Capital
Stock constituting a minority interest in any Person that at such time is a
Restricted Subsidiary of the Company; PROVIDED, HOWEVER, that, in the case of
clauses (ii) and (iii), such Restricted Subsidiary is primarily engaged in a
Related Business.
"Affiliate" of any specified Person means any other Person, directly
or indirectly, controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
<PAGE>
"Asset Disposition" means any sale, lease, transfer, issuance or other
disposition (or series of related sales, leases, transfers, issuances or
dispositions that are part of a common plan) of shares of Capital Stock of a
Restricted Subsidiary (other than directors' qualifying shares or shares
required to be held by Persons other than the Company or a Restricted Subsidiary
in connection with the maintenance of liquor licenses), property or other assets
(each referred to for the purposes of this definition as a "disposition") by the
Company or any of its Restricted Subsidiaries (including any disposition by
means of a merger, consolidation or similar transaction) other than (i) a
disposition by a Restricted Subsidiary to the Company or by the Company or a
Restricted Subsidiary to a Wholly-Owned Subsidiary, (ii) the sale of Cash
Equivalents in the ordinary course of business, (iii) a disposition of inventory
in the ordinary course of business, (iv) a disposition of obsolete or worn out
equipment or equipment that is no longer useful in the conduct of the business
of the Company and its Restricted Subsidiaries and that is disposed of in each
case in the ordinary course of business (including, without limitation, any real
property interests, equipment or other tangible property disposed of in
connection with the relocation or closing of a restaurant), (v) transactions
permitted under SECTION 4.1 of this Indenture, (vi) for purposes of the covenant
regarding limitations on sales of assets and subsidiary stock contained in
SECTION 3.6 of this Indenture only, a disposition subject to the covenant
regarding limitations on restricted payments contained in SECTION 3.4 of this
Indenture and (vii) any pledge or collateral assignment of Capital Stock of any
Restricted Subsidiary that is permitted under SECTION 3.11 of this Indenture or
the exercise of any right or remedies by the holder of any such pledge or
assignment.
"Attributable Indebtedness" in respect of a Sale/Leaseback Transaction
means, as at the time of determination, the present value (discounted at the
interest rate borne by the Securities, compounded semi-annually) of the total
obligations of the lessee for rental payments during the remaining term of the
lease included in such Sale/Leaseback Transaction (including any period for
which such lease has been extended).
"Average Life" means, as of the date of determination, with respect to
any Indebtedness or Preferred Stock, the quotient obtained by dividing (i) the
sum of the products of the numbers of years from the date of determination to
the dates of each successive scheduled principal payment of such Indebtedness or
redemption or similar payment with respect to such Preferred Stock multiplied by
the amount of such payment by (ii) the sum of all such payments.
"Board of Directors" means, as to any Person, the board of directors
of such Person or any duly authorized committee thereof.
"Business Day" means a day other than a Saturday, Sunday or other day
on which commercial banking institutions are authorized or required by law to
close in New York City.
"Capital Stock" of any Person means any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) equity of such Person, including any Preferred
Stock, partnership interests and limited liability company membership interests,
but excluding any debt securities convertible into such equity.
"Capitalized Lease Obligations" means an obligation that is required
to be classified and accounted for as a capitalized lease for financial
reporting purposes in accordance with GAAP, and the amount of Indebtedness
represented by such obligation will be the capitalized amount of such obligation
determined in accordance with GAAP, and the Stated Maturity thereof will be the
date of the last payment of rent or any other amount due under such lease prior
<PAGE>
to the first date such lease may be terminated without penalty.
"Cash Equivalents" means (i) securities issued or directly and fully
guaranteed or insured by the United States Government or any agency or
instrumentality thereof, having maturities of not more than one year from the
date of acquisition; (ii) marketable general obligations issued by any state of
the United States of America or any political subdivision of any such state or
any public instrumentality thereof maturing within one year from the date of
acquisition thereof and, at the time of acquisition thereof, having a credit
rating of "A" or better from either Standard & Poor's Rating Group or Moody's
Investors Service, Inc.; (iii) certificates of deposit, time deposits,
eurodollar time deposits, overnight bank deposits or bankers' acceptances having
maturities of not more than one year from the date of acquisition thereof issued
by any commercial bank the long-term debt of which is rated at the time of
acquisition thereof at least "A" or the equivalent thereof by Standard & Poor's
Rating Group, or "A" or the equivalent thereof by Moody's Investors Service,
Inc., and having capital and surplus in excess of $500 million; (iv) repurchase
obligations with a term of not more than seven days for underlying securities of
the types described in clauses (i), (ii) and (iii) entered into with any bank
meeting the qualifications specified in clause (iii) above; (v) commercial paper
rated at the time of acquisition thereof at least "A-2" or the equivalent
thereof by Standard & Poor's Rating Group or "P-2" or the equivalent thereof by
Moody's Investors Service, Inc., or carrying an equivalent rating by a
nationally recognized rating agency, if both of the two named rating agencies
cease publishing ratings of investments, and in either case maturing within 270
days after the date of acquisition thereof; and (vi) interests in any investment
company which invests solely in instruments of the type specified in clauses (i)
through (v) above.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" means NE Restaurant Company, Inc. or a successor.
"Consolidated EBITDA" for any period means the Consolidated Net Income
for such period, plus the following to the extent deducted in calculating such
Consolidated Net Income: (i) income tax expense, (ii) Consolidated Interest
Expense, (iii) depreciation expense, (iv) amortization of intangibles, (v) other
non-cash charges reducing Consolidated Net Income (excluding any such non-cash
charge to the extent it represents an accrual of or reserve for cash charges in
any future period or amortization of a prepaid cash expense that was paid in a
prior period not included in the calculation) and (vi) Deferred Rent.
Notwithstanding the foregoing, the provision for taxes based on the income or
profits of, and the interest, depreciation and amortization of, a Restricted
Subsidiary of a Person will be added to Consolidated Net Income to compute
Consolidated EBITDA of such Person only to the extent (and in the same
proportion) that the net income of such Subsidiary was included in calculating
the Consolidated Net Income of such Person.
"Consolidated Interest Expense" means, for any period, the total
interest expense of the Company and its consolidated Subsidiaries, plus, to the
extent not included in such interest expense, (i) interest expense attributable
to Capitalized Lease Obligations and the interest portion of rent expense
associated with Attributable Indebtedness in respect of the relevant lease
giving rise thereto, determined as if such lease were a capitalized lease in
accordance with GAAP, (ii) amortization of debt discount and debt issuance cost,
(iii) capitalized interest and accrued interest, (iv) non-cash interest expense,
(v) commissions, discounts and other fees and charges owed with respect to
letters of credit and bankers' acceptance financing, (vi) interest actually paid
by the Company or any such Subsidiary under any Guarantee of Indebtedness or
other obligation of any other Person, (vii) net costs associated with Interest
<PAGE>
Rate Agreements (including amortization of fees), (viii) dividends in respect of
all Disqualified Stock of the Company and all Preferred Stock of Subsidiaries,
in each case, held by Persons other than the Company or a Wholly Owned
Subsidiary and (ix) the cash contributions to any employee stock ownership plan
or similar trust to the extent such contributions are used by such plan or trust
to pay interest or fees to any Person (other than the Company) in connection
with Indebtedness Incurred by such plan or trust; PROVIDED, HOWEVER, that there
will be excluded therefrom any such interest expense of any Unrestricted
Subsidiary to the extent the related Indebtedness is not Guaranteed or paid by
the Company or any Restricted Subsidiary. For purposes of the foregoing, total
interest expense will be determined after giving effect to any net payments made
or received by the Company and its Subsidiaries with respect to Interest Rate
Agreements. Notwithstanding the foregoing, the Consolidated Interest Expense
with respect to any Restricted Subsidiary of the Company that was not a
Wholly-Owned Subsidiary will be included only to the extent (and in the same
proportion) that the net income of such Restricted Subsidiary was included in
calculating Consolidated Net Income.
"Consolidated Net Income" means, for any period, the net income (loss)
of the Company and its Consolidated Subsidiaries; PROVIDED, HOWEVER, that there
will be excluded in such Consolidated Net Income: (i) any net income (loss) of
any Person if such Person is not a Restricted Subsidiary, except that (A)
subject to the limitations contained in (iv) below, the Company's equity in the
net income of any such Person for such period will be included in such
Consolidated Net Income up to the aggregate amount of cash actually distributed
by such Person during such period to the Company or a Restricted Subsidiary as a
dividend or other distribution (subject, in the case of a dividend or other
distribution to a Restricted Subsidiary, to the limitations contained in clause
(iii) below) and (B) the Company's equity in a net loss of any such Person
(other than an Unrestricted Subsidiary) for such period will be included in
determining such Consolidated Net Income to the extent such loss has been funded
with cash from the Company or a Restricted Subsidiary; (ii) any net income
(loss) of any Person acquired by the Company or a Subsidiary in a pooling of
interests transaction for any period prior to the date of such acquisition;
(iii) any net income of any Restricted Subsidiary if such Subsidiary is subject
to restrictions, directly or indirectly, on the payment of dividends or the
making of distributions by such Restricted Subsidiary, directly or indirectly,
to the Company, except that (A) subject to the limitations contained in (iv)
below the Company's equity in the net income of any such Restricted Subsidiary
for such period will be included in such Consolidated Net Income up to the
aggregate amount of cash that could have been distributed by such Restricted
Subsidiary during such period to the Company or another Restricted Subsidiary as
a dividend (subject, in the case of a dividend to another Restricted Subsidiary,
to the limitation contained in this clause) and (B) the Company's equity in a
net loss of any such Restricted Subsidiary for such period will be included in
determining such Consolidated Net Income; (iv) any gain (loss) realized upon the
sale or other disposition of any property, plant or equipment of the Company or
its consolidated Subsidiaries (including pursuant to any Sale/Leaseback
Transaction) which is not sold or otherwise disposed of in the ordinary course
of business and any gain (loss) realized upon the sale or other disposition of
any Capital Stock of any Person; (v) any extraordinary gain or loss; and (vi)
the cumulative effect of a change in accounting principles.
"Default" means any event which, after notice or passage of time or
both, would be an Event of Default.
"Defaulted Interest" shall have the meaning set forth in SECTION 2.13.
"Depositary" means The Depository Trust Company, its nominees and
their respective successors and assigns, or such other depository institution
<PAGE>
hereinafter appointed by the Company.
"Deferred Rent" means the excess (deficit) of accrued rent calculated
in accordance with Statement of Financial Accounting Standards No. 13 and GAAP
as compared to amounts paid under operating lease arrangements, as set forth in
the Company's cash flow statements.
"Disqualified Stock" means, with respect to any Person, any Capital
Stock of such Person which by its terms (or by the terms of any security into
which it is convertible or for which it is exchangeable) or upon the happening
of any event (i) matures or is mandatorily redeemable pursuant to a sinking fund
obligation or otherwise, (ii) is convertible or exchangeable for Indebtedness or
Disqualified Stock (excluding Capital Stock which is convertible or exchangeable
solely at the option of the Company or a Restricted Subsidiary) or (iii) is
redeemable at the option of the holder thereof, in whole or in part, in each
case on or prior to the Stated Maturity of the Securities, PROVIDED, that only
the portion of Capital Stock which so matures or is mandatorily redeemable, is
so convertible or exchangeable or is so redeemable at the option of the holder
thereof prior to such Stated Maturity will be deemed to be Disqualified Stock.
"Equity Offering" means an offering for cash by the Company of its
common stock, or options, warrants or rights with respect to its common stock.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Securities" means, if and when issued in exchange for the
Initial Securities as provided in the Registration Rights Agreement, the
Company's 10 3/4% Senior Notes due 2008.
"Foreign Subsidiary" means any Restricted Subsidiary that is not
organized under the laws of the United States of America or any state thereof or
the District of Columbia.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect as of the date of this Indenture, including those
set forth in the opinions and pronouncements of the Accounting Principles Board
of the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as approved by a significant segment of the
accounting profession. All ratios and computations based on GAAP contained in
this Indenture will be computed in conformity with GAAP.
"Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness of any other Person
any obligation, direct or indirect, contingent or otherwise, of such Person (i)
to purchase or pay (or advance or supply funds for the purchase or payment of)
such Indebtedness of such other Person (whether arising by virtue of partnership
arrangements, or by agreement to keep-well, to purchase assets, goods,
securities or services, to take-or-pay, or to maintain financial statement
conditions or otherwise) or (ii) entered into for purposes of assuring in any
other manner the obligee of such Indebtedness of payment thereof or to protect
such obligee against loss in respect thereof (in whole or in part); PROVIDED,
HOWEVER, that the term "Guarantee" will not include endorsements for collection
or deposit and indemnities given by the Company or any of its Subsidiaries in
connection with exhibitions, in each case, in the ordinary course of business.
The term "Guarantee" used as a verb has a corresponding meaning.
"Holder" or "Securityholder" means the Person in whose name a Security
is registered in the Note Register.
<PAGE>
"Incur" means issue, assume, Guarantee, incur or otherwise become
liable for; PROVIDED, HOWEVER, that any Indebtedness or Capital Stock of a
Person existing at the time such Person becomes a Restricted Subsidiary (whether
by merger, consolidation, acquisition or otherwise) will be deemed to be
incurred by such Restricted Subsidiary at the time it becomes a Restricted
Subsidiary.
"Indebtedness" means, with respect to any Person on any date of
determination (without duplication), (i) the principal of and premium (if any)
in respect of indebtedness of such Person for borrowed money; (ii) the principal
of and premium (if any) in respect of obligations of such Person evidenced by
bonds, debentures, notes or other similar instruments; (iii) all obligations of
such Person in respect of letters of credit or other similar instruments
(including reimbursement obligations with respect thereto); (iv) all obligations
of such Person to pay the deferred and unpaid purchase price of property or
services (except trade payables), which purchase price is due more than six
months after the date of placing such property in service or taking delivery and
title thereto or the completion of such services (if and to the extent any such
obligation would appear as a liability upon a balance sheet of such Person
prepared in accordance with GAAP); (v) all Capitalized Lease Obligations and all
Attributable Indebtedness of such Person; (vi) the amount of all obligations of
such Person with respect to the redemption, repayment or other repurchase of any
Disqualified Stock or, with respect to any Subsidiary, any Preferred Stock (but
excluding, in each case, any accrued dividends); (vii) all Indebtedness of other
Persons secured by a Lien on any asset of such Person, whether or not such
Indebtedness is assumed by such Person; PROVIDED, HOWEVER, that the amount of
such Indebtedness will be the lesser of (A) the fair market value of such asset
at such date of determination and (B) the amount of such Indebtedness of such
other Persons; (viii) all Indebtedness of other Persons to the extent Guaranteed
by such Person; and (ix) to the extent not otherwise included in this
definition, net obligations of such Person under Interest Rate Agreements (the
amount of any such obligations to be equal at any time to the termination value
of such agreement or arrangement giving rise to such obligation that would be
payable by such Person at such time). The amount of Indebtedness of any Person
at any date will be the outstanding balance at such date of all unconditional
obligations as described above and the maximum liability, upon the occurrence of
the contingency giving rise to the obligation, of any contingent obligations at
such date; PROVIDED that the amount outstanding at any one time of any
Indebtedness issued with original issue discount is the principal amount of such
Indebtedness less the remaining unamortized portion of the original issue
discount of such Indebtedness at such time as determined in conformity with
GAAP. Notwithstanding the foregoing, Indebtedness shall exclude (i) obligations
created, issued or incurred by any Person with respect to customer subscription
payments or customer deposits for trade shows and exhibitions and (ii) any
indemnification obligation of the Company to third parties in respect of
customary representations and warranties contained in stock purchase, asset
purchase or similar acquisition agreements to which the Company is a party, if
such indemnification obligation would not appear as a liability upon a balance
sheet of the Company prepared in accordance with GAAP.
"Indenture" means this Indenture as amended or supplemented from time
to time.
"Initial Securities" means the Company's 10 3/4% Senior Notes due 2008
issued under this Indenture pursuant to Rule 144A or Regulation S under the
Securities Act. 2
"Interest Coverage Ratio" as of any date of determination means, with
respect to any Person, the ratio of (i) the aggregate amount of Consolidated
EBITDA of such Person for the period of the most recent four consecutive fiscal
<PAGE>
quarters ending prior to the date of such determination to (ii) Consolidated
Interest Expense of such Person for such period; PROVIDED, HOWEVER, that (1) if
since the beginning of such period the Company or any Restricted Subsidiary
shall have made any Asset Disposition or if the transaction giving rise to the
need to calculate the Interest Coverage Ratio is an Asset Disposition, the
Consolidated EBITDA for such period will be reduced by an amount equal to the
Consolidated EBITDA (if positive) directly attributable to the assets which are
the subject of such Asset Disposition for such period or increased by an amount
equal to the Consolidated EBITDA (if negative) directly attributable thereto for
such period, (2) if since the beginning of such period the Company or any
Restricted Subsidiary (by merger or otherwise) shall have made an Investment in
any Restricted Subsidiary (or any Person which becomes a Restricted Subsidiary
or is merged with or into the Company) or an acquisition of assets, including
any acquisition of assets occurring in connection with a transaction causing a
calculation to be made hereunder, which constitutes all or substantially all of
an operating unit of a business, Consolidated EBITDA for such period will be
calculated after giving pro forma effect thereto (including the Incurrence of
any Indebtedness and including the pro forma expenses and cost reductions
calculated in accordance with Regulation S-X promulgated by the SEC) as if such
Investment or acquisition occurred on the first day of such period and (3) if
since the beginning of such period any Person (that subsequently became a
Restricted Subsidiary or was merged with or into the Company or any Restricted
Subsidiary since the beginning of such period) will have made any Asset
Disposition or any Investment or acquisition of assets that would have required
an adjustment pursuant to clause (1) or (2) above if made by the Company or a
Restricted Subsidiary during such period, Consolidated EBITDA for such period
will be calculated after giving pro forma effect thereto (including the
Incurrence of any Indebtedness and including the pro forma expenses and cost
reductions calculated in accordance with Regulation S-X promulgated by the SEC)
as if such Asset Disposition or Investment occurred on the first day of such
period. For purposes of this definition, whenever pro forma effect is to be
given to an acquisition of assets, the amount of income or earnings relating
thereto, the pro forma calculations will be determined in good faith by a
responsible financial or accounting officer of the Company. Notwithstanding
anything herein to the contrary, if at the time the calculation of the Interest
Coverage Ratio is to be made, the Company does not have available consolidated
financial statements reflecting the consummation of the Transactions for a
period of at least four full fiscal quarters, all calculations required by the
Interest Coverage Ratio shall be prepared on a pro forma basis, as though each
of the Transactions (to the extent not otherwise reflected in the consolidated
financial statements of the Company) had occurred on the first day of the most
recently completed four fiscal quarters for which such calculation is being
made.
"Interest Rate Agreement" means with respect to any Person any
interest rate protection agreement, interest rate future agreement, interest
rate option agreement, interest rate swap agreement, interest rate cap
agreement, interest rate collar agreement, interest rate hedge agreement or
other similar agreement or arrangement as to which such Person is party or a
beneficiary.
"Investment" in any Person means any direct or indirect advance, loan
(other than advances to customers in the ordinary course of business) or other
extension of credit (including by way of Guarantee or similar arrangement, but
excluding any debt or extension of credit represented by a bank deposit other
than a time deposit) or capital contribution to (by means of any transfer of
cash or other property to others or any payment for property or services for the
account or use of others), or any purchase or acquisition of Capital Stock for
consideration, Indebtedness or other similar instruments issued by, such Person.
For purposes of SECTION 3.4, (i) "Investment" will include the portion
<PAGE>
(proportionate to the Company's equity interest in a Restricted Subsidiary to be
designated as an Unrestricted Subsidiary) of the fair market value of the net
assets of such Restricted Subsidiary of the Company at the time that such
Restricted Subsidiary is designated an Unrestricted Subsidiary; PROVIDED,
HOWEVER, that upon a redesignation of such Subsidiary as a Restricted
Subsidiary, the Company will be deemed to continue to have a permanent
"Investment" in an Unrestricted Subsidiary in an amount (if positive) equal to
(x) the Company's "Investment" in such Subsidiary at the time of such
redesignation less (y) the portion (proportionate to the Company's equity
interest in such Subsidiary) of the fair market value of the net assets of such
Subsidiary at the time that such Subsidiary is so re-designated a Restricted
Subsidiary; and (ii) any property transferred to or from an Unrestricted
Subsidiary will be valued at its fair market value at the time of such transfer,
in each case as determined in good faith by the Board of Directors of the
Company.
"Issue Date" means the date on which the Initial Securities are
originally issued.
"Legal Holiday" has the meaning ascribed to it in SECTION 11.8.
"Lien" means any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind (including any conditional sale or other title
retention agreement or lease in the nature thereof).
"Management Agreement" means the management agreement, dated as of the
consummation of the Acquisition, between Jacobson Partners and the Company
relating to management services to be provided to the Company by Jacobson
Partners.
"Management Equity Interests" means shares of Capital Stock of the
Company or of a Subsidiary Guarantor, options, warrants or stock appreciation or
similar rights in respect of such Capital Stock, in each case held by any
current or former officer, employee or other member of management (or their
estates or beneficiaries under their estates) of the Company or of such
Subsidiary Guarantor which were acquired or granted or are subject to any
management equity subscription agreement, employment agreement, employee benefit
plan or arrangement, stockholder agreement, stock option agreement or similar
management investor plan or agreement and which may be required to be
repurchased, redeemed or otherwise acquired by the Company or such Subsidiary
Guarantor in each case pursuant to the terms of such agreement, plan or
arrangement.
"Merger Agreement" means the Agreement and Plan of Merger, dated as of
May 13, 1998, among the Company, NERC Acquisition Corp. and Bertucci's, Inc.
"Net Available Cash" from an Asset Disposition means cash payments
received (including any cash payments received by way of deferred payment of
principal pursuant to a note or installment receivable or otherwise, but only as
and when received, but excluding any other consideration received in the form of
assumption by the acquiring Person of Indebtedness or other obligations relating
to the properties or assets that are the subject of such Asset Disposition or
received in any other noncash form) therefrom, in each case net of (i) all
legal, accounting, investment banking, title and recording tax expenses,
commissions and other fees and expenses Incurred, and all Federal, state,
provincial, foreign and local taxes required to be paid or accrued as a
liability under GAAP, as a consequence of such Asset Disposition, (ii) all
payments made on any Indebtedness which is secured by any assets subject to such
Asset Disposition, in accordance with the terms of any Lien upon such assets, or
which must by its terms, or in order to obtain a necessary consent to such Asset
<PAGE>
Disposition, or by applicable law be repaid out of the proceeds from such Asset
Disposition, (iii) all distributions and other payments required to be made to
minority interest holders in Subsidiaries or joint ventures as a result of such
Asset Disposition and (iv) the deduction of appropriate amounts to be provided
by the seller as a reserve, in accordance with GAAP, against any liabilities
associated with the assets disposed of in such Asset Disposition and retained by
the Company or any Restricted Subsidiary after such Asset Disposition.
"Net Cash Proceeds", with respect to any issuance or sale of Capital
Stock, means the cash proceeds of such issuance or sale net of attorneys' fees,
accountants' fees, underwriters' or placement agents' fees, discounts or
commissions and brokerage, consultant and other fees actually Incurred in
connection with such issuance or sale and net of taxes paid or payable as a
result of such issuance or sale.
"Non-Recourse Debt" means Indebtedness (i) as to which neither the
Company nor any Restricted Subsidiary (a) provides any guarantee or credit
support of any kind (including any undertaking, guarantee, indemnity, agreement
or instrument that would constitute Indebtedness) or (b) is directly or
indirectly liable (as a guarantor or otherwise) and (ii) no default with respect
to which (including any rights that the holders thereof may have to take
enforcement action against an Unrestricted Subsidiary) would permit (upon
notice, lapse of time or both) any holder of any other Indebtedness of the
Company or any Restricted Subsidiary to declare a default under such other
Indebtedness or cause the payment thereof to be accelerated or payable prior to
its stated maturity.
"Non-U.S. Person" means a Person who is not a U.S person, as defined
in Regulation S.
"Note Register" means the register of Securities, maintained by the
Trustee, pursuant to SECTION 2.3.
"Officer" means the Chairman of the Board, the President, any Vice
President, the Treasurer or the Secretary of the Company.
"Officers' Certificate" means a certificate signed by two Officers.
"Opinion of Counsel" means a written opinion from legal counsel who is
acceptable to the Trustee. The counsel may be an employee of or counsel to the
Company or the Trustee.
"Permitted Holders" means (i) Jacobson Partners or any Affiliate of
Jacobson Partners; (ii) any stockholder of the Company on the Acquisition
Closing Date; (iii) family members or relatives of the Persons described in
clause (ii); (iv) any trusts created for the benefit of the Persons described in
clause (ii) or (iii); and (v) in the event of the incompetence or death of any
or the Persons described in clause (ii) or (iii), such Person's estate,
executor, administrator, committee or other personal representatives or
beneficiaries.
"Permitted Investment" means an Investment by the Company or any
Restricted Subsidiary in (i) the Company or in a Restricted Subsidiary or a
Person which will, upon the making of such Investment, become a Restricted
Subsidiary; PROVIDED, HOWEVER, that the primary business of such Restricted
Subsidiary is a Related Business; (ii) another Person if as a result of such
Investment such other Person is merged or consolidated with or into, or
transfers or conveys all or substantially all its assets to, the Company or a
Restricted Subsidiary; PROVIDED, HOWEVER, that such Person's primary business is
a Related Business; (iii) cash and Cash Equivalents; (iv) payroll, travel,
<PAGE>
relocation and similar advances to cover matters that are expected at the time
of such advances ultimately to be treated as expenses for accounting purposes
and that are made in the ordinary course of business; (v) loans or advances to
employees made in the ordinary course of business not exceeding in the
aggregate, at any time, $1.0 million; (vi) stock, obligations or securities
received in settlement of debts created in the ordinary course of business and
owing to the Company or any Restricted Subsidiary or in satisfaction of
judgments; (vii) Investments in a Related Business in the form of joint
ventures, operating agreements, partnership agreements or other similar or
customary agreements, interests or arrangements with unaffiliated third parties,
the aggregate outstanding amount of which does not exceed $10.0 million at any
time; (viii) receivables owing to the Company or any Restricted Subsidiary, if
created or acquired in the ordinary course of business and payable or
dischargeable in accordance with customary trade terms; PROVIDED, HOWEVER, that
such trade terms may include such concessionary trade terms as the Company or
any such Restricted Subsidiary deems reasonable under the circumstances; (ix)
Guarantees permitted to be made pursuant to SECTION 3.3 of this Indenture; (x)
Investments acquired by the Company or any Restricted Subsidiary in connection
with or as a result of a bankruptcy, insolvency, workout, reorganization,
recapitalization or similar arrangement with respect to the obligor under or
issuer of any accounts receivable or Investment held by the Company or any
Restricted Subsidiary; (xi) Interest Rate Agreements entered into in the
ordinary course of business that are permitted under clause (vi) of paragraph
(b) under SECTION 3.3 of this Indenture; (xii) Investments made by the Company
or a Restricted Subsidiary in connection with an Assets Disposition made in
compliance with SECTION 3.6 of this Indenture; (xiii) Investments made solely in
exchange for the issuance of Capital Stock (other than Disqualified Stock) of
the Company; and (xiv) any Investment existing on the date of this Indenture.
"Permitted Liens" means, with respect to any Person, (a) pledges or
deposits by such Person under workers' compensation laws, unemployment insurance
laws or similar legislation, or good faith deposits in connection with bids,
tenders, contracts (other than for the payment of Indebtedness) or leases to
which such Person is a party, or deposits to secure public or statutory
obligations of such Person or deposits or cash or United States government bonds
to secure surety or appeal bonds, performance bonds or other obligations of a
like nature to which such Person is a party, or deposits as security for
contested taxes or import duties or for the payment of rent, in each case
Incurred in the ordinary course of business; (b) Liens imposed by law, including
carriers', warehousemen's and mechanics' Liens, in each case for sums not yet
due or being contested in good faith by appropriate proceedings, or other Liens
arising out of judgments or awards against such Person with respect to which
such Person is then proceeding with an appeal or other proceedings for review;
(c) Liens for taxes, assessments or other governmental charges not yet subject
to penalties for non-payment or which are being contested in good faith by
appropriate proceedings provided appropriate reserves have been taken on the
books of the Company; (d) Liens in favor of issuers of surety bonds or letters
of credit issued pursuant to the request of and for the account of such Person
in the ordinary course of its business; provided, however, that such letters of
credit do not constitute Indebtedness; (e) encumbrances, easements, minor title
defects, irregularities in title or reservations of, or rights of others for,
licenses, rights of way, sewers, electric lines, telegraph and telephone lines
and other similar purposes, or zoning or other restrictions as to the use of
real properties or liens incidental to the conduct of the business of such
Person or to the ownership of its properties which do not in the aggregate
materially adversely affect the value of said properties or materially impair
their use in the operation of the business of such Person; (f) Liens securing an
Interest Rate Agreement so long as the related Indebtedness is, and is permitted
to be under this Indenture, secured by a Lien on the same property securing the
Interest Rate Agreement; (g) leases and subleases of real property which do not
<PAGE>
materially interfere with the ordinary conduct of the business of the Company or
any of its Restricted Subsidiaries; (h) judgement Liens not giving rise to an
Event of Default so long as such Lien is adequately bonded and any appropriate
legal proceedings which may have been duly initiated for the review of such
judgment have not been finally terminated or the period within which such
proceedings may be initiated has not expired; (i) Liens for the purpose of
securing the payment (or the refinancing of the payment) of all or a part of the
purchase price of, Capitalized Lease Obligations with respect to, or costs of
construction or improvement of, assets or property acquired or constructed in
the ordinary course of business provided that (x) the aggregate principal amount
of Indebtedness secured by such Liens is otherwise permitted to be Incurred
under this Indenture and does not exceed such costs and (y) such Liens are
created within one year of construction or acquisition of such assets or
property (or such longer period as may be permitted by the Senior Credit
Agreement) and do not encumber any other assets or property of the Company or
any Restricted Subsidiary other than such assets or property and assets affixed
or appurtenant thereto; (j) Liens arising solely by virtue of any statutory or
common law provision relating to banker's Liens, rights of set- off or similar
rights and remedies as to deposit accounts or other funds maintained with a
creditor depository institution; provided that (x) such deposit account is not a
dedicated cash collateral account and is not subject to restrictions against
access by the Company in excess of those set forth by regulations promulgated by
the Federal Reserve Board, and (y) such deposit account is not intended by the
Company or any Restricted Subsidiary to provide collateral to the depository
institution; (k) Liens arising from Uniform Commercial Code financing statement
filings regarding operating leases entered into by the Company and its
Restricted Subsidiaries in the ordinary course of business; (l) Liens existing
on the Issue Date; (m) Liens on property or shares of stock of a Person at the
time such Person becomes a Subsidiary or is merged into or consolidated with the
Company or any Subsidiary of the Company; PROVIDED, HOWEVER, that such Liens are
not created, Incurred or assumed in connection with, or in contemplation of,
such other Person becoming a Subsidiary; PROVIDED FURTHER, HOWEVER, that any
such Lien may not extend to any other property owned by the Company or any
Restricted Subsidiary; (n) Liens on property at the time the Company or a
Subsidiary acquired the property, including any acquisition by means of a merger
or consolidation with or into the Company or any Restricted Subsidiary;
PROVIDED, HOWEVER, that such Liens are not created, Incurred or assumed in
connection with, or in contemplation of, such acquisition; PROVIDED FURTHER,
however, that such Liens may not extend to any other property owned by the
Company or any Restricted Subsidiary; (o) Liens securing Indebtedness or other
obligations of a Subsidiary owing to the Company or a Wholly Owned Subsidiary;
(p) Liens securing Indebtedness under, or Subsidiary Guarantors relating to, the
Senior Credit Agreement; and (q) Liens securing Refinancing Indebtedness
Incurred to refinance Indebtedness that was previously so secured, provided that
any such Lien is limited to all or part of the same property or assets (plus
improvements, accessions, proceeds or dividends or distributions in respect
thereof) that secured (or, under the written arrangements under which the
original Lien arose, could secure) the obligations to which such Liens relate.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
hereof or any other entity.
"Preferred Stock", as applied to the Capital Stock of any corporation,
means Capital Stock of any class or classes (however designated) which is
preferred as to the payment of dividends, or as to the distribution of assets
upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of Capital Stock of any other class of such
corporation.
<PAGE>
"Private Exchange Securities" shall have the meaning set forth in the
Registration Rights Agreement.
A "Public Market" exists at any time with respect to the common stock
of the Company if (i) the common stock of the Company is then registered with
SEC pursuant to Section 12(b) or 12(g) of the Exchange Act and traded either on
a national securities exchange or in the National Association of Securities
Dealers Automated Quotation System and (ii) at least 15% of the total issued and
outstanding common stock of the Company has been distributed prior to such time
by means of an effective registration statement under the Securities Act.
"QIB" means any "qualified institutional buyer" (as defined in Rule
144A under the Securities Act).
"Refinancing Indebtedness" means Indebtedness that is Incurred to
refund, refinance, replace, renew, repay or extend (including pursuant to any
defeasance or discharge mechanism) (collectively, "refinance", "refinances," and
"refinanced" shall have a correlative meaning) any Indebtedness existing on the
date of this Indenture or Incurred in compliance with this Indenture (including
Indebtedness of the Company that refinances Indebtedness of any Restricted
Subsidiary and Indebtedness of any Restricted Subsidiary that refinances
Indebtedness of another Restricted Subsidiary) including Indebtedness that
refinances Refinancing Indebtedness, PROVIDED, HOWEVER, that (i) (x) if the
Stated Maturity of the Indebtedness being refinanced is earlier than the Stated
Maturity of the Securities, the Refinancing Indebtedness has a Stated Maturity
no earlier than the Stated Maturity of the Indebtedness being refinanced or (y)
if the Stated Maturity of the Indebtedness being refinanced is later than the
Stated Maturity of the Securities, the Refinancing Indebtedness has a Stated
Maturity later than the Securities, (ii) the Refinancing Indebtedness has an
Average Life at the time such Refinancing Indebtedness is Incurred that is equal
to or greater than the Average Life of the Indebtedness being refinanced, and
(iii) such Refinancing Indebtedness is Incurred in an aggregate principal amount
(or if issued with original issue discount, an aggregate issue price) that is
equal to or less than the sum of the aggregate principal amount (or if issued
with original issue discount, the aggregate accreted value) then outstanding
(plus fees and expenses, including any premium and defeasance costs) of the
Indebtedness being refinanced (except to the extent such increase is a result of
a concurrent Incurrence of Indebtedness permitted to be Incurred under this
Indenture).
"Registered Exchange Offer" shall have the meaning set forth in the
Registration Rights Agreement.
"Registration Rights Agreement" means the Exchange and Registration
Rights Agreement, dated July 20, 1998, among the Company, Chase Securities Inc.
and BancBoston Securities Inc.
"Related Business" means the business conducted by the Company and the
Restricted Subsidiaries on the Issue Date and any business related, ancillary or
complementary thereto, in each case as determined by the Company in good faith.
"Restaurant Property" means, with respect to any restaurant location,
the real property, land, buildings, improvements, machinery and equipment, and
structures comprising such restaurant or in which such restaurant is located.
"Restricted Period" means the 40 consecutive days beginning on and
including the later of (A) the day on which the Initial Securities are offered
to Persons other than distributors (as defined in Regulation S under the
Securities Act) and (B) the Issue Date.
<PAGE>
"Restricted Securities Legend" means the Private Placement Legend set
forth in clause (A) of SECTION 2.1(C) or the Regulation S Legend set forth in
clause (B) of SECTION 2.1(C), as applicable.
"Restricted Subsidiary" means any Subsidiary of the Company other than
an Unrestricted Subsidiary.
"Sale/Leaseback Transaction" means an arrangement relating to property
now owned or hereafter acquired whereby the Company or a Restricted Subsidiary
transfers such property to a Person (other than the Company or a Restricted
Subsidiary) and the Company or a Subsidiary leases it from such Person.
"SEC" means the Securities and Exchange Commission.
"Secured Indebtedness" means any Indebtedness of the Company secured
by a Lien.
"Securities" means the Initial Securities and any Private Exchange
Securities or the Exchange Securities issued under this Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Custodian" means the custodian with respect to the Global
Security (as appointed by the Depositary), or any successor Person thereto and
shall initially be the Trustee.
"Senior Credit Agreement" means (i) the credit agreement to be entered
into on the Acquisition Closing Date among the Company, the lenders parties
thereto from time to time and BankBoston, N.A., as administrative agent, and
Chase Bank of Texas, N.A., as documentation agent, and any guarantees issued
thereunder, as the same may be amended, supplemented or otherwise modified from
time to time, and (ii) any renewal, extension, refunding, restructuring,
replacement, restatement or refinancing thereof.
"Significant Subsidiary" means any Subsidiary that would be a
"Significant Subsidiary" of the Company within the meaning of Rule 1-02 under
Regulation S-X promulgated by the SEC.
"Special Purpose Transaction" means a transaction between the Company
or any Restricted Subsidiary, on the one hand ("TRANSFEROR"), and a Restricted
Subsidiary, on the other ("TRANSFEREE"), in which (i) Transferor shall sell,
assign and transfer to Transferee Transferor's interests in one or more
Restaurant Properties, which interest may be in the form of fee interests,
leasehold interests or a combination thereof, (ii) the purchase price for such
interest shall consist solely of cash which shall be (x) paid by Transferee
concurrently with such transfer and (y) applied by Transferor promptly after
such transfer in repayment of outstanding Indebtedness of the Transferor and
(iii) concurrently with such transfer, Transferee, as lessor, and Transferor, as
lessee, shall enter into a lease (or sublease, if appropriate) with respect to
each transferred Restaurant Property which shall provide for rental payments at
least equal to the sum of all interest and principal due in respect of
Transferee's Indebtedness incurred by the Transferee in connection with such
Special Purpose Transaction, all lease payments, utility payments, property
taxes and other similar costs, and all other payments due in respect of the
Restaurant Property.
"Stated Maturity" means, with respect to any security, the date
specified in such security as the fixed date on which the payment of principal
of such security is due and payable, including pursuant to any mandatory
<PAGE>
redemption provision.
"Subordinated Obligation" means any Indebtedness of the Company
(whether outstanding on the Issue Date or thereafter Incurred) which is
subordinate or junior in right of payment to the Securities pursuant to a
written agreement.
"Subsidiary" of any Person means any corporation, association,
partnership or other business entity of which more than 50% of the total voting
power of shares of Capital Stock or other interests (including partnership
interests) entitled (without regard to the occurrence of any contingency) to
vote in the election of directors, managers or trustees thereof is at the time
owned or controlled, directly or indirectly, by (i) such Person, (ii) such
Person and one or more Subsidiaries of such Person or (iii) one or more
Subsidiaries of such Person. Unless otherwise specified herein, each reference
to a Subsidiary will refer to a Subsidiary of the Company.
"Subsidiary Guarantee" means, individually, any Guarantee of payment
of the Securities by a Subsidiary Guarantor pursuant to the terms of this
Indenture, and, collectively, all such Guarantees. Each such Subsidiary
Guarantee will be in the form prescribed in this Indenture.
"Subsidiary Guarantor" means each Subsidiary of the Company (other
than (i) a Foreign Subsidiary or (ii) NERC Limited Partnership, NERC SPE Inc.,
NERC Limited Partnership II and NERC SPE II Inc.) in existence on the Issue Date
and any Restricted Subsidiary (other than (i) a Foreign Subsidiary or (ii) a
special purpose entity and/or limited partnership created solely to Incur
Indebtedness of the type specified in clause (vii) of paragraph (b) under
SECTION 3.3 of this Indenture in connection with a Special Purpose Transaction
or any special purpose corporate general partner thereof) created or acquired by
the Company after the Issue Date.
"Subsidiary Guarantor Subordinated Obligation" means, with respect to
a Subsidiary Guarantor, any Indebtedness of such Subsidiary Guarantor (whether
outstanding on the Issue Date or thereafter Incurred) which is expressly
subordinate in right of payment to the obligations of such Subsidiary Guarantor
under its Subsidiary Guarantee pursuant to a written agreement.
"Transactions" means: (i) the Acquisition; (ii) issuance of the
Initial Securities, (iii) repayment of all amounts outstanding as of the date of
the Acquisition under the Company's revolving credit facility with BankBoston,
N.A.; (iv) repayment of all amounts outstanding as of the date of the
Acquisition under Bertucci's, Inc.'s revolving credit facility with BankBoston,
N.A., after such amounts have been reduced by all cash of Bertucci's, Inc. on
hand immediately prior to the Acquisition; and (v) execution of the Senior
Credit Agreement.
"TIA" or "Trust Indenture Act" means the Trust Indenture Act of 1939
(15 U.S.C. ss.ss. 77aaa-77bbbb), as in effect on the date of this Indenture.
"Trustee" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor.
"Trust Officer" shall mean, when used with respect to the Trustee, any
officer within the corporate trust department of the Trustee with direct
responsibility for the administration of this Indenture or any other officer of
the Trustee to whom any corporate trust matter is referred because of such
person's knowledge of and familiarity with the particular subject.
"Unrestricted Subsidiary" means (i) any Subsidiary of the Company that
<PAGE>
at the time of determination shall be designated an Unrestricted Subsidiary by
the Board of Directors in the manner provided below and (ii) any Subsidiary of
an Unrestricted Subsidiary. The Board of Directors may designate any Subsidiary
of the Company (including any newly acquired or newly formed Subsidiary of the
Company) to be an Unrestricted Subsidiary unless such Subsidiary or any of its
Subsidiaries owns any Capital Stock or Indebtedness of, or owns or holds any
Lien on any property of, the Company or any Restricted Subsidiary of the Company
that is not a Subsidiary of the Subsidiary to be so designated; PROVIDED,
HOWEVER, that either (A) the Subsidiary to be so designated has total
consolidated assets of $10,000 or less or (B) if such Subsidiary has
consolidated assets greater than $10,000, then such designation would be
permitted under SECTION 3.4 of this Indenture. The Board of Directors may
designate any Unrestricted Subsidiary to be a Restricted Subsidiary; PROVIDED,
HOWEVER, that immediately after giving effect to such designation (x) the
Company could Incur $1.00 of additional Indebtedness pursuant to paragraph (a)
of SECTION 3.3 of this Indenture and (y) no Default or Event of Default shall
have occurred and be continuing. Any such designation by the Board of Directors
shall be evidenced to the Trustee by promptly filing with the Trustee a copy of
the Board Resolution giving effect to such designation and an Officers'
Certificate certifying that such designation complied with the foregoing
provisions.
"U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of the United States of America
is pledged and which are not callable or redeemable at the issuer's option.
"Voting Stock" of a corporation means all classes of Capital Stock of
such corporation then outstanding and normally entitled to vote in the election
of directors.
"Wholly-Owned Subsidiary" means a Restricted Subsidiary of the
Company, all of the Capital Stock of which (other than directors' qualifying
shares or any shares required to be held by Persons other than the Company or a
Restricted Subsidiary in connection with the maintenance of liquor licenses) is
owned by the Company or another Wholly-Owned Subsidiary.
SECTION 1.2. OTHER DEFINITIONS.
DEFINED IN
TERM SECTION
"Asset Sale Offer"............................... 3.6
"Acquisition Closing Date"....................... 5.2
"Affiliate Transaction".......................... 3.8
"Agent Member"................................... 2.1(d)
"Authenticating Agent"........................... 2.2
"Bankruptcy Law"................................. 6.1
"Change of Control".............................. 3.9
"Change of Control Offer"........................ 3.9
"Change of Control Payment"...................... 3.9
"Change of Control Payment Date"................. 3.9
"Company Order".................................. 2.2
"Corporate Trust Office"......................... 3.13
"covenant defeasance option"..................... 8.1(b)
"Custodian"...................................... 6.1
"Defaulted Interest"............................. 2.13
"Definitive Securities".......................... 2.1(e)
"Escrow Account"................................. 5.2
<PAGE>
"Escrow Collateral".............................. 5.2
"Escrow Payment Instructions".................... 5.2
"Event of Default"............................... 6.1
"Excess Proceeds"................................ 3.6
"Exchange Global Note"........................... 2.1
"Global Securities".............................. 2.1(a)
"Institutional Accredited Investor Global Note".. 2.1
"Institutional Accredited Investor Note"......... 2.1
"legal defeasance option"........................ 8.1(b)
"Note Register".................................. 2.3
"Obligations".................................... 10.1
"Paying Agent"................................... 2.3
"Private Placement Legend"....................... 2.1(c)
"Registrar"...................................... 2.3
"Regulation S"................................... 2.1(a)
"Regulation S Certificate"....................... 2.1
"Regulation S Global Note"....................... 2.1
"Regulation S Legend"............................ 2.1(c)
"Regulation S Note".............................. 2.1
"Regulation S Permanent Global Note"............. 2.1
"Regulation S Temporary Global Note"............. 2.1
"Release Date"................................... 2.1
"Resale Restriction Termination Date"............ 2.6
"Restricted Payment"............................. 3.4(a)
"Rule 144A"...................................... 2.1(a)
"Rule 144A Global Note".......................... 2.1
"Rule 144A Note"................................. 2.1
"Special Interest Payment Date".................. 2.13
"Special Record Date"............................ 2.13
"Special Redemption Date"........................ 5.2
"Special Redemption Event"....................... 5.2
"Special Redemption Price"....................... 5.2
"Successor Company".............................. 4.1
SECTION 1.3. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT. This
Indenture is subject to the mandatory provisions of the TIA which are
incorporated by reference in and made a part of this Indenture. The following
TIA terms have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company and any other
obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined in the TIA by reference to another statute or defined by SEC rule
have the meanings assigned to them by such definitions.
SECTION 1.4. RULES OF CONSTRUCTION. Unless the context otherwise
requires:
(1) a term has the meaning assigned to it;
<PAGE>
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and words in the plural
include the singular;
(6) unsecured Indebtedness shall not be deemed to be subordinate or
junior to Secured Indebtedness merely by virtue of its nature as unsecured
Indebtedness;
(7) the principal amount of any non-interest bearing or other discount
security at any date shall be the principal amount thereof that would be shown
on a balance sheet of the issuer dated such date prepared in accordance with
GAAP; and
(8) the principal amount of any Preferred Stock shall be (i) the
maximum liquidation value of such Preferred Stock or (ii) the maximum mandatory
redemption or mandatory repurchase price with respect to such Preferred Stock,
whichever is greater.
ARTICLE II
THE SECURITIES
SECTION 2.1. FORM, DATING AND TERMS. (a) The Initial Securities are
being offered and sold by the Company pursuant to a Purchase Agreement, dated
July 13, 1998, among the Company, Chase Securities Inc. and BancBoston
Securities Inc.
Initial Securities offered and sold to the qualified institutional
buyers (as defined in Rule 144A under the Securities Act ("RULE 144A")) in the
United States of America (the "RULE 144A Note") will be issued on the Issue Date
in the form of a permanent global Security substantially in the form of EXHIBIT
A, which is hereby incorporated by reference and made a part of this Indenture,
together with appropriate legends as set forth in SECTION 2.1(C) (the "RULE 144A
GLOBAL NOTE"), deposited with the Trustee, as custodian for the Depositary, duly
executed by the Company and authenticated by the Trustee as hereinafter
provided. The Rule 144A Global Note may be represented by more than one
certificate, if so required by the Depositary's rules regarding the maximum
principal amount to be represented by a single certificate. The aggregate
principal amount of the Rule 144A Global Note may from time to time be increased
or decreased by adjustments made on the records of the Trustee, as custodian for
the Depositary or its nominee, as hereinafter provided.
Initial Securities offered and sold outside the United States of
America ("REGULATION S NOTE") in reliance on Regulation S under the Securities
Act ("REGULATION S") will be issued on the Issue Date in the form of a temporary
global Security, without interest coupons, substantially in the form set forth
in EXHIBIT A, which are hereby incorporated by reference and made a part of this
Indenture, together with appropriate legends as set forth in SECTION 2.1(C) (a
"REGULATION S TEMPORARY GLOBAL NOTE"). Beneficial interests in a Regulation S
Temporary Global Note will be exchangeable for beneficial interests in a single
permanent global security (the "REGULATION S PERMANENT GLOBAL NOTE", together
with the Regulation S Temporary Global Note, the "REGULATION S GLOBAL NOTE") on
<PAGE>
or after the expiration of the Restricted Period (the "RELEASE DATE") upon the
receipt by the Trustee or its agent of a certificate certifying that the Holder
of the beneficial interest in the Regulation S Temporary Global Note is a
Non-U.S. Person (a "REGULATION S CERTIFICATE"), substantially in the form set
forth in SECTION 2.8. Upon receipt by the Trustee or Paying Agent of a
Regulation S Certificate, (i) with respect to the first such Regulation S
Certificate, the Company shall execute and upon receipt of a Company Order for
authentication, the Trustee or an Authenticating Agent (as defined in SECTION
2.2) shall authenticate and deliver to the custodian, the applicable Regulation
S Permanent Global Note and (ii) with respect to the first and all subsequent
Regulation S Certificates, the custodian shall exchange on behalf of the
applicable beneficial owners the portion of the applicable Regulation S
Temporary Global Note covered by such Regulation S Certificates for a comparable
portion of the applicable Regulation S Permanent Global Note. Upon any exchange
of a portion of a Regulation S Temporary Global Note for a comparable portion of
a Regulation S Permanent Global Note, the custodian shall endorse on the
schedules affixed to each of such Regulation S Global Note (or on continuations
of such schedules affixed to each of such Regulation S Global Note and made
parts thereof) appropriate notations evidencing the date of transfer and (x)
with respect to the applicable Regulation S Temporary Global Note, a decrease in
the principal amount thereof equal to the amount covered by the applicable
certification and (y) with respect to the applicable Regulation S Permanent
Global Note, an increase in the principal amount thereof equal to the principal
amount of the decrease in the applicable Regulation S Temporary Global Note
pursuant to clause (x) above. The Regulation S Global Note will be deposited
with the Trustee, as custodian for the Depositary, duly executed by the Company
and authenticated by the Trustee as hereinafter provided. The Regulation S
Global Note may be represented by more than one certificate, if so required by
the Depositary's rules regarding the maximum principal amount to be represented
by a single certificate. The aggregate principal amount of the Regulation S
Global Note may from time to time be increased or decreased by adjustments made
on the records of the Trustee, as custodian for the Depositary or its nominee,
as hereinafter provided.
Initial Securities resold to institutional "accredited investors" (as
defined in Rules 501(a)(1), (2), (3) and (7) under the Securities Act) in the
United States of America (the "INSTITUTIONAL ACCREDITED INVESTOR NOTE") will be
issued in the form of a permanent global Security substantially in the form of
EXHIBIT A, which is hereby incorporated by reference and made a part of this
Indenture, together with appropriate legends as set forth in SECTION 2.1(C) (the
"INSTITUTIONAL ACCREDITED INVESTOR GLOBAL NOTE") deposited with the Trustee, as
custodian for the Depositary, duly executed by the Company and authenticated by
the Trustee as hereinafter provided. The Institutional Accredited Investor
Global Note may be represented by more than one certificate, if so required by
the Depositary's rules regarding the maximum principal amount to be represented
by a single certificate. The aggregate principal amount of the Institutional
Accredited Investor Global Note may from time to time be increased or decreased
by adjustments made on the records of the Trustee, as custodian for the
Depositary or its nominee, as hereinafter provided.
Exchange Securities exchanged for interests in the Rule 144A Note, the
Regulation S Note and the Institutional Accredited Investor Note will be issued
in the form of a permanent global Security substantially in the form of EXHIBIT
B, which is hereby incorporated by reference and made a part of this Indenture,
deposited with the Trustee as hereinafter provided, with the appropriate legend
set forth in SECTION 2.1(C) (the "EXCHANGE GLOBAL NOTE"). The Exchange Global
Note may be represented by more than one certificate, if so required by the
Depositary's rules regarding the maximum principal amount to be represented by a
single certificate.
<PAGE>
The Rule 144A Global Note, the Regulation S Global Note, the Exchange
Global Note and the Institutional Accredited Investor Global Note are sometimes
collectively herein referred to as the "GLOBAL SECURITIES."
The principal of (and premium, if any) and interest on the Securities
shall be payable at the office or agency of the Company maintained for such
purpose in The City of New York, or at such other office or agency of the
Company as may be maintained for such purpose pursuant to SECTION 2.3; PROVIDED,
HOWEVER, that, at the option of the Company, each installment of interest may be
paid by (i) check mailed to addresses of the Persons entitled thereto as such
addresses shall appear on the Note Register or (ii) wire transfer to an account
located in the United States maintained by the payee.
The Private Exchange Securities shall be in the form of EXHIBIT A. The
Securities may have notations, legends or endorsements required by law, stock
exchange rule or usage, in addition to those set forth on EXHIBITS A AND B and
in SECTION 2.1(C). The Company and the Trustee shall approve the forms of the
Securities and any notation, endorsement or legend on them. Each Security shall
be dated the date of its authentication. The terms of the Securities set forth
in EXHIBIT A and EXHIBIT B are part of the terms of this Indenture and, to the
extent applicable, the Company and the Trustee, by their execution and delivery
of this Indenture, expressly agree to be bound by such terms.
(b) DENOMINATIONS. The Securities shall be issuable only in fully
registered form, without coupons, and only in denominations of $1,000 and any
integral multiple thereof.
(c) RESTRICTIVE LEGENDS. Unless and until (i) an Initial Security is
sold under an effective registration statement or (ii) an Initial Security is
exchanged for an Exchange Security in connection with an effective registration
statement, in each case pursuant to the Registration Rights Agreement, (A) in
the case of the Rule 144A Global Note and the Institutional Accredited Investor
Global Note, such Initial Security shall bear the following legend (the "PRIVATE
PLACEMENT LEGEND") on the face thereof:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OR
OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION
HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED
OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES, ON ITS OWN
BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS PURCHASED
SECURITIES, TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO
THE DATE (THE "RESALE RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS
AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON
WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS
SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY (A) TO THE COMPANY,
(B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE
UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE
FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, TO A PERSON IT
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND
SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION
S UNDER THE SECURITIES ACT, (E) TO AN "ACCREDITED INVESTOR" WITHIN THE
MEANING OF RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS
AN INSTITUTIONAL INVESTOR ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR
<PAGE>
FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE
IN A TRANSACTION INVOLVING A MINIMUM PRINCIPAL AMOUNT OF $250,000 OF
SECURITIES, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR
SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES
ACT, OR (F) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND THE
TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO
CLAUSES (D), (E) AND (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM. THIS
LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE
RESTRICTION TERMINATION DATE."; and
(B) in the case of the Regulation S Global Note, such Initial Security
shall bear the following legend (the "REGULATION S LEGEND") on the face thereof:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD WITHIN THE UNITED STATES OR TO OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY
ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT IT IS NOT A U.S.
PERSON NOR IS IT PURCHASING FOR THE ACCOUNT OF A U.S. PERSON AND IS
ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH
REGULATION S UNDER THE SECURITIES ACT ("REGULATION S"), (2) BY ITS
ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH
SECURITY, PRIOR TO THE DATE (THE "RESALE RESTRICTION TERMINATION DATE")
WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND
THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE
OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY (A) TO
THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE
SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE
IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR
OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S, (E) TO AN
"ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) OR (7)
UNDER THE SECURITIES ACT THAT IS AN INSTITUTIONAL INVESTOR ACQUIRING THE
SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL
ACCREDITED INVESTOR, IN EACH CASE IN A TRANSACTION INVOLVING A MINIMUM
PRINCIPAL AMOUNT OF SECURITIES OF $250,000, FOR INVESTMENT PURPOSES AND NOT
WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN
VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO ANY OTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT
TO THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR
TRANSFER PURSUANT TO CLAUSES (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN
OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO
EACH OF THEM AND IN THE CASE OF THE FOREGOING CLAUSE (E), A CERTIFICATE OF
TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS SECURITY IS
COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE COMPANY AND THE TRUSTEE.
THIS LEGEND WILL BE REMOVED AFTER 40 CONSECUTIVE DAYS BEGINNING ON AND
INCLUDING THE LATER OF (A) THE DAY ON WHICH THE SECURITIES ARE OFFERED TO
PERSONS OTHER THAN DISTRIBUTORS (AS DEFINED IN REGULATION S) AND (B) THE
DATE OF THE CLOSING OF THE ORIGINAL OFFERING. AS USED HEREIN, THE TERMS
"OFFSHORE TRANSACTION", "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS
GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT."
The Global Securities, whether or not an Initial Security, shall bear
the following legend on the face thereof:
<PAGE>
"UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW
YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.
OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL
BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH
IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF."
The Regulation S Temporary Global Note shall also bear the following
legend on the face thereof:
THIS GLOBAL NOTE IS A TEMPORARY GLOBAL NOTE FOR PURPOSES OF REGULATION S
UNDER THE SECURITIES ACT. NEITHER THIS TEMPORARY GLOBAL NOTE NOR ANY
INTEREST HEREIN MAY BE OFFERED, SOLD OR DELIVERED, EXCEPT AS PERMITTED
UNDER THE INDENTURE REFERRED TO BELOW.
NO BENEFICIAL OWNERS OF THIS TEMPORARY GLOBAL NOTE SHALL BE ENTITLED TO
RECEIVE PAYMENT OF PRINCIPAL OR INTEREST HEREON UNLESS THE REQUIRED
CERTIFICATIONS HAVE BEEN DELIVERED PURSUANT TO THE TERMS OF THE INDENTURE.
(d) BOOK-ENTRY PROVISIONS. (i) This SECTION 2.1(D) shall apply only to
Global Securities deposited with the Trustee, as custodian for the Depositary.
(ii) Each Global Security initially shall (x) be registered in the
name of the Depositary for such Global Security or the nominee of such
Depositary, (y) be delivered to the Trustee as custodian for such Depositary and
(z) bear legends as set forth in SECTION 2.1(C).
(iii) Members of, or participants in, the Depositary ("AGENT MEMBERS")
shall have no rights under this Indenture with respect to any Global Security
held on their behalf by the Depositary or by the Trustee as the custodian of the
Depositary or under such Global Security, and the Depositary may be treated by
the Company, the Trustee and any agent of the Company or the Trustee as the
absolute owner of such Global Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Company, the
Trustee or any agent of the Company or the Trustee from giving effect to any
written certification, proxy or other authorization furnished by the Depositary
or impair, as between the Depositary and its Agent Members, the operation of
customary practices of the Depositary governing the exercise of the rights of a
holder of a beneficial interest in any Global Security.
(iv) In connection with any transfer of a portion of the beneficial
interest in a Global Security pursuant to subsection (e) of this Section to
beneficial owners who are required to hold Definitive Securities, the Trustee
shall reflect on its books and records the date and a decrease in the principal
amount of such Global Security in an amount equal to the principal amount of the
beneficial interest in the Global Security to be transferred, and the Company
shall execute, and the Trustee shall authenticate and deliver, one or more
Definitive Securities of like tenor and amount.
<PAGE>
(v) In connection with the transfer of an entire Global Security to
beneficial owners pursuant to subsection (e) of this Section, such Global
Security shall be deemed to be surrendered to the Trustee for cancellation, and
the Company shall execute, and the Trustee shall authenticate and deliver, to
each beneficial owner identified by the Depositary in exchange for its
beneficial interest in such Global Security, an equal aggregate principal amount
of Definitive Securities of authorized denominations.
(e) DEFINITIVE SECURITIES. Except as provided below, owners of
beneficial interests in Global Securities will not be entitled to receive
certificated Securities ("DEFINITIVE SECURITIES"). If required to do so pursuant
to any applicable law or regulation, beneficial owners may obtain Definitive
Securities in exchange for their beneficial interests in a Global Security upon
written request in accordance with the Depositary's and the Registrar's
procedures. In addition, Definitive Securities shall be transferred to all
beneficial owners in exchange for their beneficial interests in a Global
Security if (i) the Depositary notifies the Company that it is unwilling or
unable to continue as Depositary for such Global Security or the Depositary
ceases to be a clearing agency registered under the Exchange Act, at a time when
the Depositary is required to be so registered in order to act as Depositary,
and in each case a successor depositary is not appointed by the Company within
90 days of such notice or, (ii) the Company executes and delivers to the Trustee
and Registrar an Officers' Certificate stating that such Global Security shall
be so exchangeable or (iii) an Event of Default has occurred and is continuing
and the Registrar has received a request from the Depositary or the Trustee.
(f) Any Definitive Security delivered in exchange for an interest in a
Global Security pursuant to SECTION 2.1(D)(IV) OR (V) shall, except as otherwise
provided by SECTION 2.6(C), bear the applicable legend regarding transfer
restrictions applicable to the Definitive Security set forth in SECTION 2.1(C).
(g) The registered holder of a Global Security may grant proxies and
otherwise authorize any Person, including Agent Members and Persons that may
hold interests through Agent Members, to take any action which a Holder is
entitled to take under this Indenture or the Securities.
SECTION 2.2. EXECUTION AND AUTHENTICATION. One Officer shall sign the
Securities for the Company by manual or facsimile signature. If an Officer whose
signature is on a Security no longer holds that office at the time the Trustee
authenticates the Security, the Security shall be valid nevertheless.
A Security shall not be valid until an authorized signatory of the
Trustee manually authenticates the Security. The signature of the Trustee on a
Security shall be conclusive evidence that such Security has been duly and
validly authenticated and issued under this Indenture.
At any time and from time to time after the execution and delivery of
this Indenture, the Trustee shall authenticate and make available for delivery:
(1) Initial Securities for original issue on the Issue Date in an aggregate
principal amount of $100.0 million and (2) Exchange Securities for issue only in
a Registered Exchange Offer pursuant to the Registration Rights Agreement, and
only in exchange for Initial Securities of an equal principal amount, in each
case upon a written order of the Company signed by two Officers or by an Officer
and either an Assistant Treasurer or an Assistant Secretary of the Company (the
"COMPANY ORDER"). Such Company Order shall specify the amount of the Securities
to be authenticated and the date on which the original issue of Securities is to
be authenticated and whether the Securities are to be Initial Securities or
Exchange Securities. The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is limited to $100.0 million
outstanding except as provided in SECTION 2.9. All Securities issued on the
<PAGE>
Issue Date shall be identical in all respects. Notwithstanding anything to the
contrary contained in this Indenture, all Securities issued under this Indenture
shall vote and consent together on all matters as one class and no Securities
will have the right to vote or consent as a separate class on any matter.
The Trustee may appoint an agent (the "AUTHENTICATING AGENT")
reasonably acceptable to the Company to authenticate the Securities. Unless
limited by the terms of such appointment, any such Authenticating Agent may
authenticate Securities whenever the Trustee may do so. Each reference in this
Indenture to authentication by the Trustee includes authentication by the
Authenticating Agent.
In case the Company, pursuant to ARTICLE IV, shall be consolidated or
merged with or into any other Person or shall convey, transfer, lease or
otherwise dispose of its properties and assets substantially as an entirety to
any Person, and the successor Person resulting from such consolidation, or
surviving such merger, or into which the Company shall have been merged, or the
Person which shall have received a conveyance, transfer, lease or other
disposition as aforesaid, shall have executed an indenture supplemental hereto
with the Trustee pursuant to ARTICLE IV, any of the Securities authenticated or
delivered prior to such consolidation, merger, conveyance, transfer, lease or
other disposition may, from time to time, at the request of the successor
Person, be exchanged for other Securities executed in the name of the successor
Person with such changes in phraseology and form as may be appropriate, but
otherwise in substance of like tenor as the Securities surrendered for such
exchange and of like principal amount; and the Trustee, upon Company Order of
the successor Person, shall authenticate and deliver Securities as specified in
such order for the purpose of such exchange. If Securities shall at any time be
authenticated and delivered in any new name of a successor Person pursuant to
this SECTION 2.2 in exchange or substitution for or upon registration of
transfer of any Securities, such successor Person, at the option of the Holders
but without expense to them, shall provide for the exchange of all Securities at
the time outstanding for Securities authenticated and delivered in such new
name.
SECTION 2.3. REGISTRAR AND PAYING AGENT. The Company shall maintain an
office or agency where Securities may be presented for registration of transfer
or for exchange (the "REGISTRAR") and an office or agency where Securities may
be presented for payment (the "PAYING AGENT"). The Company shall cause each of
the Registrar and the Paying Agent to maintain an office or agency in the
Borough of Manhattan, The City of New York. The Registrar shall keep a register
of the Securities and of their transfer and exchange (the "NOTE REGISTER"). The
Company may have one or more co-registrars and one or more additional paying
agents. The term "Paying Agent" includes any additional paying agent.
The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent or co-registrar not a party to this Indenture, which
shall incorporate the terms of the TIA. The agreement shall implement the
provisions of this Indenture that relate to such agent. The Company shall notify
the Trustee of the name and address of each such agent. If the Company fails to
maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be
entitled to appropriate compensation therefor pursuant to SECTION 7.7. The
Company or any of its domestically incorporated Wholly-Owned Subsidiaries may
act as Paying Agent, Registrar, co-registrar or transfer agent.
The Company initially appoints the Trustee as Registrar and Paying
Agent for the Securities.
SECTION 2.4. PAYING AGENT TO HOLD MONEY IN TRUST. By at least 10:00
a.m (New York City time) on the date on which any principal of or interest on
<PAGE>
any Security is due and payable, the Company shall deposit with the Paying Agent
a sum sufficient to pay such principal or interest when due. The Company shall
require each Paying Agent (other than the Trustee) to agree in writing that such
Paying Agent shall hold in trust for the benefit of Securityholders or the
Trustee all money held by such Paying Agent for the payment of principal of or
interest on the Securities and shall notify the Trustee in writing of any
default by the Company or any Guarantor in making any such payment. If the
Company or a Subsidiary acts as Paying Agent, it shall segregate the money held
by it as Paying Agent and hold it as a separate trust fund. The Company at any
time may require a Paying Agent (other than the Trustee) to pay all money held
by it to the Trustee and to account for any funds disbursed by such Paying
Agent. Upon complying with this Section, the Paying Agent (if other than the
Company or a Subsidiary) shall have no further liability for the money delivered
to the Trustee. Upon any bankruptcy, reorganization or similar proceeding with
respect to the Company, the Trustee shall serve as Paying Agent for the
Securities.
SECTION 2.5. SECURITYHOLDER LISTS. The Trustee shall preserve in as
current a form as is reasonably practicable the most recent list available to it
of the names and addresses of Securityholders. If the Trustee is not the
Registrar, or to the extent otherwise required under the TIA, the Company shall
furnish to the Trustee, in writing at least seven Business Days before each
interest payment date and at such other times as the Trustee may request in
writing, a list in such form and as of such date as the Trustee may reasonably
require of the names and addresses of Securityholders.
SECTION 2.6. TRANSFER AND EXCHANGE.
(a) The following provisions shall apply with respect to any proposed
transfer of a Rule 144A Note or an Institutional Accredited Investor Note prior
to the date which is two years after the later of the date of original issue and
the last date on which the Company or any Affiliate of the Company was the owner
of such Securities (or any predecessor thereto) (the "RESALE RESTRICTION
TERMINATION DATE"):
(i) a transfer of an Institutional Accredited Investor Note or a
beneficial interest therein to a QIB shall be made upon the representation
of the transferee in the form of an assignment on the reverse of the
certificate that it is purchasing the Security for its own account or an
account with respect to which it exercises sole investment discretion and
that it and any such account is a "qualified institutional buyer" within
the meaning of Rule 144A, and is aware that the sale to it is being made in
reliance on Rule 144A and acknowledges that it has received such
information regarding the Company as the undersigned has requested pursuant
to Rule 144A or has determined not to request such information and that it
is aware that the transferor is relying upon its foregoing representations
in order to claim the exemption from registration provided by Rule 144A;
(ii) a transfer of a Rule 144A Note or a beneficial interest therein
to an institutional accredited investor shall be made upon receipt by the
Trustee or its agent of a certificate substantially in the form set forth
in SECTION 2.7 from the proposed transferee and, if requested by the
Company or the Trustee, the delivery of an Opinion of Counsel,
certification and/or other information satisfactory to each of them; and
(iii) a transfer of a Rule 144A Note or an Institutional Accredited
Investor Note or a beneficial interest therein to a Non-U.S. Person shall
be made upon receipt by the Trustee or its agent of a certificate
substantially in the form set forth in SECTION 2.8 from the proposed
transferee and, if requested by the Company or the Trustee, the delivery of
<PAGE>
an Opinion of Counsel, certification and/or other information satisfactory
to each of them.
(b) The following provisions shall apply with respect to any proposed
transfer of a Regulation S Note prior to the expiration of the Restricted
Period:
(i) a transfer of a Regulation S Note or a beneficial interest therein
to a QIB shall be made upon the representation of the transferee, in the
form of assignment on the reverse of the certificate, that it is purchasing
the Security for its own account or an account with respect to which it
exercises sole investment discretion and that it and any such account is a
"qualified institutional buyer" within the meaning of Rule 144A, and is
aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as
the undersigned has requested pursuant to Rule 144A or has determined not
to request such information and that it is aware that the transferor is
relying upon its foregoing representations in order to claim the exemption
from registration provided by Rule 144A; and
(ii) a transfer of a Regulation S Note or a beneficial interest
therein to an institutional accredited investor shall be made upon receipt
by the Trustee or its agent of a certificate substantially in the form set
forth in SECTION 2.7 from the proposed transferee and, if requested by the
Company or the Trustee, the delivery of an Opinion of Counsel,
certification and/or other information satisfactory to each of them.
After the expiration of the Restricted Period, interests in the
Regulation S Note shall be freely transferable.
(c) RESTRICTED SECURITIES LEGEND. Upon the registration of transfer,
exchange or replacement of Securities not bearing a Restricted Securities
Legend, the Registrar shall deliver Securities that do not bear a Restricted
Securities Legend. Upon the registration of transfer, exchange or replacement of
Securities bearing a Restricted Securities Legend, the Registrar shall deliver
only Securities that bear a Restricted Securities Legend unless there is
delivered to the Registrar an Opinion of Counsel to the effect that neither such
legend nor the related restrictions on transfer are required in order to
maintain compliance with the provisions of the Securities Act.
(d) On the Issue Date, the Company shall deliver to the Trustee an
Officer's Certificate setting forth the Resale Restriction Termination Date and
the Restricted Period.
The Registrar shall retain copies of all letters, notices and other
written communications received pursuant to SECTION 2.1 or this SECTION 2.6. The
Company shall have the right to inspect and make copies of all such letters,
notices or other written communications at any reasonable time upon the giving
of reasonable written notice to the Registrar.
(e) OBLIGATIONS WITH RESPECT TO TRANSFERS AND EXCHANGES OF SECURITIES.
(i) To permit registrations of transfers and exchanges, the Company
shall, subject to the other terms and conditions of this ARTICLE II,
execute and the Trustee shall authenticate Definitive Securities and Global
Securities at the Registrar's or co-registrar's request.
(ii) No service charge shall be made to a Holder for any registration
of transfer or exchange, but the Company may require payment of a sum
sufficient to cover any transfer tax, assessments, or similar governmental
<PAGE>
charge payable in connection therewith (other than any such transfer taxes,
assessments or similar governmental charges payable upon exchange or
transfer pursuant to SECTIONS 3.7, 3.9 or 9.5).
(iii) The Registrar or co-registrar shall not be required to register
the transfer of or exchange of any Security for a period beginning (1) 15
days before the mailing of a notice to redeem Securities and ending at the
close of business on the day of such mailing or (2) 15 days before an
interest payment date and ending on such interest payment date.
(iv) Prior to the due presentation for registration of transfer of any
Security, the Company, the Trustee, the Paying Agent, the Registrar or any
co-registrar may deem and treat the person in whose name a Security is
registered as the absolute owner of such Security for the purpose of
receiving payment of principal of and interest on such Security and for all
other purposes whatsoever, whether or not such Security is overdue, and
none of the Company, the Trustee, the Paying Agent, the Registrar or any
co-registrar shall be affected by notice to the contrary.
(v) Any Definitive Security delivered in exchange for an interest in a
Global Security pursuant to SECTION 2.1(D) shall, except as otherwise
provided by SECTION 2.6(C), bear the applicable legend regarding transfer
restrictions applicable to the Definitive Security set forth in SECTION
2.1(C).
(vi) All Securities issued upon any registration of transfer or
exchange pursuant to the terms of this Indenture shall evidence the same
debt and shall be entitled to the same benefits under this Indenture as the
Securities surrendered upon such registration of transfer or exchange.
(f) NO OBLIGATION OF THE TRUSTEE. (i) The Trustee shall have no
responsibility or obligation to any beneficial owner of a Global Security, a
member of, or a participant in, the Depositary or other Person with respect to
the accuracy of the records of the Depositary or its nominee or of any
participant or member thereof, with respect to any ownership interest in the
Securities or with respect to the delivery to any participant, member,
beneficial owner or other Person (other than the Depositary) of any notice
(including any notice of redemption) or the payment of any amount or delivery of
any Securities (or other security or property) under or with respect to such
Securities. All notices and communications to be given to the Holders and all
payments to be made to Holders in respect of the Securities shall be given or
made only to or upon the order of the registered Holders (which shall be the
Depositary or its nominee in the case of a Global Security). The rights of
beneficial owners in any Global Security shall be exercised only through the
Depositary subject to the applicable rules and procedures of the Depositary. The
Trustee may rely and shall be fully protected in relying upon information
furnished by the Depositary with respect to its members, participants and any
beneficial owners.
(ii) The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer imposed
under this Indenture or under applicable law with respect to any transfer of any
interest in any Security (including any transfers between or among Depositary
participants, members or beneficial owners in any Global Security) other than to
require delivery of such certificates and other documentation or evidence as are
expressly required by, and to do so if and when expressly required by, the terms
of this Indenture, and to examine the same to determine substantial compliance
as to form with the express requirements hereof.
SECTION 2.7. FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION WITH
<PAGE>
TRANSFERS TO INSTITUTIONAL ACCREDITED INVESTORS.
[Date]
United States Trust Company of New York
114 West 47th Street
New York, New York 10036-1532
Attention: Corporate Trust Department
Ladies and Gentlemen:
This certificate is delivered to request a transfer of $ principal
amount of the 10 3/4% Senior Notes due 2008 (the "Securities") of NE Restaurant
Company, Inc. (the "Company").
The undersigned represents and warrants to you that:
1. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended (the
"Securities Act")) purchasing for our own account or for the account of such an
institutional "accredited investor" at least $250,000 principal amount of the
Securities, and we are acquiring the Securities not with a view to, or for offer
or sale in connection with, any distribution in violation of the Securities Act.
We have such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risk of our investment in the Securities
and we invest in or purchase securities similar to the Securities in the normal
course of our business. We and any accounts for which we are acting are each
able to bear the economic risk of our or its investment.
2. We understand that the Securities have not been registered under
the Securities Act and, unless so registered, may not be sold except as
permitted in the following sentence. We agree on our own behalf and on behalf of
any investor account for which we are purchasing Securities to offer, sell or
otherwise transfer such Securities prior to the date which is two years after
the later of the date of original issue and the last date on which the Company
or any affiliate of the Company was the owner of such Securities (or any
predecessor thereto) (the "Resale Restriction Termination Date") only (a) to the
Company, (b) pursuant to a registration statement which has been declared
effective under the Securities Act, (c) in a transaction complying with the
requirements of Rule 144A under the Securities Act, to a person we reasonably
believe is a qualified institutional buyer under Rule 144A (a "QIB") that
purchases for its own account or for the account of a QIB and to whom notice is
given that the transfer is being made in reliance on Rule 144A, (d) pursuant to
offers and sales that occur outside the United States within the meaning of
Regulation S under the Securities Act, (e) to an institutional "accredited
investor" within the meaning of Rule 501(a)(1), (2), (3) or (7) under the
Securities Act that is purchasing for its own account or for the account of such
an institutional "accredited investor," in each case in a minimum principal
amount of Securities of $250,000 or (f) pursuant to any other available
exemption from the registration requirements of the Securities Act, subject in
each of the foregoing cases to any requirement of law that the disposition of
our property or the property of such investor account or accounts be at all
times within our or their control and in compliance with any applicable state
securities laws. The foregoing restrictions on resale will not apply subsequent
to the Resale Restriction Termination Date. If any resale or other transfer of
the Securities is proposed to be made pursuant to clause (e) above prior to the
Resale Restriction Termination Date, the transferor shall deliver a letter from
the transferee substantially in the form of this letter to the Company and the
<PAGE>
Trustee, which shall provide, among other things, that the transferee is an
institutional "accredited investor" (within the meaning of Rule 501(a)(1), (2),
(3) or (7) under the Securities Act) and that it is acquiring such Securities
for investment purposes and not for distribution in violation of the Securities
Act. Each purchaser acknowledges that the Company and the Trustee reserve the
right prior to any offer, sale or other transfer prior to the Resale Termination
Date of the Securities pursuant to clauses (d), (e) or (f) above to require the
delivery of an Opinion of Counsel, certifications and/or other information
satisfactory to the Company and the Trustee.
TRANSFEREE:_____________________
BY______________________________
Signature Medallion Guaranteed
SECTION 2.8. FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION WITH
TRANSFERS PURSUANT TO REGULATION S.
[Date]
United States Trust Company of New York
114 West 47th Street
New York, New York 10036-1532
Attention: Corporate Trust Department
Re: NE Restaurant Company, Inc.
10 3/4% SENIOR NOTES DUE 2008 (THE "SECURITIES")
Ladies and Gentlemen:
In connection with our proposed sale of $________ aggregate principal
amount of the Securities, we confirm that such sale has been effected pursuant
to and in accordance with Regulation S under the United States Securities Act of
1933, as amended (the "Securities Act"), and, accordingly, we represent that:
(a) the offer of the Securities was not made to a Person in the United
States;
(b) either (i) at the time the buy order was originated, the
transferee was outside the United States or we and any person acting on our
behalf reasonably believed that the transferee was outside the United
States or (ii) the transaction was executed in, on or through the
facilities of a designated off-shore securities market and neither we nor
any person acting on our behalf knows that the transaction has been
pre-arranged with a buyer in the United States;
(c) no directed selling efforts have been made in the United States in
contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S, as applicable; and
(d) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act.
In addition, if the sale is made during a restricted period and the
provisions of Rule 903(c)(3) or Rule 904(c)(1) of Regulation S are applicable
thereto, we confirm that such sale has been made in accordance with the
applicable provisions of Rule 903(c)(3) or Rule 904(c)(1), as the case may be.
<PAGE>
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this certificate have the
meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By:____________________________
_____________________________
Authorized Signature Signature Medallion Guaranteed
SECTION 2.9. MUTILATED, DESTROYED, LOST OR STOLEN SECURITIES. If a
mutilated Security is surrendered to the Registrar or if the Holder of a
Security claims that the Security has been lost, destroyed or wrongfully taken,
the Company shall issue and the Trustee shall authenticate a replacement
Security if the requirements of Section 8-405 of the New York Uniform Commercial
Code are met and the Holder satisfies any other reasonable requirements of the
Trustee. If required by the Trustee or the Company, such Holder shall furnish an
indemnity bond sufficient in the judgment of the Company and the Trustee to
protect the Company, the Trustee, the Paying Agent, the Registrar and any
co-registrar from any loss which any of them may suffer if a Security is
replaced, and, in the absence of notice to the Company, any Subsidiary Guarantor
or the Trustee that such Security has been acquired by a bona fide purchaser,
the Company shall execute and upon Company Order the Trustee shall authenticate
and make available for delivery, in exchange for any such mutilated Security or
in lieu of any such destroyed, lost or stolen Security, a new Security of like
tenor and principal amount, bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) in connection
therewith.
Every new Security issued pursuant to this Section in lieu of any
mutilated, destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, any Subsidiary Guarantor (if
applicable) and any other obligor upon the Securities, whether or not the
mutilated, destroyed, lost or stolen Security shall be at any time enforceable
by anyone, and shall be entitled to all benefits of this Indenture equally and
proportionately with any and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 2.10. OUTSTANDING SECURITIES. Securities outstanding at any
time are all Securities authenticated by the Trustee except for those canceled
by it, those delivered to it for cancellation and those described in this
Section as not outstanding. A Security ceases to be outstanding in the event the
Company or an Affiliate of the Company holds the Security provided, however,
<PAGE>
that in determining whether the Trustee shall be protected in making a
determination whether the holders of the requisite principal amount of
outstanding Securities are present at a meeting of holders of Securities for
quorum purposes or have consented to or voted in favor of any request, demand,
authorization, direction, notice, consent, waiver, amendment or modification
hereunder, or relying upon any such quorum, consent or vote, only Securities
which the Trustee actually knows to be held by the Company or an Affiliate of
the Company shall not be considered outstanding.
If a Security is replaced pursuant to SECTION 2.9, it ceases to be
outstanding unless the Trustee and the Company receive proof satisfactory to
them that the replaced Security is held by a bona fide purchaser.
If the Paying Agent segregates and holds in trust, in accordance with
this Indenture, on a redemption date or maturity date money sufficient to pay
all principal and interest payable on that date with respect to the Securities
(or portions thereof) to be redeemed or maturing, as the case may be, and the
Paying Agent is not prohibited from paying such money to the Securityholders on
that date pursuant to the terms of this Indenture, then on and after that date
such Securities (or portions thereof) cease to be outstanding and interest on
them ceases to accrue.
SECTION 2.11. TEMPORARY SECURITIES. Until definitive Securities are
ready for delivery, the Company may prepare and the Trustee shall authenticate
temporary Securities. Temporary Securities shall be substantially in the form of
Definitive Securities but may have variations that the Company considers
appropriate for temporary Securities. Without unreasonable delay, the Company
shall prepare and the Trustee shall authenticate Definitive Securities. After
the preparation of Definitive Securities, the temporary Securities shall be
exchangeable for Definitive Securities upon surrender of the temporary
Securities at any office or agency maintained by the Company for that purpose
and such exchange shall be without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Securities, the Company shall execute,
and the Trustee shall authenticate and make available for delivery in exchange
therefor, one or more Definitive Securities representing an equal principal
amount of Securities. Until so exchanged, the Holder of temporary Securities
shall in all respects be entitled to the same benefits under this Indenture as a
holder of Definitive Securities.
SECTION 2.12. CANCELLATION. The Company at any time may deliver
Securities to the Trustee for cancellation. The Registrar and the Paying Agent
shall forward to the Trustee any Securities surrendered to them for registration
of transfer, exchange or payment. The Trustee and no one else shall cancel all
Securities surrendered for registration of transfer, exchange, payment or
cancellation and shall destroy such Securities in accordance with its customary
procedures. The Company may not issue new Securities to replace Securities it
has paid or delivered to the Trustee for cancellation for any reason other than
in connection with a registration of transfer or exchange.
SECTION 2.13. PAYMENT OF INTEREST; DEFAULTED INTEREST. Interest on any
Security which is payable, and is punctually paid or duly provided for, on any
interest payment date shall be paid to the Person in whose name such Security
(or one or more predecessor Securities) is registered at the close of business
on the regular record date for such interest at the office or agency of the
Company maintained for such purpose pursuant to SECTION 2.3.
Any interest on any Security which is payable, but is not paid when
the same becomes due and payable and such nonpayment continues for a period of
30 days shall forthwith cease to be payable to the Holder on the regular record
date by virtue of having been such Holder, and such defaulted interest and (to
<PAGE>
the extent lawful) interest on such defaulted interest at the rate borne by the
Securities (such defaulted interest and interest thereon herein collectively
called "DEFAULTED INTEREST") shall be paid by the Company, at its election in
each case, as provided in clause (a) or (b) below:
(a) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Securities (or their respective predecessor
Securities) are registered at the close of business on a Special Record
Date (as defined below) for the payment of such Defaulted Interest, which
shall be fixed in the following manner. The Company shall notify the
Trustee in writing of the amount of Defaulted Interest proposed to be paid
on each Security and the date (not less than 30 days after such notice) of
the proposed payment (the "SPECIAL INTEREST PAYMENT DATE"), and at the same
time the Company shall deposit with the Trustee an amount of money equal to
the aggregate amount proposed to be paid in respect of such Defaulted
Interest or shall make arrangements satisfactory to the Trustee for such
deposit prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled to
such Defaulted Interest as in this clause provided. Thereupon the Trustee
shall fix a record date (the "SPECIAL RECORD DATE") for the payment of such
Defaulted Interest which shall be not more than 15 days and not less than
10 days prior to the Special Interest Payment Date and not less than 10
days after the receipt by the Trustee of the notice of the proposed
payment. The Trustee shall promptly notify the Company of such Special
Record Date, and in the name and at the expense of the Company, shall cause
notice of the proposed payment of such Defaulted Interest and the Special
Record Date and Special Interest Payment Date therefor to be given in the
manner provided for in SECTION 11.2, not less than 10 days prior to such
Special Record Date. Notice of the proposed payment of such Defaulted
Interest and the Special Record Date and Special Interest Payment Date
therefor having been so given, such Defaulted Interest shall be paid on the
Special Interest Payment Date to the Persons in whose names the Securities
(or their respective Predecessor Securities) are registered at the close of
business on such Special Record Date and shall no longer be payable
pursuant to the following clause (b).
(b) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon such
notice as may be required by such exchange, if, after notice given by the
Company to the Trustee of the proposed payment pursuant to this clause,
such manner of payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
SECTION 2.14. COMPUTATION OF INTEREST. Interest on the Securities
shall be computed on the basis of a 360-day year of twelve 30-day months.
SECTION 2.15. CUSIP NUMBERS. The Company in issuing the Securities may
use "CUSIP" numbers (if then generally in use) and, if so, the Trustee shall use
"CUSIP" numbers in notices of redemption as a convenience to Holders; PROVIDED,
HOWEVER, that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Securities or as contained
in any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such redemption shall
not be affected by any defect in or omission of such CUSIP numbers.
<PAGE>
ARTICLE III
COVENANTS
SECTION 3.1. PAYMENT OF SECURITIES. The Company shall promptly pay the
principal of and interest on the Securities on the dates and in the manner
provided in the Securities and in this Indenture. Principal and interest shall
be considered paid on the date due if on such date the Trustee or the Paying
Agent holds in accordance with this Indenture money sufficient to pay all
principal and interest then due and the Trustee or the Paying Agent, as the case
may be, is not prohibited from paying such money to the Securityholders on that
date pursuant to the terms of this Indenture.
The Company shall pay interest on overdue principal at the rate
specified therefor in the Securities, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
Notwithstanding anything to the contrary contained in this Indenture,
the Company may, to the extent it is required to do so by law, deduct or
withhold income or other similar taxes imposed by the United States of America
from principal or interest payments hereunder.
SECTION 3.2. SEC REPORTS AND AVAILABLE INFORMATION. Notwithstanding
that the Company may not be subject to the reporting requirements of Section 13
or 15(d) of the Exchange Act, to the extent permitted by the Exchange Act, the
Company will file with the Commission, and provide, within 15 days after the
Company is required to file the same with the Commission, the Trustee and the
Holders of the Securities with the annual reports and the information, documents
and other reports (or 16 copies of such portions of any of the foregoing as the
Commission may by rules and regulations prescribe) that are specified in
Sections 13 and 15(d) of the Exchange Act. In the event that the Company is not
permitted to file such reports, documents and information with the Commission
pursuant to the Exchange Act, the Company will nevertheless deliver such
Exchange Act information to the Trustee and the Holders of the Securities as if
the Company were subject to the reporting requirements of Section 13 or 15(d) of
the Exchange Act. In addition, for so long as any of the Securities remain
outstanding the Company shall make such information available to any prospective
purchaser of the Securities or beneficial owner of the Securities in connection
with any sale thereof. The Company shall also comply with the other provisions
of TIA ss. 314(a). Delivery of such reports, information and documents to the
Trustee is for informational purposes only and the Trustee's receipt of such
shall not constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
SECTION 3.3. LIMITATION ON INDEBTEDNESS. (a) The Company will not, and
will not permit any of its Restricted Subsidiaries to, Incur any Indebtedness;
PROVIDED, HOWEVER, that the Company and its Restricted Subsidiaries which are
Subsidiary Guarantors may Incur Indebtedness if on the date thereof, after
giving pro forma effect to the incurrence of such Indebtedness and the intended
application of the proceeds thereof, the Interest Coverage Ratio for the Company
and its Restricted Subsidiaries is at least 2.5 to 1.0.
(b) Notwithstanding the foregoing paragraph (a), the Company and its
Restricted Subsidiaries may Incur the following Indebtedness: (i) Indebtedness
Incurred pursuant to the Senior Credit Agreement; PROVIDED that the aggregate
principal amount of all Indebtedness (with letters of credit being deemed to
have a principal amount equal to the maximum potential liability of the Company
<PAGE>
and its Restricted Subsidiaries thereunder) outstanding at any time under the
Senior Credit Agreement after giving effect to such Incurrence, including all
Refinancing Indebtedness Incurred to refund, refinance or replace any other
Indebtedness Incurred pursuant to this clause (i), does not exceed an amount
equal to $20.0 million; (ii) the Subsidiary Guarantees and Guarantees of
Indebtedness Incurred pursuant to paragraph (a) or clause (i) of this paragraph
(b); (iii) Indebtedness of the Company owing to and held by any Wholly-Owned
Subsidiary or Indebtedness of a Restricted Subsidiary owing to and held by the
Company or any Wholly-Owned Subsidiary; PROVIDED, HOWEVER, that any subsequent
issuance or transfer of any Capital Stock or any other event which results in
any such Wholly-Owned Subsidiary ceasing to be a Wholly-Owned Subsidiary or any
subsequent transfer of any such Indebtedness (except to the Company or a
Wholly-Owned Subsidiary) will be deemed, in each case, to constitute the
Incurrence of such Indebtedness by the issuer thereof; (iv) Indebtedness
represented by (x) the Securities and (y) any Indebtedness (other than the
Indebtedness described in clauses (i), (ii) and (iii)) outstanding on the Issue
Date; (v) Indebtedness of a Restricted Subsidiary Incurred and outstanding on
the date on which such Restricted Subsidiary was acquired by the Company;
PROVIDED, HOWEVER, that at the time such Restricted Subsidiary is acquired by
the Company, the Company would have been able to Incur $1.00 of additional
Indebtedness pursuant to paragraph (a) above after giving effect to the
Incurrence of such Indebtedness pursuant to this clause (v); (vi) Indebtedness
under Interest Rate Agreements; PROVIDED, HOWEVER, that such Interest Rate
Agreements are entered into for bona fide hedging purposes of the Company or its
Restricted Subsidiaries (as determined in good faith by the Board of Directors
or senior management of the Company) and correspond in terms of notional amount,
duration, currencies and interest rates, as applicable, to Indebtedness of the
Company or its Restricted Subsidiaries Incurred without violation of this
Indenture or to business transactions of the Company or its Restricted
Subsidiaries on customary terms entered into in the ordinary course of business;
(vii) Indebtedness incurred to finance or refinance the purchase price or cost
of construction or improvement of property used in the Company's business, and
Capitalized Lease Obligations, in each case secured by Liens described in clause
(i) of the definition of "Permitted Liens," provided, that the aggregate
principal amount thereof incurred in any fiscal year, shall not exceed $15.0
million; (viii) Indebtedness in respect of performance bonds, bankers'
acceptances, workers' compensation claims, surety or appeal bonds, payment
obligations in connection with self-insurance or similar obligations, and bank
overdrafts (and letters of credit in respect thereof) provided by the Company or
any Restricted Subsidiary in the ordinary course of its business and which do
not secure other Indebtedness; (ix) Indebtedness represented by Guarantees by
the Company of Indebtedness otherwise permitted to be Incurred pursuant to this
covenant and Indebtedness represented by Guarantees by a Subsidiary Guarantor of
Indebtedness of the Company or of another Restricted Subsidiary otherwise
permitted to be Incurred pursuant to this covenant; (x) Indebtedness incurred by
the Company or any Subsidiary Guarantor and arising from agreements providing
for indemnification, adjustment of purchase price or similar obligations, from
guarantees or letters of credit, surety bonds or performance bonds securing any
obligations of the Company or any Restricted Subsidiary pursuant to such
agreements, in each case incurred in connection with the purchase or sale of a
business or assets otherwise permitted by this Indenture; (xi) the Incurrence by
the Company or any Subsidiary Guarantor of Refinancing Indebtedness in exchange
for, or the net proceeds which are used to refund, refinance or replace,
Indebtedness that was permitted by this Indenture to be Incurred (other than
Indebtedness incurred pursuant to clause (xii) of this paragraph (b)); and (xii)
Indebtedness (other than Indebtedness described in clauses (i)-(xi)) in a
principal amount which, when taken together with the principal amount of all
other Indebtedness Incurred pursuant to this clause (xii) and then outstanding,
will not exceed $10.0 million.
<PAGE>
(c) Neither the Company nor any Restricted Subsidiary will Incur any
Indebtedness under paragraph (b) above if the proceeds thereof are used,
directly or indirectly, to refinance any Subordinated Obligations of the Company
unless such Indebtedness will be subordinated to the Securities to at least the
same extent as such Subordinated Obligations. No Subsidiary Guarantor will Incur
any Indebtedness under paragraph (b) above if the proceeds thereof are used,
directly or indirectly, to refinance any Subsidiary Guarantor Subordinated
Obligations of such Subsidiary Guarantor unless such Indebtedness will be
subordinated to the obligations of such Subsidiary Guarantor under its
Subsidiary Guarantee to at least the same extent as such Subsidiary Guarantor
Subordinated Obligations.
(d) For purposes of determining compliance with, and the outstanding
principal amount of any particular Indebtedness Incurred pursuant to and in
compliance with, this covenant, in the event that Indebtedness meets the
criteria of more than one of the types of Indebtedness described in paragraph
(b) above, (i) the Company, in its sole discretion, will classify such item of
Indebtedness and only be required to include the amount and type of such
Indebtedness in one of such clauses and (ii) such item of Indebtedness may be
divided and classified in more than one of such clauses.
(e) The Company will not permit any Unrestricted Subsidiary to Incur
any Indebtedness other than Non-Recourse Debt.
SECTION 3.4. LIMITATION ON RESTRICTED PAYMENTS. (a) The Company will
not, and will not permit any of its Restricted Subsidiaries, directly or
indirectly, to (i) declare or pay any dividend or make any distribution on or in
respect of its Capital Stock (including any payment in connection with any
merger or consolidation involving the Company or any of its Restricted
Subsidiaries) except (A) dividends or distributions payable in its Capital Stock
(other than Disqualified Stock) or in options, warrants or other rights to
purchase such Capital Stock and (B) dividends or distributions payable to the
Company or a Restricted Subsidiary of the Company (and if such Restricted
Subsidiary is not a Wholly-Owned Subsidiary, to its other holders of Capital
Stock on a pro rata basis), (ii) purchase, redeem, retire or otherwise acquire
for value any Capital Stock of the Company held by Persons other than a
Restricted Subsidiary of the Company or any Capital Stock of a Restricted
Subsidiary of the Company held by any Affiliate of the Company, other than
another Restricted Subsidiary (in either case, other than in exchange for its
Capital Stock (other than Disqualified Stock)), (iii) purchase, repurchase,
redeem, defease or otherwise acquire or retire for value, prior to scheduled
maturity, scheduled repayment or scheduled sinking fund payment, any
Subordinated Obligations (other than the purchase, repurchase or other
acquisition of Subordinated Obligations purchased in anticipation of satisfying
a sinking fund obligation, principal installment or final maturity, in each case
due within one year of the date of purchase, repurchase or acquisition) or (iv)
make any Investment (other than a Permitted Investment) in any Person (any such
dividend, distribution, purchase, redemption, repurchase, defeasance, other
acquisition, retirement or Investment being herein referred to in clauses (i)
through (iv) as a "RESTRICTED PAYMENT"), if at the time the Company or such
Restricted Subsidiary makes such Restricted Payment: (1) a Default or Event of
Default shall have occurred and be continuing (or would result therefrom); or
(2) the Company and its Restricted Subsidiaries could not Incur an additional
$1.00 of Indebtedness pursuant to paragraph (a) under SECTION 3.3; or (3) the
aggregate amount of such Restricted Payment and all other Restricted Payments
declared or made subsequent to the Issue Date would exceed the sum of: (A) 50%
of Consolidated Net Income accrued during the period (treated as one accounting
period) from the Issue Date to the end of the most recent fiscal quarter ending
prior to the date of such Restricted Payment as to which financial results are
available (or, in case such Consolidated Net Income is a deficit, minus 100% of
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such deficit); (B) the aggregate Net Cash Proceeds received by the Company from
the issue or sale of its Capital Stock (other than Disqualified Stock) or other
capital contributions subsequent to the Issue Date (other than net proceeds to
the extent (x) used to redeem Securities or (y) received from an issuance or
sale of such Capital Stock to a Subsidiary of the Company or an employee stock
ownership plan or similar trust to the extent such sale to an employee stock
ownership plan or similar trust is financed by loans from or guaranteed by the
Company or any Restricted Subsidiary unless such loans have been repaid with
cash on or prior to the date of determination); (C) the amount by which
Indebtedness of the Company is reduced on the Company's balance sheet upon the
conversion or exchange (other than by a Subsidiary of the Company) subsequent to
the Issue Date of any Indebtedness of the Company convertible or exchangeable
for Capital Stock of the Company (less the amount of any cash, or other
property, distributed by the Company upon such conversion or exchange); and (D)
the amount equal to the net reduction in Investments (other than Permitted
Investments) made by the Company or any of its Restricted Subsidiaries in any
Person resulting from (i) repurchases or redemptions of such Investments by such
Person, proceeds realized upon the sale of such Investment to an unaffiliated
purchaser, repayments of loans or advances or other transfers of assets as a
return of capital or similar payment (excluding by way of dividend or
distribution) by such Person to the Company or any Restricted Subsidiary of the
Company or (ii) the redesignation of Unrestricted Subsidiaries as Restricted
Subsidiaries (valued in each case as provided in the definition of "Investment")
not to exceed, in the case of any Unrestricted Subsidiary, the amount of
Investments (excluding Permitted Investments) previously made by the Company or
any Restricted Subsidiary in such Unrestricted Subsidiary, which amount was
included in the calculation of the amount of Restricted Payments; PROVIDED,
HOWEVER, that no amount will be included under this clause (D) to the extent it
is already included in Consolidated Net Income.
(b) The provisions of paragraph (a) will not prohibit: (i) any
purchase, redemption, defeasance or other acquisition of Capital Stock or
Subordinated Obligations of the Company made by exchange for, or out of the
proceeds of the substantially concurrent sale of, Capital Stock of the Company
(other than Disqualified Stock and other than Capital Stock issued or sold to a
Subsidiary or an employee stock ownership plan or similar trust to the extent
such sale to an employee stock ownership plan or similar trust is financed by
loans from or guaranteed by the Company or any Restricted Subsidiary unless such
loans have been repaid with cash on or prior to the date of determination);
PROVIDED, HOWEVER, that (A) such purchase, redemption, defeasance or other
acquisition will be excluded in subsequent calculations of the amount of
Restricted Payments and (B) the Net Cash Proceeds from such sale will be
excluded from clause (3) (B) of paragraph (a); (ii) any purchase, redemption,
defeasance or other acquisition of Subordinated Obligations of the Company made
by exchange for, or out of the proceeds of the substantially concurrent sale of,
Subordinated Obligations of the Company; PROVIDED, HOWEVER, that such purchase,
redemption, defeasance or other acquisition will be excluded in subsequent
calculations of the amount of Restricted Payments; (iii) dividends paid within
60 days after the date of declaration if at such date of declaration such
dividend would have complied with this provision; PROVIDED, HOWEVER, that such
dividends will be included in subsequent calculations of the amount of
Restricted Payments; (iv) any redemptions, repurchases, defeasances or other
acquisitions of Management Equity Interests, in each case in connection with the
repurchase provisions under employee stock option agreement or plan, stock
purchase agreements, subscription agreements, employment agreements, employee
benefit plan or arrangement, stockholder agreement or other agreements to
compensate management employees; PROVIDED, HOWEVER, that such redemptions,
repurchases or other acquisitions will be included in subsequent calculations of
the amount of Restricted Payments; AND PROVIDED FURTHER, HOWEVER, that the
aggregate amount of Restricted Payments made pursuant to this clause (iv) shall
<PAGE>
not exceed $5.0 million in the aggregate; and (v) repurchases of Capital Stock
deemed to occur upon the exercise of stock options if such Capital Stock
represents a portion of the exercise price hereof; PROVIDED, HOWEVER, that such
repurchases will be excluded from subsequent calculations of the amount of
Restricted Payments.
SECTION 3.5. LIMITATION ON RESTRICTIONS ON DISTRIBUTIONS FROM
RESTRICTED SUBSIDIARIES. The Company will not, and will not permit any
Restricted Subsidiary to, create or otherwise cause or permit to exist or become
effective any consensual encumbrance or consensual restriction on the ability of
any Restricted Subsidiary to (i) pay dividends or make any other distributions
on its Capital Stock or pay any Indebtedness or other obligations owed to the
Company, (ii) make any loans or advances to the Company or (iii) transfer any of
its property or assets to the Company, except (a) any encumbrance or restriction
pursuant to an agreement in effect at or entered into on the date of this
Indenture (including, without limitation, the Senior Credit Agreement); (b) any
encumbrance or restriction with respect to a Restricted Subsidiary pursuant to
an agreement relating to any Indebtedness Incurred by a Restricted Subsidiary on
or prior to the date on which such Restricted Subsidiary was acquired by the
Company (other than Indebtedness Incurred as consideration in, or to provide all
or any portion of the funds utilized to consummate, the transaction or series of
related transactions pursuant to which such Restricted Subsidiary became a
Restricted Subsidiary or was acquired by the Company) and outstanding on such
date; (c) any encumbrance or restriction with respect to a Restricted Subsidiary
pursuant to an agreement effecting a refinancing of Indebtedness Incurred
pursuant to an agreement referred to in clause (a) or (b) of this covenant or
this clause (c) or contained in any amendment to an agreement referred to in
clause (a) or (b) of this covenant or this clause (c); PROVIDED, HOWEVER, that
the encumbrances and restrictions with respect to such Restricted Subsidiary
contained in any such agreement or amendment are no less favorable to the
Holders of the Securities than encumbrances and restrictions contained in such
agreements; (d) in the case of clause (iii) above, any encumbrance or
restriction (A) that restricts in a customary manner the subletting, assignment
or transfer of any property or asset that is subject to a lease, license or
similar contract, or the assignment or transfer of any such lease, license or
other contract, (B) by virtue of any transfer of, agreement to transfer, option
or right with respect to, or Lien on, any property or assets of the Company or
any Restricted Subsidiary not otherwise prohibited by this Indenture, (C)
contained in mortgages, pledges or other security agreements securing
Indebtedness of a Restricted Subsidiary to the extent such encumbrance or
restrictions restrict the transfer of the property subject to such mortgages,
pledges or other security agreements or (D) pursuant to customary provisions
restricting dispositions of real property interests set forth in any reciprocal
easement agreements of the Company or any Restricted Subsidiary; (e) any
restriction with respect to a Restricted Subsidiary (or any of its property or
assets) imposed pursuant to an agreement entered into for the direct or indirect
sale or disposition of all or substantially all the Capital Stock or assets of
such Restricted Subsidiary (or the property or assets that are subject to such
restriction) pending the closing of such sale or disposition; (f) encumbrances
or restrictions arising or existing by reason of applicable law and (g)
encumbrances or restrictions contained in agreements relating to Indebtedness
Incurred by Restricted Subsidiaries in connection with Special Purpose
Transactions.
SECTION 3.6. LIMITATION ON SALES OF ASSETS AND SUBSIDIARY STOCK. (a)
The Company will not, and will not permit any of its Restricted Subsidiaries to,
make any Asset 17 Disposition unless (i) the Company or such Restricted
Subsidiary receives consideration at the time of such Asset Disposition at least
equal to the fair market value, as determined in good faith by the Board of
Directors (including as to the value of all non-cash consideration), of the
<PAGE>
shares and assets subject to such Asset Disposition and (ii) at least 80% of the
consideration thereof received by the Company or such Restricted Subsidiary is
in the form of cash or Cash Equivalents.
With respect to any Asset Disposition occurring on or after the Issue
Date from which the Company or any Restricted Subsidiary receives Net Available
Cash, the Company or such Restricted Subsidiary shall apply an amount equal to
100% of the Net Available Cash from such Asset Disposition at its election, to
either (i) prepay, repay or purchase Indebtedness (other than any Subordinated
Obligations or Preferred Stock) of the Company or a Wholly-Owned Subsidiary (in
each case other than Indebtedness owed to the Company or an Affiliate of the
Company) within 365 days from the later of the date of such Asset Disposition or
the receipt of such Net Available Cash; (ii) invest in Additional Assets within
365 days from the later of the date of such Asset Disposition or the receipt of
such Net Available Cash; or (iii) make an offer to purchase the Securities at
100% of the principal amount thereof plus accrued and unpaid interest, if any,
to the date of purchase; PROVIDED, HOWEVER, that, in connection with any
prepayment, repayment or purchase of Indebtedness pursuant to clause (i) above,
the Company or such Restricted Subsidiary will retire such Indebtedness and will
cause the related loan commitment (if any) to be permanently reduced to the
extent required by the Senior Credit Agreement. Notwithstanding the foregoing
provisions, the Company and its Restricted Subsidiaries will not be required to
apply any Net Available Cash in accordance herewith except to the extent that
the aggregate Net Available Cash from all Asset Dispositions which are not
applied in accordance with this covenant exceed $1.0 million. Any Net Available
Cash from an Asset Disposition that is not invested or applied as provided and
within the time period set forth in the first sentence of this paragraph (a)
will be deemed to constitute "Excess Proceeds."
For the purposes of this SECTION 3.6 and for no other purpose, the
following will be deemed to be cash: (x) the assumption by the transferee of
Indebtedness (other than Subordinated Obligations) of the Company or
Indebtedness of any Restricted Subsidiary of the Company and the release of the
Company or such Restricted Subsidiary from all liability on such Indebtedness or
Indebtedness in connection with such Asset Disposition (in which case the
Company will, without further action, be deemed to have applied such deemed cash
amount in accordance with clause (i) of the preceding paragraph) and (y)
securities received by the Company or any Restricted Subsidiary of the Company
from the transferee that are promptly converted by the Company or such
Restricted Subsidiary into cash.
(b) When the aggregate amount of Excess Proceeds exceeds $5.0 million
(with lesser amounts to be carried forward for purposes of determining whether
an Asset Sale Offer (as defined) is required with respect to the Excess Proceeds
from any subsequent Asset Disposition), the Company will be required to make an
offer to purchase (an "ASSET SALE OFFER") within ten days of such time from all
Holders of the Securities in accordance with the procedures set forth in SECTION
5.10 the maximum principal amount (expressed as a multiple of $1,000) of
Securities that may be purchased with such Excess Proceeds. If the aggregate
purchase price of the Securities tendered pursuant to the Asset Sale Offer is
less than the Excess Proceeds, the remaining Excess Proceeds will be available
to the Company to fund other corporate purposes not otherwise prohibited by this
Indenture.
(c) The Company will comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Securities pursuant to an
Asset Sale Offer made pursuant to this SECTION 3.6 and SECTION 5.10. To the
extent that the provisions of any securities laws or regulations conflict with
provisions of this covenant, the Company will comply with the applicable
<PAGE>
securities laws and regulations and will not be deemed to have breached its
obligations under this Indenture by virtue thereof.
SECTION 3.7. LIMITATION ON SALE/LEASEBACK TRANSACTIONS. The Company
will not, and will not permit any Restricted Subsidiary to, enter into any
Sale/Leaseback Transaction with respect to any property unless: (i) the Company
or such Restricted Subsidiary would be entitled to Incur Indebtedness in an
amount equal to the Attributable Indebtedness with respect to such
Sale/Leaseback Transaction pursuant to SECTION 3.3; (ii) the net proceeds
received by the Company or any Restricted Subsidiary in connection with such
Sale/Leaseback Transaction are at least equal to the fair value (as determined
by the Board of Directors) of such property; and (iii) the transfer of such
property is permitted by, and the Company applies the proceeds of such
transaction in compliance with, SECTION 3.6.
SECTION 3.8. LIMITATION ON AFFILIATE TRANSACTIONS. (a) The Company
will not, and will not permit any of its Restricted Subsidiaries to, directly or
indirectly, enter into or conduct any transaction (including the purchase, sale,
lease or exchange of any property or the rendering of any service) with any
Affiliate of the Company (an "AFFILIATE TRANSACTION") unless: (i) the terms of
such Affiliate Transaction are no less favorable to the Company or such
Restricted Subsidiary, as the case may be, than those that could be obtained at
the time of such transaction in arm's-length dealings with a Person who is not
such an Affiliate; (ii) in the event such Affiliate Transaction involves an
aggregate amount in excess of $1.0 million, the terms of such transaction have
been approved by a majority of the members of the Board of Directors of the
Company and by a majority of the members of such Board having no personal stake
in such transaction, if any (and such majority or majorities, as the case may
be, determines, or determine, that such Affiliate Transaction satisfies the
criteria in (i) above); and (iii) in the event such Affiliate Transaction
involves an aggregate amount in excess of $10.0 million, the Company has
received a written opinion from an independent investment banking firm of
nationally recognized standing that such Affiliate Transaction is not materially
less favorable than those that might reasonably have been obtained in a
comparable transaction at such time on an arms-length basis from a Person that
is not an Affiliate.
(b) The foregoing paragraph (a) will not apply to (i) any Restricted
Payment permitted to be made pursuant to the covenant described under SECTION
3.4 of this Indenture, (ii) any issuance of (A) securities to any of the
Permitted Holders or (B) securities, or other payments, awards or grants in
cash, securities or otherwise pursuant to, or the funding of, employment
arrangements, stock options and stock ownership plans approved by the Board of
Directors of the Company, (iii) loans or advances to employees in the ordinary
course of business of the Company or any of its Restricted Subsidiaries, (iv)
any transaction between the Company and a Wholly-Owned Subsidiary or between
Wholly-Owned Subsidiaries, (v) any fees, indemnities, loans or advances to
employees in the ordinary course of business and consistent with past practices
and (vi) payments under the Management Agreement as in effect on the Issue Date.
SECTION 3.9. CHANGE OF CONTROL. Upon the occurrence of any of the
following events (each a "CHANGE OF CONTROL"), unless the Company shall have
exercised its right to redeem the Securities as described in SECTION 5.1, each
Holder will have the right to require the Company to repurchase all or any part
of such Holder's Securities at a purchase price in cash equal to 101% of the
principal amount thereof plus accrued and unpaid interest, if any, to the date
of purchase (subject to the right of holders of record on the relevant record
date to receive interest due on the relevant interest payment date) (the "CHANGE
OF CONTROL PAYMENT"):
<PAGE>
(i) (A) any "person" (as such term is used in Sections 13(d) and 14(d)
of the Exchange Act), other than one or more Permitted Holders, is or
becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act, except that such person shall be deemed to have "beneficial
ownership" of all shares that any such person has the right to acquire,
whether such right is exercisable immediately or only after the passage of
time), directly or indirectly, of more than 35% (or if there is a Public
Market at the time such person is or is deemed to have beneficial
ownership, more than 50%) of the total voting power of the Voting Stock of
the Company (or its successor by merger, consolidation or other business
combination) (for the purposes of this clause, such person shall be deemed
to beneficially own any Voting Stock of the Company held by a parent
corporation, if such person "beneficially owns" (as defined above),
directly or indirectly, more than 35% of the voting power of the Voting
Stock of such parent corporation); and (B) if there is no Public Market,
the Permitted Holders "beneficially own" (as defined in Rules 13d-3 and
13d-5 under the Exchange Act), directly or indirectly, in the aggregate a
lesser percentage of the total voting power of the Voting Stock of the
Company (or its successor by merger, consolidation or purchase of all or
substantially all of its assets) than such other person and do not have the
right or ability by voting power, contract or otherwise to elect or
designate for election a majority of the board of directors of the Company
or such successor (for the purposes of this clause, such other person shall
be deemed to beneficially own any Voting Stock of a specified corporation
held by a parent corporation, if such other person "beneficially owns" (as
defined in clause (A) above), directly or indirectly, more than 35% of the
voting power of the Voting Stock of such parent corporation and the
Permitted Holders "beneficially own" (as defined in this clause (B)),
directly or indirectly, in the aggregate a lesser percentage of the voting
power of the Voting Stock of such parent corporation and do not have the
right or ability by voting power, contract or otherwise to elect or
designate for election a majority of the board of directors of such parent
corporation); or
(ii) during any period of two consecutive years, individuals who at
the beginning of such period constituted the Board of Directors of the
Company (together with any new directors whose election by such Board of
Directors or whose nomination for election by the shareholders of the
Company, as the case may be, was approved by a vote of at least a majority
of the directors of the Company then still in office who were either
directors at the beginning of such period or whose election or nomination
for election was previously so approved or is a designee of the Permitted
Holders or was nominated or elected by such Permitted Holders or any of
their designees) cease for any reason to constitute a majority of the Board
of Directors of the Company; or
(iii) the sale, lease, transfer, conveyance or other disposition
(other than by way of merger or consolidation), in one or a series of
related transactions, of all or substantially all of the assets of the
Company and its Restricted Subsidiaries taken as a whole to any "person"
(as such term is used in Sections 13(d) and 14(d) of the Exchange Act)
other than a Permitted Holder; or
(iv) the adoption by the stockholders of a plan for the liquidation or
dissolution of the Company.
Within 30 days following any Change of Control, unless the Company has
mailed a redemption notice with respect to all the outstanding Securities in
connection with such Change of Control as described in SECTION 5.6, the Company
shall mail a notice to each Holder with a copy to the Trustee stating: (i) that
<PAGE>
a Change of Control has occurred and that such Holder has the right to require
the Company pursuant to this SECTION 3.9 to purchase such Holder's Securities
(the "CHANGE OF CONTROL OFFER") at a purchase price in cash equal to 101% of the
principal amount thereof plus accrued and unpaid interest, if any, to the date
of purchase (subject to the right of Holders of record on a record date to
receive interest on the relevant interest payment date); (ii) the Change of
Control Payment Date (which shall be no earlier than 30 days nor later than 60
days from the date such notice is mailed); (iii) that any Security not tendered
shall continue to accrue interest, if any; (iv) that, unless the Company
defaults in the payment of principal or interest, all Securities accepted for
payment pursuant to the Change of Control Offer shall cease to accrue interest,
if any, after the Change of Control Payment Date; (v) that Holders electing to
have any Securities purchased pursuant to a Change of Control Offer shall be
required to surrender the Securities to the Paying Agent at the address
specified in the notice prior to the close of business on the third Business Day
preceding the Change of Control Payment Date; (vi) that holders shall be
entitled to withdraw their election if the Paying Agent receives, not later than
the close of business on the second Business Day preceding the Change of Control
Payment Date, a facsimile transmission or letter setting forth the name of the
Holder, the principal amount of Securities delivered for purchase, and a
statement that such Holder is withdrawing his election to have the Securities
purchased; and (vii) that Holders whose Securities are being purchased only in
part shall be issued new Securities equal in principal amount to the unpurchased
portion of the Securities surrendered, which unpurchased portion must be equal
to $1,000 in principal amount or an integral multiple thereof.
On a Business Day that is no earlier than 30 days nor later than 60
days after the date that the Company mails or causes to be mailed notice of the
Change of Control to the holders (the "CHANGE OF CONTROL PAYMENT DATE"), the
Company shall, to the extent lawful, (i) accept for payment all Securities or
portions thereof properly tendered pursuant to the Change of Control Offer, (ii)
deposit with the Paying Agent an amount equal to the Change of Control Payment
in respect of all the Securities or portions thereof so tendered and (iii)
deliver or cause to be delivered to the Trustee the Securities so accepted
together with an Officers' Certificate stating the aggregate principal amount of
such Securities or portions thereof being purchased by the Company. The Paying
Agent shall promptly mail to each Holder of the Securities so tendered the
Change of Control Payment for such Securities, and the Trustee shall promptly
authenticate and mail (or cause to be transferred by book-entry) to each Holder
a new Security equal in principal amount to any unpurchased portion of the
Securities surrendered, if any; PROVIDED that each such new Security shall be in
a principal amount of $1,000 or an integral multiple thereof. The Company shall
publicly announce the results of the Change of Control Offer on or as soon as
practicable after the Change of Control Payment Date.
The Company will comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Securities pursuant to this
SECTION 3.9. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Indenture, the Company will comply
with the applicable securities laws and regulations and shall not be deemed to
have breached its obligations described in this Indenture by virtue thereof.
SECTION 3.10. LIMITATION ON DISPOSITIONS OF CAPITAL STOCK OF
RESTRICTED SUBSIDIARIES. The Company (i) will not, and will not permit any
Restricted Subsidiary of the Company to, transfer, convey, sell, lease or
otherwise dispose of any Capital Stock of any Restricted Subsidiary to any
Person (other than the Company or a Wholly Owned Subsidiary), unless (A) such
transfer, conveyance, sale, lease or other disposition is a sale of the common
stock of such Restricted Subsidiary and, after giving effect to the consummation
<PAGE>
thereof, the Company owns none or more than 50% of the outstanding common stock
of such Restricted Subsidiary and (B) the Net Cash Proceeds from such transfer,
conveyance, sale, lease or other disposition are applied in accordance with the
covenant described above under "Limitation on Sales of Assets and Subsidiary
Stock;" and (ii) will not permit any Restricted Subsidiary to issue any of its
Capital Stock (other than, if necessary, shares of its Capital Stock
constituting directors' qualifying shares or any shares required to be held by
Persons other than the Company or a Restricted Subsidiary in connection with the
maintenance of liquor licenses) to any Person other than to the Company or a
Wholly-Owned Subsidiary, unless such issuance is an issuance of the common stock
of such Restricted Subsidiary and, after giving effect to the consummation
thereof, the Company and/or one or more Wholly-Owned Subsidiaries owns more than
50% of the outstanding common stock of such Restricted Subsidiary; PROVIDED,
HOWEVER, that this provision shall not prohibit any pledge or collateral
assignment of the Capital Stock of any Restricted Subsidiary that is permitted
under "Limitation on Liens" or the exercise of any right or remedy by the holder
of any such pledge or assignment.
SECTION 3.11. LIMITATION ON LIENS. The Company will not, and will not
permit any of its Restricted Subsidiaries to, directly or indirectly, create,
Incur or suffer to exist any Lien (other than Permitted Liens) upon any of its
property or assets (including Capital Stock), whether owned on the date of this
Indenture or thereafter acquired, securing any Indebtedness, unless
contemporaneously therewith effective provision is made to secure the
Indebtedness due under this Indenture and the Securities or, in respect of Liens
on any Restricted Subsidiary's property or assets, any Subsidiary Guarantee of
such Restricted Subsidiary, equally and ratably with (or prior to in the case of
Liens with respect to Subordinated Obligations or Subsidiary Guarantor
Subordinated Obligations) the Indebtedness secured by such Lien for so long as
such Indebtedness is so secured.
SECTION 3.12. FUTURE SUBSIDIARY GUARANTORS. After the Issue Date, the
Company will cause each Restricted Subsidiary (other than (i) a Foreign
Subsidiary or (ii) a special purpose entity and/or limited partnership created
solely to Incur Indebtedness of the type specified in clause (b)(vii) under
SECTION 3.3 in connection with a Special Purpose Transaction or any special
purpose corporate general partner thereof) created or acquired by the Company,
including but not limited to Bertucci's, Inc. and its subsidiaries, to execute
and deliver to the Trustee a Subsidiary Guarantee pursuant to which such
Subsidiary Guarantor will unconditionally Guarantee, on a joint and several
basis, the full and prompt payment of the principal of, premium, if any and
interest on the Securities on a senior unsecured basis.
SECTION 3.13. MAINTENANCE OF OFFICE OR AGENCY.
The Company will maintain in The City of New York, an office or agency
where the Securities may be presented or surrendered for payment, where, if
applicable, the Securities may be surrendered for registration of transfer or
exchange and where notices and demands to or upon the Company in respect of the
Securities and this Indenture may be served. The principal corporate trust
office (the "CORPORATE TRUST OFFICE") of the Trustee shall be such office or
agency of the Company, unless the Company shall designate and maintain some
other office or agency for one or more of such purposes. The Company will give
prompt written notice to the Trustee of any change in the location of any such
office or agency. If at any time the Company shall fail to maintain any such
required office or agency or shall fail to furnish the Trustee with the address
thereof, such presentations, surrenders, notices and demands may be made or
served at the Corporate Trust Office of the Trustee, and the Company hereby
appoints the Trustee as its agent to receive all such presentations, surrenders,
notices and demands.
<PAGE>
The Company may also from time to time designate one or more other
offices or agencies (in or outside of The City of New York) where the Securities
may be presented or surrendered for any or all such purposes and may from time
to time rescind any such designation; PROVIDED, HOWEVER, that no such
designation or rescission shall in any manner relieve the Company of its
obligation to maintain an office or agency in The City of New York for such
purposes. The Company will give prompt written notice to the Trustee of any such
designation or rescission and any change in the location of any such other
office or agency.
SECTION 3.14. CORPORATE EXISTENCE.
Subject to ARTICLE IV and SECTION 10.2, the Company will do or cause
to be done all things necessary to preserve and keep in full force and effect
the corporate existence and that of each Restricted Subsidiary and the corporate
rights (charter and statutory) licenses and franchises of the Company and each
Restricted Subsidiary; PROVIDED, HOWEVER, that the Company shall not be required
to preserve any such existence (except of the Company), right, license or
franchise if the Board of Directors of the Company shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Company and each of its Restricted Subsidiaries, taken as a whole, and that
the loss thereof is not, and will not be, disadvantageous in any material
respect to the Holders.
SECTION 3.15. PAYMENT OF TAXES AND OTHER CLAIMS.
The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (i) all material taxes, assessments and
governmental charges levied or imposed upon the Company or any Subsidiary or
upon the income, profits or property of the Company or any Subsidiary and (ii)
all lawful claims for labor, materials and supplies, which, if unpaid, might by
law become a material liability or lien upon the property of the Company or any
Restricted Subsidiary; PROVIDED, HOWEVER, that the Company shall not be required
to pay or discharge or cause to be paid or discharged any such tax, assessment,
charge or claim whose amount, applicability or validity is being contested in
good faith by appropriate proceedings and for which appropriate reserves, if
necessary (in the good faith judgment of management of the Company), are being
maintained in accordance with GAAP or where the failure to effect such payment
will not be disadvantageous to the Holders.
SECTION 3.16. COMPLIANCE CERTIFICATE. The Company shall deliver to the
Trustee within 120 days after the end of each fiscal year of the Company an
Officers' Certificate stating that in the course of the performance by the
signers of their duties as Officers of the Company they would normally have
knowledge of any Default or Event of Default and whether or not the signers know
of any Default or Event of Default that occurred during such period. If they do,
the certificate shall describe the Default or Event of Default, its status and
what action the Company is taking or proposes to take with respect thereto. The
Company also shall comply with TIA ss. 314(a)(4).
SECTION 3.17. FURTHER INSTRUMENTS AND ACTS. Upon request of the
Trustee, the Company will execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
ARTICLE IV
SUCCESSOR COMPANY
<PAGE>
SECTION 4.1. MERGER AND CONSOLIDATION. The Company will not
consolidate with or merge with or into, or convey, transfer or lease all or
substantially all its assets to, any Person, unless:
(i) (A) the resulting, surviving or transferee Person (the "SUCCESSOR
COMPANY") will be a corporation, partnership, trust, limited liability
company or other similar entity organized and existing under the laws of
the United States of America, any State thereof or the District of
Columbia, (B) the Successor Company (if not the Company) will expressly
assume, by supplemental indenture, executed and delivered to the Trustee,
in form satisfactory to the Trustee, all the obligations of the Company
under the Securities and this Indenture, and (C) the Subsidiary Guarantees
will remain in effect after any such merger or consolidation;
(ii) immediately after giving effect to such transaction (and treating
any Indebtedness that becomes an obligation of the Successor Company or any
Subsidiary of the Successor Company as a result of such transaction as
having been Incurred by the Successor Company or such Subsidiary at the
time of such transaction), no Default or Event of Default shall have
occurred and be continuing;
(iii) immediately after giving effect to such transaction, the
Successor Company would be able to Incur at least an additional $1.00 of
Indebtedness pursuant to paragraph (a) of SECTION 3.3 of this Indenture;
and
(iv) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that such consolidation, merger or
transfer and such supplemental indenture (if any) comply with this
Indenture.
The Successor Company will succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Indenture, but, in the
case of a lease of all or substantially all its assets, the Company will not be
released from the obligation to pay the principal of and interest on the
Securities.
Notwithstanding the foregoing clauses (ii) and (iii) of this SECTION
4.1: (x) any Restricted Subsidiary of the Company may consolidate with, merge
into or transfer all or part of its properties and assets to the Company and (y)
the Company may merge with an Affiliate incorporated solely for the purpose of
reincorporating the Company in another jurisdiction to realize tax or other
benefits.
ARTICLE V
REDEMPTION OF SECURITIES
SECTION 5.1. OPTIONAL REDEMPTION. The Securities may or shall, as the
case may be, be redeemed, as a whole or from time to time in part, subject to
the conditions and at the Redemption Prices specified in the form of Securities
set forth in EXHIBITS A AND B hereto, which are hereby incorporated by reference
and made a part of this Indenture, together with accrued and unpaid interest to
the redemption date.
SECTION 5.2. ESCROW ACCOUNT; SPECIAL MANDATORY REDEMPTION.
(a) On or before the Issue Date, the Trustee will establish a
non-interest bearing escrow account (the "ESCROW ACCOUNT") which shall be
maintained in accordance with the terms and conditions of this SECTION 5.2.
<PAGE>
(b) The Company will cause the net proceeds from the issuance of the
Initial Securities to be deposited in the Escrow Account on the Issue Date. Such
net proceeds shall be disbursed from the Escrow Account only in accordance with
the terms and conditions of this SECTION 5.2.
(c) If a Special Redemption Event shall occur, then:
(i) The Company shall promptly notify the Trustee in writing that
such Special Redemption Event has occurred and, in such notice, shall specify a
Business Day occurring no less than 5 and no more than 15 Business Days after
the date such notice is given as the "SPECIAL REDEMPTION DATE";
(ii) The Trustee, in the Company's name and at the Company's
expense, shall thereafter promptly give notice to the Holders indicating (1)
that a Special Redemption Event has occurred, (2) the date fixed as the Special
Redemption Date, (3) that all of the Initial Securities are to be redeemed, (4)
that the redemption price for the Initial Securities shall equal the principal
amount thereof, plus accrued and unpaid interest, if any, to the Special
Redemption Date (collectively, the "SPECIAL REDEMPTION PRICE"), (5) that on the
Special Redemption Date, the Special Redemption Price will become due and
payable upon each Initial Security and, unless the Company defaults in paying or
providing for the Special Redemption Price, interest on the Initial Securities
will cease to accrue on and after said date, (6) the place or places where the
Initial Securities are to be surrendered for payment of the Special Redemption
Price, (7) the name and address of the Paying Agent, (8) that the Initial
Securities must be surrendered to the Paying Agent to collect the Special
Redemption Price, (9) the CUSIP number, and that no representation is made as to
the accuracy or correctness of the CUSIP number, if any, listed in such notice
or printed on the Initial Securities, and (10) the paragraph of the Initial
Securities pursuant to which such Initial Securities are to be redeemed;
(iii) Prior to the Special Redemption Date, the Company shall
deposit into the Escrow Account additional funds so that, after giving effect to
such deposit, the total amount of funds in the Escrow Account on the Special
Redemption Date shall be equal at least to the Special Redemption Price for the
Initial Securities; and
(iv) If the total amount in the Escrow Account on or after the
Special Redemption Date exceeds the amount of the Special Redemption Price, such
excess amounts shall be paid to the Company in accordance with its written
instructions.
(d) If the closing of the Acquisition occurs on or before July 31,
1998, then:
(i) the Company will give the Trustee, on the date of such
closing (the "ACQUISITION CLOSING DATE"), an Officers' Certificate stating that
all conditions to the consummation of the Acquisition have been satisfied or
waived and that the Acquisition is to be consummated on such Acquisition Closing
Date, subject only to the release of the funds from the Escrow Account in
accordance with SECTION 5.2(D)(III);
(ii) the Company will give written payment instructions to the
Trustee (the "ESCROW PAYMENT INSTRUCTIONS"), indicating that the funds in the
Escrow Account are to be released concurrently with such closing and indicating
the Person or Persons to which such funds should be disbursed, together with any
wire transfer or other information necessary to effect such disbursement; and
(iii) on the Acquisition Closing Date, the Trustee shall disburse
<PAGE>
the funds from the Escrow Account in accordance with the Escrow Payment
Instructions.
(e) To secure the Company's obligation to pay the Special Redemption
Price in connection with the occurrence of a Special Redemption Event, the
Company hereby grants to the Trustee, for the benefit of the Holders of the
Initial Securities, a security interest in, Lien on and pledge of all the funds
from time to time held in the Escrow Account, all rights of the Company in and
to such funds and the Escrow Account and all proceeds of the foregoing
(collectively, the "ESCROW COLLATERAL"). The Company acknowledges that the
Trustee, on behalf of the Holders of the Initial Securities, shall, with respect
to the Escrow Collateral, have all of the rights of a secured party under the
New York Uniform Commercial Code.
(f) Immediately following disbursement of all funds from the Escrow
Account pursuant to either SECTION 5.02(C) or 5.02(D), the Escrow Account shall
be closed and cease to exist.
(g) As used herein, the term "SPECIAL REDEMPTION EVENT" means either
(i) the Merger Agreement has been terminated or (ii) the Acquisition has not
been consummated on or before July 31, 1998.
SECTION 5.3. APPLICABILITY OF ARTICLE. Redemption of Securities at the
election of the Company or otherwise, as permitted or required by any provision
of this Indenture, shall be made in accordance with such provision and this
Article.
SECTION 5.4. ELECTION TO REDEEM; NOTICE TO TRUSTEE. The election of
the Company to redeem any Securities pursuant to SECTION 5.1 shall be evidenced
by a Board Resolution. In case of any redemption at the election of the Company,
the Company shall, upon not less than 45 and not more than 60 days prior to the
Redemption Date fixed by the Company (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee of such Redemption Date and of
the principal amount of Securities to be redeemed and shall deliver to the
Trustee such documentation and records as shall enable the Trustee to select the
Securities to be redeemed pursuant to SECTION 5.4.
SECTION 5.5. SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED. If
less than all the Securities are to be redeemed at any time pursuant to an
optional redemption, the particular Securities to be redeemed shall be selected
not more than 60 days prior to the Redemption Date by the Trustee, from the
outstanding Securities not previously called for redemption, in compliance with
the requirements of the principal securities exchange, if any, on which such
Securities are listed, or, if such Securities are not so listed, on a PRO RATA
basis, by lot or by such other method as the Trustee shall deem fair and
appropriate (and in such manner as complies with applicable legal requirements)
and which may provide for the selection for redemption of portions of the
principal of the Securities; PROVIDED, HOWEVER, that no such partial redemption
shall reduce the portion of the principal amount of a Security not redeemed to
less than $1,000.
The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption and, in the case of any Securities selected
for partial redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to redemption of Securities shall relate, in
the case of any Security redeemed or to be redeemed only in part, to the portion
of the principal amount of such Security which has been or is to be redeemed.
<PAGE>
SECTION 5.6. NOTICE OF REDEMPTION. Except in the case of a Special
Mandatory Redemption (which is governed by the terms and conditions of SECTION
5.2), notice of redemption shall be given in the manner provided for in SECTION
11.2 not less than 30 nor more than 60 days prior to the Redemption Date, to
each Holder of Securities to be redeemed. The Trustee shall give notice of
redemption in the Company's name and at the Company's expense; PROVIDED,
HOWEVER, that the Company shall deliver to the Trustee (except in the case of a
Special Mandatory Redemption), at least 45 days prior to the Redemption Date, an
Officers' Certificate requesting that the Trustee give such notice and setting
forth the information to be stated in such notice as provided in the following
items.
All notices of redemption (except for a notice delivered pursuant to
SECTION 5.2) shall state:
(1) the Redemption Date,
(2) the Redemption Price and the amount of accrued interest to the
Redemption Date payable as provided in SECTION 5.7, if any,
(3) if less than all outstanding Securities are to be redeemed, the
identification of the particular Securities (or portion thereof) to be
redeemed, as well as the aggregate principal amount of Securities to be
redeemed and the aggregate principal amount of Securities to be Outstanding
after such partial redemption,
(4) in case any Security is to be redeemed in part only, the notice
which relates to such Security shall state that on and after the Redemption
Date, upon surrender of such Security, the Holder will receive, without
charge, a new Security or Securities of authorized denominations for the
principal amount thereof remaining unredeemed,
(5) that on the Redemption Date the Redemption Price (and accrued
interest, if any, to the Redemption Date payable as provided in SECTION
5.7) will become due and payable upon each such Security, or the portion
thereof, to be redeemed, and, unless the Company defaults in making the
redemption payment, that interest on Securities called for redemption (or
the portion thereof) will cease to accrue on and after said date,
(6) the place or places where such Securities are to be surrendered
for payment of the Redemption Price and accrued interest, if any,
(7) the name and address of the Paying Agent,
(8) that Securities called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price,
(9) the CUSIP number, and that no representation is made as to the
accuracy or correctness of the CUSIP number, if any, listed in such notice
or printed on the Securities, and
(10) the paragraph of the Securities pursuant to which the Securities
are to be redeemed.
SECTION 5.7. DEPOSIT OF REDEMPTION PRICE. Except in the case of a
Special Mandatory Redemption (which is governed by the terms and conditions of
SECTION 5.2), prior to 10:00 a.m., New York City time on any Redemption Date,
the Company shall deposit with the Trustee or with a Paying Agent (or, if the
Company is acting as its own Paying Agent, segregate and hold in trust as
provided in SECTION 2.4) an amount of money sufficient to pay the Redemption
<PAGE>
Price of, and accrued interest on, all the Securities which are to be redeemed
on that date.
SECTION 5.8. SECURITIES PAYABLE ON REDEMPTION DATE. Notice of
redemption having been given as aforesaid, the Securities so to be redeemed
shall, on the Redemption Date, become due and payable at the Redemption Price
therein specified (together with accrued interest, if any, to the Redemption
Date), and from and after such date (unless the Company shall default in the
payment of the Redemption Price and accrued interest) such Securities shall
cease to bear interest. Upon surrender of any such Security for redemption in
accordance with said notice, such Security shall be paid by the Company at the
Redemption Price, together with accrued interest, if any, to the Redemption
Date; PROVIDED, HOWEVER, that installments of interest whose Stated Maturity is
on or prior to the Redemption Date shall be payable to the Holders of such
Securities, or one or more Predecessor Securities, registered as such at the
close of business on the relevant Regular Record Date or Special Record Date, as
the case may be, according to their terms and the provisions of SECTION 2.13.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the Redemption Date at the rate borne by the
Securities.
SECTION 5.9. SECURITIES REDEEMED IN PART.
Any Security which is to be redeemed only in part (pursuant to the
provisions of this Article) shall be surrendered at the office or agency of the
Company maintained for such purpose pursuant to SECTION 3.13 (with, if the
Company or the Trustee so requires, due endorsement by, or a written instrument
of transfer in form satisfactory to the Company and the Trustee duly executed
by, the Holder thereof or such Holder's attorney duly authorized in writing),
and the Company shall execute, and the Trustee shall authenticate and make
available for delivery to the Holder of such Security at the expense of the
Company, a new Security or Securities, of any authorized denomination as
requested by such Holder, in an aggregate principal amount equal to and in
exchange for the unredeemed portion of the principal of the Security so
surrendered, PROVIDED, that each such new Security will be in a principal amount
of $1,000 or integral multiple thereof.
SECTION 5.10. OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS. In
the event that, pursuant to Section 3.6 hereof, the Company shall be required to
commence an Asset Sale Offer, it shall follow the procedures specified below.
The Asset Sale Offer shall remain open for a period of 20 Business
Days following its commencement and no longer, except to the extent that a
longer period is required by applicable law (the "ASSET SALE OFFER PERIOD"). No
later than five Business Days after the termination of the Asset Sale Offer
Period (the "ASSET SALE OFFER PURCHASE DATE"), the Company shall purchase the
principal amount of Securities required to be purchased pursuant to Section 3.6
hereof (the "ASSET SALE OFFER AMOUNT") or, if less than the Asset Sale Offer
Amount has been tendered, all Securities tendered in response to the Asset Sale
Offer. Payment for any Securities so purchased shall be made in the same manner
as interest payments are made.
If the Asset Sale Offer Purchase Date is on or after an interest
record date and on or before the related interest payment date, any accrued and
unpaid interest shall be paid to the Person in whose name a Security is
registered at the close of business on such record date, and no additional
interest shall be payable to Holders who tender Securities pursuant to the Asset
Sale Offer.
<PAGE>
Upon the commencement of an Asset Sale Offer, the Company shall send,
by first class mail, a notice to the Trustee and each of the Holders. The notice
shall contain all instructions and materials necessary to enable such Holders to
tender Securities pursuant to the Asset Sale Offer. The Asset Sale Offer shall
be made to all Holders. The notice, which shall govern the terms of the Asset
Sale Offer, shall state:
(a) that the Asset Sale Offer is being made pursuant to this
Section 5.10 and Section 3.6 hereof and the length of time the Asset Sale
Offer shall remain open;
(b) the Asset Sale Offer Amount, the purchase price and the Asset
Sale Offer Purchase Date;
(c) that any Security not tendered or accepted for payment shall
continue to accrete or accrue interest;
(d) that, unless the Company defaults in making such payment, any
Security accepted for payment pursuant to the Asset Sale Offer shall cease
to accrete or accrue interest after the Asset Sale Offer Purchase Date;
(e) that Holders electing to have any Securities held by them
purchased pursuant to an Asset Sale Offer may only elect to have all of
such Securities purchased and may not elect to have only a portion of such
Security purchased;
(f) that Holders electing to have a Security purchased pursuant
to any Asset Sale Offer shall be required to surrender the Security, with
the form entitled "Option of Holder to Elect Purchase" on the reverse of
the Security completed, or transfer by book-entry transfer, to the Company,
a depositary, if appointed by the Company, or a Paying Agent at the address
specified in the notice at least three days before the Asset Sale Offer
Purchase Date;
(g) that Holders shall be entitled to withdraw their election if
the Company, the Depositary or the Paying Agent, as the case may be,
receives, not later than the expiration of the Asset Sale Offer Period, a
telegram, telex, facsimile transmission or letter setting forth the name of
the Holder, the principal amount of the Security the Holder delivered for
purchase and a statement that such Holder is withdrawing its election to
have such Security purchased;
(h) that, if the aggregate principal amount of Securities
surrendered by Holders exceeds the Asset Sale Offer Amount, the Company
shall select the Securities to be purchased on a PRO RATA basis (with such
adjustments as may be deemed appropriate by the Company so that only
Securities in denominations of $1,000, or integral multiples thereof, shall
be purchased); and
(i) that Holders whose Securities were purchased only in part
pursuant to paragraph (h) above shall be issued new Securities equal in
principal amount to the unpurchased portion of the Securities surrendered
(or transferred by book-entry transfer).
On or before the Asset Sale Offer Purchase Date, the Company shall, to
the extent lawful, accept for payment, on a PRO RATA basis to the extent
necessary, the Asset Sale Offer Amount of Securities or portions thereof
tendered pursuant to the Asset Sale Offer, or if less than the Asset Sale Offer
Amount has been tendered, all Securities tendered, and shall deliver to the
<PAGE>
Trustee an Officer's Certificate stating that such Securities or portions
thereof were accepted for payment by the Company in accordance with the terms of
this Section 5.10. The Company, the Depositary or the Paying Agent, as the case
may be, shall promptly (but in any case not later than five days after the Asset
Sale Offer Purchase Date) mail or deliver to each tendering Holder an amount
equal to the purchase price of the Securities tendered by such Holder and
accepted by the Company for purchase, and the Company shall promptly issue a new
Security, and the Trustee, upon written request from the Company shall
authenticate and mail or deliver such new Security to such Holder, in a
principal amount equal to any unpurchased portion of the Security surrendered.
Any Security not so accepted shall be promptly mailed or delivered by the
Company to the Holder thereof. The Company shall publicly announce the results
of the Asset Sale Offer on the Asset Sale Offer Purchase Date.
Other than as specifically provided in this Section 5.10, any purchase
pursuant to this Section 5.10 shall be made pursuant to the provisions of
Sections 5.1 and 5.3 through 5.9 hereof.
ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.1. EVENTS OF DEFAULT. An "Event of Default" occurs if:
(1) the Company defaults in any payment of interest on any Security
when the same becomes due and payable and such default continues for a
period of 30 days;
(2) the Company defaults in the payment of the principal or premium,
if any, of any Security when the same becomes due and payable at its Stated
Maturity, upon optional redemption, upon Special Mandatory Redemption, upon
required repurchase, upon declaration or otherwise;
(3) the Company fails to comply with ARTICLE IV of this Indenture;
(4) the Company fails to comply with any of SECTIONS 3.2, 3.3, 3.4,
3.5, 3.6, 3.7, 3.8, 3.9, 3.10, 3.11, 3.12, 3.13, 3.14 and 3.15 (in each
case other than a failure to repurchase Securities when required pursuant
to SECTIONS 3.6 or 3.9, which failure shall constitute an Event of Default
under SECTION 6.1(2)) and such failure continues for 30 days after the
notice specified below;
(5) the Company defaults in the performance of or breaches any
covenant or agreement in this Indenture or under the Securities (other than
those referred to in (1), (2), (3) or (4) above) and such default continues
for 60 days after the notice specified below;
(6) Indebtedness of the Company or any Restricted Subsidiary is not
paid within any applicable grace period after final maturity or is
accelerated by the holders thereof and the total amount of such unpaid or
accelerated Indebtedness exceeds $5.0 million or its foreign currency
equivalent at the time;
(7) the Company or a Significant Subsidiary pursuant to or within the
meaning of any Bankruptcy Law (as defined below):
(A) commences a voluntary case;
(B) consents to the entry of an order for relief against it in an
<PAGE>
involuntary case;
(C) consents to the appointment of a Custodian (as defined below)
of it or for any substantial part of its property; or
(D) makes a general assignment for the benefit of its creditors;
or takes any comparable action under any foreign laws relating to
insolvency;
(8) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(A) is for relief against the Company or any Significant
Subsidiary in an involuntary case;
(B) appoints a Custodian of the Company or any Significant
Subsidiary or for any substantial part of its property; or
(C) orders the winding up or liquidation of the Company or any
Significant Subsidiary;
or any similar relief is granted under any foreign laws and the order,
decree or relief remains unstayed and in effect for 60 days;
(9) any judgment or decree for the payment of money in excess of $5.0
million or its foreign currency equivalent at the time is rendered against
the Company or a Significant Subsidiary and such judgment or decree remains
undischarged or unstayed for a period of 60 days following such judgment or
decree becomes final and non-appealable; or
(10) the failure of any Subsidiary Guarantee by a Subsidiary Guarantor
(if any) to be in full force and effect (except as contemplated by the
terms of this Indenture) or the denial or disaffirmation by any such
Subsidiary Guarantor of its obligations under any Subsidiary Guarantee
(except as contemplated by the terms of this Indenture).
The foregoing will constitute Events of Default whatever the reason
for any such Event of Default and whether it is voluntary or involuntary or is
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body.
The term "BANKRUPTCY LAW" means Title 11, UNITED STATES CODE, or any
similar Federal or state law for the relief of debtors. The term "CUSTODIAN"
means any receiver, trustee, assignee, liquidator, custodian or similar official
under any Bankruptcy Law.
Notwithstanding the foregoing, a Default under clause (4) or (5) of
this SECTION 6.1 will not constitute an Event of Default until the Trustee
notifies the Company or the Holders of more than 25% in principal amount of the
then outstanding Securities notify the Company and the Trustee of the Default
and the Company does not cure such Default within the time specified in said
clause (4) or (5) after receipt of such notice. Such notice must specify the
Default, demand that it be remedied and state that such notice is a "Notice of
Default".
The Company shall deliver to the Trustee, within 30 days after the
occurrence thereof, written notice in the form of an Officers' Certificate of
any Default or Event of Default.
<PAGE>
SECTION 6.2. ACCELERATION. If an Event of Default (other than an Event
of Default specified in SECTION 6.1(7) or (8) with respect to the Company)
occurs and is continuing, the Trustee by notice to the Company, or the Holders
of at least 25% in outstanding principal amount of the Securities by notice to
the Company and the Trustee, may, and the Trustee at the request of such Holders
shall, declare the principal of, premium, if any, and accrued but unpaid
interest on all the Securities to be due and payable. Upon such a declaration,
such principal, premium and interest shall be immediately due and payable. In
the event of a declaration of acceleration because an Event of Default set forth
in SECTION 6.1(6) above has occurred and is continuing, such declaration of
acceleration shall be automatically rescinded and annulled if the event of
default or payment default triggering such Event of Default pursuant to SECTION
6.1(6) shall be remedied or cured by the Company and/or the relevant Restricted
Subsidiaries or waived by the holders of the relevant Indebtedness within 60
days after the declaration of acceleration with respect thereto and the Company
has paid all amounts due to the Trustee pursuant to SECTION 7.7. If an Event of
Default specified in SECTION 6.1(7) or (8) with respect to the Company occurs,
the principal of, premium and accrued and unpaid interest on all the Securities
will become and be immediately due and payable without any declaration or other
act on the part of the Trustee or any Holders. The Holders of a majority in
principal amount of the Securities by notice to the Trustee may waive all past
defaults (except with respect to nonpayment of principal, premium or interest)
and rescind an acceleration with respect to the Securities and its consequences
if (i) the rescission would not conflict with any judgment or decree of a court
of competent jurisdiction, (ii) all existing Events of Default, other than the
nonpayment of principal or interest that has become due solely because of such
acceleration, have been cured or waived and (iii) the Company has paid all
amounts due to the Trustee pursuant to SECTION 7.7. No such rescission shall
affect any subsequent Default or Event of Default or impair any right consequent
thereto.
SECTION 6.3. OTHER REMEDIES. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of principal of or interest on the Securities or to enforce the performance of
any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Securityholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative.
SECTION 6.4. WAIVER OF PAST DEFAULTS. Subject to SECTION 6.2, the
Holders of a majority in principal amount of the Securities by notice to the
Trustee may waive an existing Default or Event of Default and its consequences
except (i) a Default or Event of Default in the payment of the principal of or
interest on a Security or (ii) a Default or Event of Default in respect of a
provision that under SECTION 9.2 cannot be amended without the consent of each
Securityholder affected. When a Default or Event of Default is waived, it is
deemed cured, but no such waiver shall extend to any subsequent or other Default
or Event of Default or impair any consequent right.
SECTION 6.5. CONTROL BY MAJORITY. The Holders of a majority in
principal amount of the Securities may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee. However, the Trustee may
refuse to follow any direction that conflicts with law or this Indenture or,
subject to SECTIONS 7.1 AND 7.2, that the Trustee determines is unduly
<PAGE>
prejudicial to the rights of other Securityholders or would involve the Trustee
in personal liability; PROVIDED, HOWEVER, that the Trustee may take any other
action deemed proper by the Trustee that is not inconsistent with such
direction. Prior to taking any action hereunder, the Trustee shall be entitled
to indemnification satisfactory to it in its sole discretion against all losses
and expenses caused by taking or not taking such action.
SECTION 6.6. LIMITATION ON SUITS. A Securityholder may not pursue any
remedy with respect to this Indenture or the Securities unless:
(1) the Holder gives to the Trustee written notice stating that an
Event of Default is continuing;
(2) the Holders of at least 25% in outstanding principal amount of the
Securities make a request to the Trustee to pursue the remedy;
(3) such Holder or Holders offer to the Trustee reasonable security or
indemnity against any loss, liability or expense (including reasonable
attorneys' fees and expenses);
(4) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer of security or indemnity; and
(5) the Holders of a majority in principal amount of the Securities do
not give the Trustee a direction inconsistent with the request during such
60-day period.
SECTION 6.7. RIGHTS OF HOLDERS TO RECEIVE PAYMENT. Notwithstanding any
other provision of this Indenture, the right of any Holder to receive payment of
principal of, premium (if any) or interest on the Securities held by such
Holder, on or after the respective due dates expressed in the Securities, or to
bring suit for the enforcement of any such payment on or after such respective
dates, shall not be impaired or affected without the consent of such Holder.
SECTION 6.8. COLLECTION SUIT BY TRUSTEE. If an Event of Default
specified in SECTION 6.1(1) or (2) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company for the whole amount then due and owing (together with interest on any
unpaid interest to the extent lawful) and the amounts provided for in SECTION
7.7.
SECTION 6.9. TRUSTEE MAY FILE PROOFS OF CLAIM. The Trustee may file
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee and the Securityholders
allowed in any judicial proceedings relative to the Company, its Subsidiaries or
its or their respective creditors or properties and, unless prohibited by law or
applicable regulations, may vote on behalf of the Holders in any election of a
trustee in bankruptcy or other Person performing similar functions, and any
Custodian in any such judicial proceeding is hereby authorized by each Holder to
make payments to the Trustee and, in the event that the Trustee shall consent to
the making of such payments directly to the Holders, to pay to the Trustee any
amount due it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and its counsel, and any other amounts due
the Trustee under SECTION 7.7.
Nothing herein shall be deemed to empower the Trustee to authorize or
consent to, or accept or adopt on behalf of any Holder, any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder, or to authorize the Trustee to vote in respect of
the claim of any Holder in any such proceedings.
<PAGE>
SECTION 6.10. PRIORITIES. If the Trustee collects any money or
property pursuant to this ARTICLE VI, it shall pay out the money or property in
the following order:
FIRST: to the Trustee for amounts due under SECTION 7.7;
SECOND: to Securityholders for amounts due and unpaid on the
Securities for principal and interest, ratably, without preference or priority
of any kind, according to the amounts due and payable on the Securities for
principal and interest, respectively; and
THIRD: to the Company.
The Trustee may fix a record date and payment date for any payment to
Securityholders pursuant to this Section. At least 15 days before such record
date, the Company shall mail to each Securityholder and the Trustee a notice
that states the record date, the payment date and amount to be paid.
SECTION 6.11. UNDERTAKING FOR COSTS. In any suit for the enforcement
of any right or remedy under this Indenture or in any suit against the Trustee
for any action taken or omitted by it as Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section does not apply to a suit by the
Trustee, a suit by the Company, a suit by a Holder pursuant to SECTION 6.7 or a
suit by Holders of more than 10% in outstanding principal amount of the
Securities.
ARTICLE VII
TRUSTEE
SECTION 7.1. DUTIES OF TRUSTEE. (a) If an Event of Default has
occurred and is continuing, the Trustee shall exercise the rights and powers
vested in it by this Indenture and use the same degree of care and skill in
their exercise as a prudent Person would exercise or use under the circumstances
in the conduct of such Person's own affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee undertakes to perform such duties and only such duties
as are specifically set forth in this Indenture and no implied covenants or
obligations shall be read into this Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However,
in the case of any such certificates or opinions which by any provisions
hereof are specifically required to be furnished to the Trustee, the
Trustee shall examine such certificates and opinions to determine whether
or not they conform to the requirements of this Indenture (but need not
confirm or investigate the accuracy of mathematical calculations or other
facts stated therein).
(c) The Trustee may not be relieved from liability for its own
<PAGE>
negligent action, its own negligent failure to act or its own wilful misconduct,
except that:
(1) this paragraph does not limit the effect of paragraph (b) of this
Section;
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Trust Officer unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to SECTION 6.5.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Company.
(f) Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.
(g) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur financial liability in the performance
of any of its duties hereunder or in the exercise of any of its rights or
powers, if it shall have reasonable grounds to believe that repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured to it.
(h) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section and to the provisions of the TIA.
(i) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
(j) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders unless such Holders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses (including
reasonable attorneys' fees and expenses) and liabilities that might be incurred
by it in compliance with such request or direction.
SECTION 7.2. RIGHTS OF TRUSTEE. Subject to SECTION 7.1, (a) The
Trustee may rely on any document believed by it to be genuine and to have been
signed or presented by the proper person. The Trustee need not investigate any
fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel. The Trustee shall not be liable
for any action it takes or omits to take in good faith in reliance on an
Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through its attorneys and agents and shall not
be responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee shall not be liable for any action it takes or omits
<PAGE>
to take in good faith which it believes to be authorized or within its rights or
powers; PROVIDED, however, that the Trustee's conduct does not constitute wilful
misconduct or negligence.
(e) The Trustee may consult with counsel of its selection, and the
advice or opinion of counsel with respect to legal matters relating to this
Indenture and the Securities shall be full and complete authorization and
protection from liability in respect to any action taken, omitted or suffered by
it hereunder in good faith and in accordance with the advice or opinion of such
counsel.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Holders pursuant to the provisions of this Indenture,
unless such Holders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which may be incurred
therein or thereby.
(g) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate (including any Officers'
Certificate), statement, instrument, opinion (including any Opinion of Counsel),
notice, request, direction, consent, order, bond, debenture, or other paper or
document, but the Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit and, if the Trustee
shall determine to make such further inquiry or investigation, it shall be
entitled, upon reasonable notice to the Company, to examine the books, records,
and premises of the Company, personally or by agent or attorney.
(h) The Trustee shall not be required to give any bond or surety in
respect of the performance of its powers and duties hereunder.
(i) The permissive rights of the Trustee to do things enumerated in
this Indenture shall not be construed as duties.
(j) The Trustee shall not be charged with knowledge of any Default or
Event of Default, of the identity of any Restricted Subsidiary or the existence
of any Change of Control or Asset Disposition unless either (i) a Trust Officer
shall have actual knowledge thereof or (ii) the Trustee shall have received
written notice thereof from the Company or any Holder.
SECTION 7.3. INDIVIDUAL RIGHTS OF TRUSTEE. The Trustee in its
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Company or its Affiliates with the same rights
it would have if it were not Trustee. Any Paying Agent, Registrar, co-registrar
or co-paying agent may do the same with like rights. However, the Trustee must
comply with SECTIONS 7.10 and 7.11.
SECTION 7.4. TRUSTEE'S DISCLAIMER. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture, any Subsidiary Guarantee or the Securities, it shall not be
accountable for the Company's use of the proceeds from the Securities, and it
shall not be responsible for any statement of the Company in this Indenture or
in any document issued in connection with the sale of the Securities or in the
Securities other than the Trustee's certificate of authentication.
SECTION 7.5. NOTICE OF DEFAULTS. If a Default or Event of Default
occurs and is continuing and if a Trust Officer has actual knowledge thereof,
the Trustee shall mail to each Securityholder notice of the Default or Event of
Default within 90 days after it occurs. Except in the case of a Default or Event
of Default in payment of principal of, premium (if any), or interest on any
<PAGE>
Security (including payments pursuant to the optional redemption or required
repurchase provisions of such Security, if any), the Trustee may withhold the
notice if and so long as its board of directors, a committee of its board of
directors or a committee of its Trust Officers in good faith determines that
withholding the notice is in the interests of Securityholders.
SECTION 7.6. REPORTS BY TRUSTEE TO HOLDERS. As promptly as
practicable after each April 15 beginning with the April 15 following the date
of this Indenture, and in any event prior to June 15 in each year, the Trustee
shall mail to each Securityholder a brief report dated as of such April 15 that
complies with TIA ss. 313(a). The Trustee also shall comply with TIA ss. 313(b).
The Trustee shall also transmit by mail all reports required by TIA ss. 313(c).
A copy of each report at the time of its mailing to Securityholders
shall be filed with the SEC and each stock exchange (if any) on which the
Securities are listed. The Company agrees to notify promptly the Trustee
whenever the Securities become listed on any stock exchange and of any delisting
thereof.
SECTION 7.7. COMPENSATION AND INDEMNITY. The Company shall pay to the
Trustee from time to time reasonable compensation for its acceptance of this
Indenture and services hereunder as the Company and the Trustee shall from time
to time agree in writing. The Trustee's compensation shall not be limited by any
law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee upon request for all reasonable out-of-- pocket expenses
incurred or made by it, including costs of collection, costs of preparing and
reviewing reports, certificates and other documents, costs of preparation and
mailing of notices to Securityholders and reasonable costs of counsel retained
by the Trustee in connection with the delivery of an Opinion of Counsel or
otherwise, in addition to the compensation for its services. Such expenses shall
include the reasonable compensation and expenses, disbursements and advances of
the Trustee's agents, counsel, accountants and experts. The Company shall
indemnify the Trustee against any and all loss, liability or expense (including
reasonable attorneys' fees and expenses) incurred by it without negligence or
bad faith on its part in connection with the administration of this trust and
the performance of its duties hereunder, including the costs and expenses of
enforcing this Indenture (including this SECTION 7.7) and of defending itself
against any claims (whether asserted by any Securityholder, the Company or
otherwise). The Trustee shall notify the Company promptly of any claim for which
it may seek indemnity. Failure by the Trustee to so notify the Company shall not
relieve the Company of its obligations hereunder. The Company shall defend the
claim and the Trustee may have separate counsel and the Company shall pay the
fees and expenses of such counsel provided that the Company shall not be
required to pay such fees and expenses if it assumes the Trustee's defense, and,
in the reasonable judgement of outside counsel to the Trustee, there is no
conflict of interest between the Company and the Trustee in connection with such
defense. The Company need not reimburse any expense or indemnify against any
loss, liability or expense incurred by the Trustee through the Trustee's own
wilful misconduct, negligence or bad faith.
To secure the Company's payment obligations in this Section, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee other than money or property held in trust to pay
principal of and interest on particular Securities. The Trustee's right to
receive payment of any amounts due under this SECTION 7.7 shall not be
subordinate to any other liability or indebtedness of the Company.
The Company's payment obligations pursuant to this Section shall
survive the resignation or removal of the Trustee and the discharge of this
Indenture. When the Trustee incurs expenses after the occurrence of a Default
<PAGE>
specified in SECTION 6.1(7) or (8) with respect to the Company, the expenses are
intended to constitute expenses of administration under any Bankruptcy Law.
SECTION 7.8. REPLACEMENT OF TRUSTEE. The Trustee may resign at any
time by so notifying the Company. The Holders of a majority in principal amount
of the Securities may remove the Trustee by so notifying the Trustee and may
appoint a successor Trustee. The Company shall remove the Trustee if:
(1) the Trustee fails to comply with SECTION 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the Trustee or
its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed by the Company or by the Holders
of a majority in principal amount of the Securities and such Holders do not
reasonably promptly appoint a successor Trustee, or if a vacancy exists in the
office of the Trustee for any reason (the Trustee in such event being referred
to herein as the retiring Trustee), the Company shall promptly appoint a
successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Securityholders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, subject to the lien
provided for in SECTION 7.7.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee or the Holders of
10% in principal amount of the Securities may petition, at the Company's
expense, any court of competent jurisdiction for the appointment of a successor
Trustee.
If the Trustee fails to comply with SECTION 7.10, any Securityholder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
Notwithstanding the replacement of the Trustee pursuant to this
Section, the Company's obligations under SECTION 7.7 shall continue for the
benefit of the retiring Trustee.
SECTION 7.9. SUCCESSOR TRUSTEE BY MERGER. If the Trustee consolidates
with, merges or converts into, or transfers all or substantially all its
corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee.
In case at the time such successor or successors by merger, conversion
or consolidation to the Trustee shall succeed to the trusts created by this
Indenture, any of the Securities shall have been authenticated but not
delivered, any such successor to the Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Securities so
authenticated; and in case at that time any of the Securities shall not have
been authenticated, any successor to the Trustee may authenticate such
<PAGE>
Securities either in the name of any predecessor hereunder or in the name of the
successor to the Trustee; and in all such cases such certificates shall have the
full force which it is anywhere in the Securities or in this Indenture provided
that the certificate of the Trustee shall have.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION. The Trustee shall at all
times satisfy the requirements of TIA ss. 310(a). The Trustee shall have a
combined capital and surplus of at least $100 million as set forth in its most
recent published annual report of condition. The Trustee shall comply with TIA
ss. 310(b); PROVIDED, HOWEVER, that there shall be excluded from the operation
of TIA ss. 310(b)(1) any indenture or indentures under which other securities or
certificates of interest or participation in other securities of the Company are
outstanding if the requirements for such exclusion set forth in TIA ss.
310(b)(1) are met.
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY. The
Trustee shall comply with TIA ss. 311(a), excluding any creditor relationship
listed in TIA ss. 311(b). A Trustee who has resigned or been removed shall be
subject to TIA ss. 311(a) to the extent indicated.
ARTICLE VIII
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.1. DISCHARGE OF LIABILITY ON SECURITIES; DEFEASANCE. (a)
When (i) the Company delivers to the Trustee all outstanding Securities (other
than Securities replaced pursuant to SECTION 2.9) for cancellation or (ii) all
outstanding Securities have become due and payable, whether at maturity or upon
redemption and the Company irrevocably deposits with the Trustee funds
sufficient to pay at maturity or upon redemption all outstanding Securities
(other than Securities replaced pursuant to SECTION 2.9), including interest
thereon to maturity or such Redemption Date, and if in either case the Company
pays all other sums payable hereunder by the Company, then this Indenture shall,
subject to SECTION 8.1(C), cease to be of further effect. The Trustee shall
acknowledge satisfaction and discharge of this Indenture on demand of the
Company (accompanied by an Officers' Certificate and an Opinion of Counsel
stating that all conditions precedent specified herein relating to the
satisfaction and discharge of this Indenture have been complied with) and at the
cost and expense of the Company.
(b) Subject to SECTIONS 8.1(C) and 8.2, the Company at any time may
terminate (i) all its obligations under the Securities and this Indenture
("LEGAL DEFEASANCE OPTION"), and after giving effect to such legal defeasance,
any omission to comply with such obligations shall no longer constitute a
Default or Event of Default or (ii) its obligations under SECTIONS 3.2, 3.3,
3.4, 3.5, 3.6, 3.7, 3.8, 3.9, 3.10, 3.11, 3.12, 3.13, 3.14, 3.15 and 4.1(III)
and the Company may omit to comply with and shall have no liability in respect
of any term, condition or limitation set forth in any such covenant, whether
directly or indirectly, by reason of any reference elsewhere herein to any such
covenant or by reason of any reference in any such covenant to any other
provision herein or in any other document and such omission to comply shall no
longer constitute a Default or an Event of Default under SECTION 6.1(3) and
6.1(4) ("COVENANT DEFEASANCE OPTION"), but except as specified above, the
remainder of this Indenture and the Securities shall be unaffected thereby. The
Company may exercise its legal defeasance option notwithstanding its prior
exercise of its covenant defeasance option. If the Company exercises its
covenant defeasance option, the Company may, by written notice to the Trustee
prior to the delivery of the Opinion of Counsel referred to in SECTION 8.2(8),
elect to have any Subsidiary Guarantees in effect at such time terminate.
<PAGE>
If the Company exercises its legal defeasance option, payment of the
Securities may not be accelerated because of any event that, in the absence of
such legal defeasance, would have constituted an Event of Default, and the
Subsidiary Guarantees in effect at such time shall terminate. If the Company
exercises its covenant defeasance option, the events specified in SECTIONS
6.1(4), 6.1(6), 6.1(7) (but only with respect to a Significant Subsidiary),
6.1(8) (but only with respect to a Significant Subsidiary), 6.1(9) and 6.1(10)
will no longer constitute an Event of Default, and payment of the Securities may
not be accelerated because of the occurrence of any such event or because of the
failure of the Company to comply with SECTIONS 4.1(III).
Upon satisfaction of the conditions set forth herein and upon request
of the Company, the Trustee shall acknowledge in writing the discharge of those
obligations that the Company terminates.
(c) Notwithstanding the provisions of SECTIONS 8.1(A) and (B), the
Company's obligations in SECTIONS 2.3, 2.4, 2.5, 2.6, 2.7, 2.9, 7.7, 7.8, 8.4,
8.5 and 8.6 shall survive until the Securities have been paid in full.
Thereafter, the Company's obligations in SECTIONS 7.7, 8.4 and 8.5 shall
survive.
SECTION 8.2. CONDITIONS TO DEFEASANCE. The Company may exercise its
legal defeasance option or its covenant defeasance option only if:
(1) the Company irrevocably deposits in trust with the Trustee for the
benefit of the Holders money in U.S. dollars or U.S. Government Obligations
or a combination thereof for the payment of principal of and interest on
the Securities to maturity or redemption, as the case may be;
(2) the Company delivers to the Trustee a certificate from a
nationally recognized firm of independent accountants expressing their
opinion that the payments of principal and interest when due and without
reinvestment on the deposited U.S. Government Obligations plus any
deposited money without investment will provide cash at such times and in
such amounts as will be sufficient to pay principal and interest when due
on all the Securities to maturity;
(3) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of
Default with respect to this Indenture resulting from the incurrence of
Indebtedness, all or a portion of which will be used to defease the
Securities concurrently with such incurrence);
(4) such legal defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a Default under, this Indenture or
any other material agreement or instrument to which the Company or any of
its Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound;
(5) the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that (A) the Securities and (B) assuming no
intervening bankruptcy of the Company between the date of deposit and the
91st day following the deposit and that no Holder of the Securities is an
insider of the Company, after 91st day following the deposit, the trust
funds will not be subject to the effect of any applicable bankruptcy,
insolvency, reorganization or similar laws affecting creditors' right
generally;
(6) the deposit does not constitute a default under any other
<PAGE>
agreement binding on the Company;
(7) the Company delivers to the Trustee an Opinion of Counsel to the
effect that the trust resulting from the deposit does not constitute, or is
qualified as, a regulated investment company under the Investment Company
Act of 1940;
(8) in the case of the legal defeasance option, the Company shall have
delivered to the Trustee an Opinion of Counsel stating that (i) the Company
has received from, or there has been published by, the Internal Revenue
Service a ruling, or (ii) since the date of this Indenture there has been a
change in the applicable federal income tax law, in either case to the
effect that, and based thereon such Opinion of Counsel shall confirm that,
the Securityholders will not recognize income, gain or loss for federal
income tax purposes as a result of such defeasance and will be subject to
federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such legal defeasance had not
occurred;
(9) in the case of the covenant defeasance option, the Company shall
have delivered to the Trustee an Opinion of Counsel in the United States to
the effect that the Securityholders will not recognize income, gain or loss
for federal income tax purposes as a result of such covenant defeasance and
will be subject to federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such covenant
defeasance had not occurred; and
(10) the Company delivers to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that all conditions precedent to the
defeasance and discharge of the Securities and this Indenture as
contemplated by this ARTICLE VIII have been complied with.
SECTION 8.3. APPLICATION OF TRUST MONEY. The Trustee shall hold in
trust money or U.S. Government Obligations deposited with it pursuant to this
ARTICLE VIII. It shall apply the deposited money and the money from U.S.
Government Obligations through the Paying Agent and in accordance with this
Indenture to the payment of principal of and interest on the Securities.
SECTION 8.4. REPAYMENT TO COMPANY. The Trustee and the Paying Agent
shall promptly turn over to the Company upon request any excess money or
securities held by them upon payment of all the obligations under this
Indenture.
Subject to any applicable abandoned property law, the Trustee and the
Paying Agent shall pay to the Company upon request any money held by them for
the payment of principal of or interest on the Securities that remains unclaimed
for two years, and, thereafter, Securityholders entitled to the money must look
to the Company for payment as general creditors.
SECTION 8.5. INDEMNITY FOR U.S. GOVERNMENT OBLIGATIONS. The Company
shall pay and shall indemnify the Trustee against any tax, fee or other charge
imposed on or assessed against deposited U.S. Government Obligations or the
principal and interest received on such U.S. Government Obligations.
SECTION 8.6. REINSTATEMENT. If the Trustee or Paying Agent is unable
to apply any money or U.S. Government Obligations in accordance with this
ARTICLE VIII by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the obligations of the Company under
this Indenture and the Securities, and the obligations of the Subsidiary
<PAGE>
Guarantors under the Subsidiary Guarantees, shall be revived and reinstated as
though no deposit had occurred pursuant to this ARTICLE VIII until such time as
the Trustee or Paying Agent is permitted to apply all such money or U.S.
Government Obligations in accordance with this ARTICLE VIII; PROVIDED, HOWEVER,
that, if the Company has made any payment of interest on or principal of any
Securities because of the reinstatement of its obligations, the Company shall be
subrogated to the rights of the Holders of such Securities to receive such
payment from the money or U.S. Government Obligations held by the Trustee or
Paying Agent.
ARTICLE IX
AMENDMENTS
SECTION 9.1. WITHOUT CONSENT OF HOLDERS. The Company, the Subsidiary
Guarantors and the Trustee may amend this Indenture, the Subsidiary Guarantees
or the Securities without notice to or consent of any Securityholder:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with ARTICLE IV in respect of the assumption by a
Successor Company of an obligation of the Company under this Indenture;
(3) to provide for uncertificated Securities in addition to or in
place of certificated Securities; PROVIDED, HOWEVER, that the
uncertificated Securities are issued in registered form for purposes of
Section 163(f) of the Code or in a manner such that the uncertificated
Securities are described in Section 163(f)(2)(B) of the Code;
(4) to add guarantees with respect to the Securities or to secure the
Securities;
(5) to add to the covenants of the Company for the benefit of the
Holders or to surrender any right or power herein conferred upon the
Company;
(6) to comply with any requirements of the SEC in connection with
qualifying this Indenture under the TIA;
(7) to make any change that does not adversely affect the rights of
any Securityholder; or
(8) to provide for the issuance of the Exchange Securities, which will
have terms substantially identical in all material respects to the Initial
Securities (except that the transfer restrictions contained in the Initial
Securities will be modified or eliminated, as appropriate), and which will
be treated, together with any outstanding Initial Securities, as a single
issue of securities.
After an amendment under this Section becomes effective, the Company
shall mail to Securityholders a notice briefly describing such amendment. The
failure to give such notice to all Securityholders, or any defect therein, shall
not impair or affect the validity of an amendment under this Section.
SECTION 9.2. WITH CONSENT OF HOLDERS. The Company, the Subsidiary
Guarantors and the Trustee may amend this Indenture, the Subsidiary Guarantees
or the Securities without notice to any Securityholder but with the written
consent of the Holders of at least a majority in principal amount of the
Securities. However, without the consent of each Securityholder affected, an
<PAGE>
amendment may not:
(1) reduce the amount of Securities whose Holders must consent to an
amendment;
(2) reduce the rate of or extend the time for payment of interest on
any Security;
(3) reduce the principal of or extend the Stated Maturity of any
Security;
(4) reduce the premium payable upon the redemption or repurchase of
any Security or change the time at which any Security may or shall be
redeemed or repurchased in accordance with this Indenture;
(5) make any Security payable in money other than that stated in the
Security;
(6) impair the right of any Holder to receive payment of principal of
and interest on such Holder's Securities on or after the due dates therefor
or to institute suit for the enforcement of any payment on or with respect
to such Holder's Securities;
(7) make any change to the amendment provisions which require each
Holder's consent or to the waiver provisions.
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment, but it shall
be sufficient if such consent approves the substance thereof.
After an amendment under this Section becomes effective, the Company
shall mail to Securityholders a notice briefly describing such amendment. The
failure to give such notice to all Securityholders, or any defect therein, shall
not impair or affect the validity of an amendment under this Section.
SECTION 9.3. COMPLIANCE WITH TRUST INDENTURE ACT. Every amendment to
this Indenture or the Securities shall comply with the TIA as then in effect.
SECTION 9.4. REVOCATION AND EFFECT OF CONSENTS AND WAIVERS. A consent
to an amendment or a waiver by a Holder of a Security shall bind the Holder and
every subsequent Holder of that Security or portion of the Security that
evidences the same debt as the consenting Holder's Security, even if notation of
the consent or waiver is not made on the Security. However, any such Holder or
subsequent Holder may revoke the consent or waiver as to such Holder's Security
or portion of the Security if the Trustee receives the notice of revocation
before the date the amendment or waiver becomes effective. After an amendment or
waiver becomes effective, it shall bind every Securityholder. An amendment or
waiver shall become effective upon receipt by the Trustee of the requisite
number of written consents under SECTION 9.1 or 9.2 as applicable.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Securityholders entitled to give their consent or
take any other action described above or required or permitted to be taken
pursuant to this Indenture. If a record date is fixed, then notwithstanding the
immediately preceding paragraph, those Persons who were Securityholders at such
record date (or their duly designated proxies), and only those Persons, shall be
entitled to give such consent or to revoke any consent previously given or to
take any such action, whether or not such Persons continue to be Holders after
such record date. No such consent shall become valid or effective more than 120
days after such record date.
<PAGE>
SECTION 9.5. NOTATION ON OR EXCHANGE OF SECURITIES. If an amendment
changes the terms of a Security, the Trustee may require the Holder of the
Security to deliver it to the Trustee. The Trustee may place an appropriate
notation on the Security regarding the changed terms and return it to the
Holder. Alternatively, if the Company or the Trustee so determines, the Company
in exchange for the Security shall issue and the Trustee shall authenticate a
new Security that reflects the changed terms. Failure to make the appropriate
notation or to issue a new Security shall not affect the validity of such
amendment.
SECTION 9.6. TRUSTEE TO SIGN AMENDMENTS. The Trustee shall sign any
amendment authorized pursuant to this ARTICLE IX if the amendment does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may but need not sign it. In signing such amendment the
Trustee shall be entitled to receive indemnity reasonably satisfactory to it and
to receive, and (subject to SECTIONS 7.1 AND 7.2) shall be fully protected in
relying upon, an Officers' Certificate and an Opinion of Counsel complying with
SECTION 11.5 and stating that such amendment is authorized or permitted by this
Indenture.
ARTICLE X
GUARANTEE
SECTION 10.1. GUARANTEE. Each Subsidiary Guarantor hereby fully,
unconditionally and irrevocably guarantees, as primary obligor and not merely as
surety, jointly and severally with each other Subsidiary Guarantor, to each
Holder of the Securities and to the Trustee the full and punctual payment when
due, whether at maturity, by acceleration, by redemption or otherwise, of the
principal of, premium, if any, and interest on the Securities and all other
amounts payable under the Indenture (all the foregoing being hereinafter
collectively called the "OBLIGATIONS"). Each Subsidiary Guarantor further agrees
(to the extent permitted by law) that the Obligations may be extended or
renewed, in whole or in part, without notice or further assent from it, and that
it will remain bound under this ARTICLE X notwithstanding any extension or
renewal of any Obligation.
Each Subsidiary Guarantor waives presentation to, demand of payment
from and protest to the Company of any of the Obligations and also waives notice
of protest for nonpayment. Each Subsidiary Guarantor waives notice of any
default under the Securities or the Obligations. The obligations of each
Subsidiary Guarantor hereunder shall not be affected by (a) the failure of any
Holder to assert any claim or demand or to enforce any right or remedy against
the Company or any other Person under this Indenture, the Securities or any
other agreement or otherwise; (b) any extension or renewal of any thereof; (c)
any rescission, waiver, amendment or modification of any of the terms or
provisions of this Indenture, the Securities or any other agreement; (d) the
release of any security held by any Holder or the Trustee for the Obligations or
any of them; (e) the failure of any Holder to exercise any right or remedy
against any other Subsidiary Guarantor; or (f) any change in the ownership of
the Company.
Each Subsidiary Guarantor further agrees that its Subsidiary Guarantee
herein constitutes a Guarantee of payment when due (and not a Guarantee of
collection) and waives any right to require that any resort be had by any Holder
to any security held for payment of the Obligations.
The obligations of each Subsidiary Guarantor hereunder shall not be
<PAGE>
subject to any reduction, limitation, impairment or termination for any reason
(other than payment of the Obligations in full), including any claim of waiver,
release, surrender, alteration or compromise, and shall not be subject to any
defense of setoff, counterclaim, recoupment or termination whatsoever or by
reason of the invalidity, illegality or unenforceability of the Obligations or
otherwise. Without limiting the generality of the foregoing, the obligations of
each Subsidiary Guarantor herein shall not be discharged or impaired or
otherwise affected by the failure of any Holder to assert any claim or demand or
to enforce any remedy under this Indenture, the Securities or any other
agreement, by any waiver or modification of any thereof, by any default, failure
or delay, willful or otherwise, in the performance of the Obligations, or by any
other act or thing or omission or delay to do any other act or thing which may
or might in any manner or to any extent vary the risk of any Subsidiary
Guarantor or would otherwise operate as a discharge of such Subsidiary Guarantor
as a matter of law or equity.
Each Subsidiary Guarantor further agrees that its Subsidiary Guarantee
shall continue to be effective or be reinstated, as the case may be, if at any
time payment, or any part thereof, of principal of or interest on any of the
Obligations is rescinded or must otherwise be restored by any Holder upon the
bankruptcy or reorganization of the Company or otherwise.
In furtherance of the foregoing and not in limitation of any other
right which any Holder has at law or in equity against any Subsidiary Guarantor
by virtue hereof, upon the failure of the Company to pay any of the Obligations
when and as the same shall become due, whether at maturity, by acceleration, by
redemption or otherwise, each Subsidiary Guarantor hereby promises to and will,
upon receipt of written demand by the Trustee, forthwith pay, or cause to be
paid, in cash, to the Holders an amount equal to the sum of (i) the unpaid
amount of such Obligations then due and owing and (ii) accrued and unpaid
interest on such Obligations then due and owing (but only to the extent not
prohibited by law).
Each Subsidiary Guarantor further agrees that, as between such
Subsidiary Guarantor, on the one hand, and the Holders, on the other hand, (x)
the maturity of the Obligations guaranteed hereby may be accelerated as provided
in this Indenture for the purposes of its Subsidiary Guarantee, notwithstanding
any stay, injunction or other prohibition preventing such acceleration in
respect of the Obligations guaranteed hereby and (y) in the event of any such
declaration of acceleration of such Obligations, such Obligations (whether or
not due and payable) shall forthwith become due and payable by the Subsidiary
Guarantor for the purposes of its Subsidiary Guarantee.
Each Subsidiary Guarantor also agrees to pay any and all reasonable
costs and expenses (including reasonable attorneys' fees) incurred by the
Trustee or the Holders in enforcing any rights under this Section.
SECTION 10.2. LIMITATION ON LIABILITY; TERMINATION, RELEASE AND
Discharge. The obligations of each Subsidiary Guarantor hereunder will be
limited to the maximum amount as will, after giving effect to all other
contingent and fixed liabilities of such Subsidiary Guarantor (including,
without limitation, any Guarantees under the Senior Credit Agreement) and after
giving effect to any collections from or payments made by or on behalf of any
other Subsidiary Guarantor in respect of the obligations of such other
Subsidiary Guarantor under its Subsidiary Guarantee or pursuant to its
contribution obligations under this Indenture or as set forth below, result in
the obligations of the Subsidiary Guarantor under its Subsidiary Guarantee not
constituting a fraudulent conveyance or fraudulent transfer under federal or
state law.
<PAGE>
Each Subsidiary Guarantor may consolidate with or merge into or sell
its assets to the Company or another Wholly-Owned Subsidiary Guarantor without
limitation. Each Subsidiary Guarantor may consolidate with or merge into or sell
all or substantially all its assets to a corporation, partnership, trust,
limited partnership, limited liability company or other similar entity other
than the Company or a Wholly-Owned Subsidiary Guarantor (whether or not
affiliated with the Subsidiary Guarantor), except that if the surviving
corporation of any such merger or consolidation is a Subsidiary of the Company,
such Subsidiary shall not be a Foreign Subsidiary. Upon the sale or disposition
of a Subsidiary Guarantor (by merger, consolidation, the sale of its Capital
Stock or the sale of all or substantially all of its assets) to a Person
(whether or not an Affiliate of the Subsidiary Guarantor) which is not a
Subsidiary of the Company, which sale or disposition is otherwise in compliance
with this Indenture (including SECTION 3.6), such Subsidiary Guarantor shall be
deemed released from all its obligations under this Indenture and its Subsidiary
Guarantee and such Subsidiary Guarantee shall terminate; PROVIDED, HOWEVER, that
any such termination shall occur only to the extent that all obligations of such
Subsidiary Guarantor under the Senior Credit Agreement and all of its Guarantees
of, and under all of its pledges of assets or other security interests which
secure, any other Indebtedness of the Company shall also terminate upon such
release, sale or transfer.
SECTION 10.3. RIGHT OF CONTRIBUTION. Each Subsidiary Guarantor hereby
agrees that to the extent that any Subsidiary Guarantor shall have paid more
than its proportionate share of any payment made on the obligations under the
Subsidiary Guarantees, such Subsidiary Guarantor shall be entitled to seek and
receive contribution from and against the Company or any other Subsidiary
Guarantor who has not paid its proportionate share of such payment. Each
Subsidiary Guarantor's right of contribution shall be subject to the terms and
conditions of SECTION 3.5. The provisions of this SECTION 10.3 shall in no
respect limit the obligations and liabilities of each Subsidiary Guarantor to
the Trustee and the Holders and each Subsidiary Guarantor shall remain liable to
the Trustee and the Holders for the full amount guaranteed by such Subsidiary
Guarantor hereunder.
SECTION 10.4. NO SUBROGATION. Notwithstanding any payment or payments
made by each Subsidiary Guarantor hereunder, no Subsidiary Guarantor shall be
entitled to be subrogated to any of the rights of the Trustee or any Holder
against the Company or any other Subsidiary Guarantor or any collateral security
or guarantee or right of offset held by the Trustee or any Holder for the
payment of the Obligations, nor shall any Subsidiary Guarantor seek or be
entitled to seek any contribution or reimbursement from the Company or any other
Subsidiary Guarantor in respect of payments made by such Subsidiary Guarantor
hereunder, until all amounts owing to the Trustee and the Holders by the Company
on account of the Obligations are paid in full. If any amount shall be paid to
any Subsidiary Guarantor on account of such subrogation rights at any time when
all of the Obligations shall not have been paid in full, such amount shall be
held by such Subsidiary Guarantor in trust for the Trustee and the Holders,
segregated from other funds of such Subsidiary Guarantor, and shall, forthwith
upon receipt by such Subsidiary Guarantor, be turned over to the Trustee in the
exact form received by such Subsidiary Guarantor (duly indorsed by such
Subsidiary Guarantor to the Trustee, if required), to be applied against the
Obligations.
SECTION 10.5. EXECUTION AND DELIVERY OF SUBSIDIARY GUARANTEE. To
further evidence the Subsidiary Guarantees set forth in Section 10.1, each
Subsidiary Guarantor hereby agrees that a notation of its Subsidiary Guarantee,
substantially in the form of Exhibit D hereto, shall be endorsed on each
Security authenticated and delivered by the Trustee. The Subsidiary Guarantee of
any Subsidiary Guarantor shall be executed on behalf of such Subsidiary
<PAGE>
Guarantor by either manual or facsimile signature of an Officer of such
Subsidiary Guarantor, each of whom, in each case, shall have been duly
authorized to so execute by all requisite corporate action. The validity and
enforceability of any Subsidiary Guarantee shall not be affected by the fact
that it is not affixed to any particular Security.
Each of the Subsidiary Guarantors hereby agrees that its Subsidiary
Guarantee set forth in Section 10.1 shall remain in full force and effect
notwithstanding any failure to endorse on each Security a notation of such
Subsidiary Guarantee.
If the Officer of a Subsidiary Guarantor whose signature is on a
Subsidiary Guarantee no longer holds that office at the time the Trustee
authenticates the Security on which such Subsidiary Guarantee is endorsed or at
any time thereafter, such Subsidiary Guarantor's Subsidiary Guarantee of such
Security shall nevertheless be valid.
The delivery of any Security by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of any Subsidiary Guarantee set
forth in this Indenture on behalf of each Subsidiary Guarantor.
ARTICLE XI
MISCELLANEOUS
SECTION 11.1. TRUST INDENTURE ACT CONTROLS. If any provision of this
Indenture limits, qualifies or conflicts with another provision which is
required to be included in this Indenture by the TIA, the provision required by
the TIA shall control. Each Subsidiary Guarantor in addition to performing its
obligations under its Subsidiary Guarantee shall perform such other obligations
as may be imposed upon it with respect to this Indenture under the TIA.
SECTION 11.2. NOTICES. Any notice or communication shall be in writing
and delivered in person or mailed, certified or registered mail with postage
prepaid, addressed as follows:
if to the Company or any Subsidiary Guarantor:
NE Restaurant Company, Inc.
80A Turnpike Road
Westborough, Massachusetts 01581
Attention: President
With a copy, in the case of any notice under Article VI, to:
Stroock & Stroock & Lavan LLP
180 Maiden Lane
New York, New York 10038-4982
Attention: David H. Kaufman, Esq.
if to the Trustee:
United States Trust Company of New York
114 West 47th Street
New York, New York 10036-1532
Attention: Corporate Trust Department
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
<PAGE>
Any notice or communication mailed to a Securityholder shall be mailed
to the Securityholder at the Securityholder's address as it appears on the
registration books of the Registrar and shall be sufficiently given if so mailed
within the time prescribed.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
SECTION 11.3. COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.
Securityholders may communicate pursuant to TIA ss. 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Trustee shall comply with TIA ss. 312(b) with respect to any
such communication. The Company, the Trustee, the Registrar and anyone else
shall have the protection of TIA ss. 312(c).
SECTION 11.4. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT. Upon
any request or application by the Company to the Trustee to take or refrain from
taking any action under this Indenture, the Company shall furnish to the
Trustee:
(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of the signers,
all conditions precedent, if any, provided for in this Indenture relating
to the proposed action have been complied with; and
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of such counsel,
all such conditions precedent have been complied with.
SECTION 11.5. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION. Each
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture shall include:
(1) a statement that the individual making such certificate or opinion
has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such individual, he has made
such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has
been complied with; and
(4) a statement as to whether or not, in the opinion of such
individual, such covenant or condition has been complied with.
In giving such Opinion of Counsel, counsel may rely as to factual
matters on an Officer's Certificate or on certificates of public officials.
SECTION 11.6. WHEN SECURITIES DISREGARDED. In determining whether the
Holders of the required principal amount of Securities have concurred in any
direction, waiver or consent, Securities owned by the Company or by any Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Company shall be disregarded and deemed not to be
outstanding, except that, for the purpose of determining whether the Trustee
<PAGE>
shall be protected in relying on any such direction, waiver or consent, only
Securities which the Trustee knows are so owned shall be so disregarded. Also,
subject to the foregoing, only Securities outstanding at the time shall be
considered in any such determination.
SECTION 11.7. RULES BY TRUSTEE, PAYING AGENT AND REGISTRAR. The
Trustee may make reasonable rules for action by, or a meeting of,
Securityholders. The Registrar and the Paying Agent may make reasonable rules
for their functions.
SECTION 11.8. LEGAL HOLIDAYS. A "LEGAL HOLIDAY" is a Saturday, a
Sunday or other day on which commercial banking institutions are authorized or
required to be closed in New York City. If a payment date is a Legal Holiday,
payment shall be made on the next succeeding day that is not a Legal Holiday,
and no interest shall accrue with respect to such payment for the intervening
period. If a regular record date is a Legal Holiday, the record date shall not
be affected.
SECTION 11.9. GOVERNING LAW. THIS INDENTURE AND THE SECURITIES SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO
THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY.
SECTION 11.10. NO RECOURSE AGAINST OTHERS. An incorporator, director,
officer, employee, stockholder or controlling person, as such, of the Company
shall not have any liability for any obligations of the Company under the
Securities or this Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. By accepting a Security, each
Securityholder shall waive and release all such liability. The waiver and
release shall be part of the consideration for the issue of the Securities.
SECTION 11.11. SUCCESSORS. All agreements of the Company and the
Subsidiary Guarantors in this Indenture and the Securities shall bind their
respective successors. All agreements of the Trustee in this Indenture shall
bind its successors.
SECTION 11.12. MULTIPLE ORIGINALS. The parties may sign any number of
copies of this Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement. One signed copy is enough to prove this
Indenture.
SECTION 11.13. VARIABLE PROVISIONS. The Company initially appoints the
Trustee as Paying Agent and Registrar and custodian with respect to any Global
Securities.
SECTION 11.14. QUALIFICATION OF INDENTURE. The Company shall qualify
this Indenture under the TIA in accordance with the terms and conditions of the
Registration Rights Agreement and shall pay all reasonable costs and expenses
(including attorneys' fees and expenses for the Company, the Trustee and the
Holders) incurred in connection therewith, including, but not limited to, costs
and expenses of qualification of this Indenture and the Securities and printing
this Indenture and the Securities. The Trustee shall be entitled to receive from
the Company any such Officers' Certificates, Opinions of Counsel or other
documentation as it may reasonably request in connection with any such
qualification of this Indenture under the TIA.
SECTION 11.15. TABLE OF CONTENTS; HEADINGS. The table of contents,
cross- reference sheet and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not intended
<PAGE>
to be considered a part hereof and shall not modify or restrict any of the terms
or provisions hereof.
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed as of the date first written above.
NE RESTAURANT COMPANY, INC.
By:/s/ DENNIS D. PEDRA
----------------------------
Name: Dennis D. Pedra
Title: President
UNITED STATES TRUST COMPANY OF NEW YORK,
as Trustee
By: /s/ PATRICIA STERMER
---------------------------
Name: Patricia Stermer
Title: Assistant Vice President
EXHIBIT A
[FORM OF FACE OF INITIAL SECURITY]
No. [___] Principal Amount $[______________]
CUSIP NO. ____________
10 3/4% Senior Notes due 2008
NE Restaurant Company, Inc., a Delaware corporation, promises to pay
to [___________], or registered assigns, the principal sum of
[__________________] Dollars on July 15, 2008.
Interest Payment Dates: January 15 and July 15
Record Dates: January 1 and July 1
Additional provisions of this Security are set forth on the other side
of this Security.
NE RESTAURANT COMPANY, INC.
Date: _____________ By:___________________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF
<PAGE>
AUTHENTICATION
UNITED STATES TRUST COMPANY
OF NEW YORK
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture.
By
Authorized Signatory
[FORM OF REVERSE SIDE OF INITIAL SECURITY]
10 3/4% Senior Note due 2008
1. INTEREST
NE Restaurant Company, Inc., a Delaware corporation (such corporation,
and its successors and assigns under the Indenture hereinafter referred to,
being herein called the "Company"), promises to pay interest on the principal
amount of this Security at the rate per annum shown above.
The Company will pay interest semiannually on January 15 and July 15
of each year commencing January 15, 1999. Interest on the Securities will accrue
from the most recent date to which interest has been paid on the Securities or,
if no interest has been paid, from July 20, 1998. The Company shall pay interest
on overdue principal or premium, if any (plus interest on such interest to the
extent lawful), at the rate borne by the Securities to the extent lawful.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months.
2. METHOD OF PAYMENT
By at least 10:00 a.m. (New York City time) on the date on which any
principal of or interest on any Security is due and payable, the Company shall
irrevocably deposit with the Trustee or the Paying Agent money sufficient to pay
such principal, premium, if any, and/or interest. The Company will pay interest
(except Defaulted Interest) to the Persons who are registered Holders of
Securities at the close of business on the January 1 or July 1 next preceding
the interest payment date even if Securities are cancelled, repurchased or
redeemed after the record date and on or before the interest payment date.
Holders must surrender Securities to a Paying Agent to collect principal
payments. The Company will pay principal and interest in money of the United
States that at the time of payment is legal tender for payment of public and
private debts. However, the Company may pay principal and interest by check
payable in such money. It may mail an interest check to a Holder's registered
address.
3. PAYING AGENT AND REGISTRAR
Initially, United States Trust Company of New York, a banking
corporation duly organized and existing under the laws of the State of New York
(the "Trustee"), will act as Trustee, Paying Agent and Registrar. The Company
may appoint and change any Paying Agent, Registrar or co-registrar without
notice to any Securityholder. The Company or any of its domestically
incorporated Wholly- Owned Subsidiaries may act as Paying Agent, Registrar or
<PAGE>
co-registrar.
4. INDENTURE
The Company issued the Securities under an Indenture dated as of July
20, 1998 (as it may be amended or supplemented from time to time in accordance
with the terms thereof, the "Indenture"), between the Company and the Trustee.
The terms of the Securities include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C.
ss.ss. 77aaa-77bbbb) as in effect on the date of the Indenture (the "Act").
Capitalized terms used herein and not defined herein have the meanings ascribed
thereto in the Indenture. The Securities are subject to all such terms, and
Securityholders are referred to the Indenture and the Act for a statement of
those terms.
The Securities are general unsecured senior obligations of the Company
limited to $100.0 million aggregate principal amount (subject to SECTION 2.9 of
the Indenture). The aggregate principal amount of notes which may be
authenticated and delivered under the Indenture, including the Securities, is
limited to $100.0 million (subject to SECTION 2.9 of the Indenture). This
Security is one of the Initial Securities referred to in the Indenture. The
Securities include the Initial Securities and any Exchange Securities issued in
exchange for the Initial Securities pursuant to the Indenture and the
Registration Rights Agreement. The Initial Securities and the Exchange
Securities are treated as a single class of securities under the Indenture. The
Indenture imposes certain limitations on: the Incurrence of Indebtedness by the
Company and its Restricted Subsidiaries, the payment of dividends and other
distributions on the Capital Stock of the Company and its Restricted
Subsidiaries, the purchase or redemption of Capital Stock of the Company and
Capital Stock of such Restricted Subsidiaries, certain purchases or redemptions
of Subordinated Indebtedness, the Incurrence of Liens by the Company or its
Restricted Subsidiaries, the sale or transfer of assets and Capital Stock of
Restricted Subsidiaries, the issuance or sale of Capital Stock of Restricted
Subsidiaries, the business activities and investments of the Company and its
Restricted Subsidiaries and, transactions with Affiliates. In addition, the
Indenture limits the ability of the Company and its Restricted Subsidiaries to
restrict distributions and dividends from Restricted Subsidiaries.
To guarantee the due and punctual payment of the principal, premium,
if any, and interest on the Securities and all other amounts payable by the
Company under the Indenture and the Securities when and as the same shall be due
and payable, whether at maturity, by acceleration or otherwise, according to the
terms of the Securities and the Indenture, the Subsidiary Guarantors have
unconditionally guaranteed (and future Subsidiary Guarantors, together with the
Subsidiary Guarantors, will unconditionally guarantee), jointly and severally,
such obligations on a senior unsecured basis pursuant to the terms of the
Indenture.
5. REDEMPTION
Except as set forth below, the Securities will not be redeemable at
the option of the Company prior to July 15, 2003. On and after such date, the
Securities will be redeemable, at the Company's option, in whole or in part, at
any time upon not less than 30 nor more than 60 days prior notice mailed by
first-class mail to each holder's registered address, at the following
redemption prices (expressed in percentages of principal amount), plus accrued
and unpaid interest to the redemption date (subject to the right of holders of
record on the relevant record date to receive interest due on the relevant
interest payment date):
<PAGE>
If redeemed during the 12-month period commencing on July 15 of the
years set forth below:
PERIOD REDEMPTION PRICE
2003 105.375%
2004 103.583%
2005 101.792%
2006 and thereafter 100.000%
In addition, at any time and from time to time prior to July 15, 2001,
the Company may redeem in the aggregate up to 35% of the original principal
amount of the Securities with the proceeds of one or more Equity Offerings
received by, or invested in, the Company so long as there is a Public Market at
the time of such redemption, at a Redemption Price (expressed as a percentage of
principal amount) of 110.75% plus accrued and unpaid interest, if any, to the
Redemption Date (subject to the right of holders of record on the relevant
record date to receive interest due on the relevant interest payment date);
PROVIDED, HOWEVER, that at least 65% of the original principal amount of the
Securities must remain outstanding after each such redemption; PROVIDED FURTHER,
however, that each such redemption occurs within 90 days of the date of closing
of such Equity Offering.
Upon the occurrence of a CHANGE OF CONTROL, unless the Company shall
have exercised its right to redeem the Securities as described in SECTION 5.1 of
the Indenture, each Holder will have the right to require the Company to
repurchase all or any part of such Holder's Securities at a purchase price in
cash equal to 101% of the principal amount thereof plus accrued and unpaid
interest, if any, to the CHANGE OF CONTROL PAYMENT DATE.
In the case of any partial redemption, selection of the Securities for
redemption will be made by the Trustee on a pro rata basis, by lot or by such
other method as the Trustee in its sole discretion shall deem to be fair and
appropriate, although no Securities of $1,000 in original principal amount or
less will be redeemed in part. If any Security is to be redeemed in part only,
the notice of redemption relating to such Security shall state the portion of
the principal amount thereof to be redeemed. A new Security in principal amount
equal to the unredeemed portion thereof will be issued in the name of the holder
thereof upon cancellation of the original Security.
6. REPURCHASE PROVISIONS
(a) Upon a Change of Control, unless the Company has exercised its
right to redeem the Securities as described under SECTION 5 hereof, any Holder
of Securities will have the right to cause the Company to repurchase all or any
part of the Securities of such Holder at a purchase price in cash equal to 101%
of the principal amount thereof, plus accrued and unpaid interest, if any, to
the date of repurchase (subject to the right of Holders of record on the
relevant record date to receive interest due on the relevant interest payment
date) as provided in, and subject to the terms of, the Indenture.
(b) If the Company or a Restricted Subsidiary consummates any Asset
Disposition permitted by the Indenture, when the aggregate amount of Excess
Proceeds equals or exceeds $5.0 million, the Company shall make an Offer for all
outstanding Securities pro rata up to a maximum principal amount (expressed as a
multiple of $1,000) of Securities equal to such Excess Proceeds, at a purchase
price in cash equal to 100% of the principal amount thereof, plus accrued and
unpaid interest thereon, if any, to the date of purchase in accordance with the
procedures set forth in SECTION 3.6 of the Indenture.
<PAGE>
7. SPECIAL MANDATORY REDEMPTION
In the event that the Acquisition does not take place prior to July
31, 1998 or the Merger Agreement is terminated, the Company shall redeem the
Securities at a redemption price equal to 100% of the principal amount thereof,
plus accrued and unpaid interest, if any, to the date of redemption, in
accordance with the procedures set forth in SECTION 5.2 of the Indenture.
8. DENOMINATIONS; TRANSFER; EXCHANGE
The Securities are in registered form without coupons in denominations
of principal amount of $1,000 and whole multiples of $1,000. A Holder may
register the transfer of or exchange Securities in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements or transfer documents and to pay any taxes and fees
required by law or permitted by the Indenture. The Registrar need not register
the transfer of or exchange (i) any Securities selected for redemption (except,
in the case of a Security to be redeemed in part, the portion of the Security
not to be redeemed) for a period beginning 15 days before the mailing of a
notice of Securities to be redeemed and ending on the date of such mailing or
(ii) any Securities for a period beginning 15 days before an interest payment
date and ending on such interest payment date.
9. PERSONS DEEMED OWNERS
The registered holder of this Security may be treated as the owner of
it for all purposes.
10. UNCLAIMED MONEY
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent shall pay the money back to the
Company at its request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only to
the Company and not to the Trustee for payment.
11. DEFEASANCE
Subject to certain conditions set forth in the Indenture, the Company
at any time may terminate some or all of its obligations under the Securities
and the Indenture if the Company deposits with the Trustee money or U.S.
Government Obligations for the payment of principal and interest on the
Securities to redemption or maturity, as the case may be.
12. AMENDMENT, WAIVER
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount of the then outstanding
Securities and (ii) any default (other than with respect to nonpayment) or
noncompliance with any provision may be waived with the written consent of the
Holders of a majority in principal amount of the then outstanding Securities.
Subject to certain exceptions set forth in the Indenture, without the consent of
any Securityholder, the Company and the Trustee may amend the Indenture or the
Securities to cure any ambiguity, omission, defect or inconsistency, or to
comply with ARTICLE IV of the Indenture, or to provide for uncertificated
Securities in addition to or in place of certificated Securities, or to add
guarantees with respect to the Securities or to secure the Securities, or to add
additional covenants or surrender rights and powers conferred on the Company, or
to comply with any request of the SEC in connection with qualifying the
<PAGE>
Indenture under the Act, or to make any change that does not adversely affect
the rights of any Securityholder, or to provide for the issuance of Exchange
Securities.
13. DEFAULTS AND REMEDIES
Under the Indenture, Events of Default include (i) default for 30 days
in payment of interest when due on the Securities; (ii) default in payment of
principal on the Securities at maturity, upon required repurchase, upon required
repurchase or upon redemption pursuant to paragraphs 5 and 6 of the Securities,
upon declaration or otherwise; (iii) the failure by the Company to comply with
its obligations under ARTICLE IV of the Indenture, (iv) failure by the Company
to comply for 30 days after notice with any of its obligations under the
covenants described under SECTION 3.9 of the Indenture or under other covenants
specified in the Indenture (in each case, other than a failure to purchase
Securities, which shall constitute an Event of Default under clause (ii) above),
(v) the failure by the Company to comply for 60 days after notice with its other
agreements contained in the Indenture, (vi) Indebtedness of the Company or any
Restricted Subsidiary if not paid within any applicable grace period after final
maturity or is accelerated by the holders thereof because of a default and the
total amount of such Indebtedness unpaid or accelerated exceeds $5.0 million
(the "cross acceleration provision"), (vii) certain events of bankruptcy,
insolvency or reorganization of the Company or a Significant Subsidiary (the
"bankruptcy provisions"), (viii) any judgment or decree for the payment of money
in excess of $5.0 million is rendered against the Company or a Significant
Subsidiary and such judgment or decree shall remain undischarged or unstayed for
a period of 60 days after such judgment becomes final and non-appealable (the
"judgment default provision") or (ix) any Subsidiary Guarantee ceases to be in
full force and effect (except as contemplated by the terms of the Indenture) or
any Subsidiary Guarantor denies or disaffirms its obligations under the
Indenture or its Subsidiary Guarantee. However, a default under clauses (iv) and
(v) will not constitute an Event of Default until the Trustee or the holders of
more than 25% in principal amount of the then outstanding Securities notify the
Company of the default and the Company does not cure such default within the
time specified in clauses (iv) and (v) hereof after receipt of such notice.
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the Securities may declare all
the Securities to be due and payable immediately. Certain events of bankruptcy
or insolvency are Events of Default which will result in the Securities being
due and payable immediately upon the occurrence of such Events of Default.
Securityholders may not enforce the Indenture or the Securities except
as provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Securities unless it receives reasonable indemnity or security. Subject to
certain limitations, Holders of a majority in principal amount of the Securities
may direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Securityholders notice of any continuing Default or Event of
Default (except a Default or Event of Default in payment of principal or
interest) if it determines that withholding notice is in their interest.
14. TRUSTEE DEALINGS WITH THE COMPANY
Subject to certain limitations set forth in the Indenture, the Trustee
under the Indenture, in its individual or any other capacity, may become the
owner or pledgee of Securities and may otherwise deal with and collect
obligations owed to it by the Company or its Affiliates and may otherwise deal
with the Company or its Affiliates with the same rights it would have if it were
not Trustee.
<PAGE>
15. NO RECOURSE AGAINST OTHERS
An incorporator, director, officer, employee, stockholder or
controlling person, as such, of the Company shall not have any liability for any
obligations of the Company under the Securities or the Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, each Securityholder waives and releases all
such liability. The waiver and release are part of the consideration for the
issue of the Securities.
16. AUTHENTICATION
This Security shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent acting on its behalf) manually signs the
certificate of authentication on the other side of this Security.
17. ABBREVIATIONS
Customary abbreviations may be used in the name of a Securityholder or
an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entirety), JT TEN (=joint tenants with rights of survivorship and not as tenants
in common), CUST (=custodian) and U/G/M/A (=Uniform Gift to Minors Act).
18. CUSIP NUMBERS
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures the Company has caused CUSIP numbers to be
printed on the Securities and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Securityholders. No representation is
made as to the accuracy of such numbers either as printed on the Securities or
as contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
19. GOVERNING LAW
This Security shall be governed by, and construed in accordance with,
the laws of the State of New York but without giving effect to applicable
principles of conflicts of law to the extent that the application of the laws of
another jurisdiction would be required thereby.
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint ______________ agent to transfer this Security
on the books of the Company. The agent may substitute another to act
for him.
_______________________________________________________________________________
Date:____________________ Your Signature:___________________
Signature Guarantee:______________________________
(Signature must be guaranteed)
<PAGE>
_______________________________________________________________________________
Sign exactly as your name appears on the other side of this Security.
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.
In connection with any transfer or exchange of any of the Securities evidenced
by this certificate occurring prior to the date that is two years after the
later of the date of original issuance of such Securities and the last date, if
any, on which such Securities were owned by the Company or any Affiliate of the
Company, the undersigned confirms that such Securities are being:
CHECK ONE BOX BELOW:
1 / / acquired for the undersigned's own account, without
transfer; or
2 / / transferred to the Company; or
3 / / transferred pursuant to and in compliance with
Rule 144A under the Securities Act of 1933, as
amended (the "Securities Act"); or
4 / / transferred pursuant to an effective registration
statement under the Securities Act; or
5 / / transferred pursuant to and in compliance with
Regulation S under the Securities Act; or
6 / / transferred to an institutional "accredited investor"
(as defined in Rule 501(a)(1), (2), (3) or (7) under
the Securities Act), that has furnished to the
Trustee a signed letter containing certain
representations and agreements (the form of which
letter appears as SECTION 2.7 of the Indenture); or
7 / / transferred pursuant to another available exemption
from the registration requirements of the Securities
Act of 1933.
Unless one of the boxes is checked, the Trustee will refuse to register any of
the Securities evidenced by this certificate in the name of any person other
than the registered holder thereof; PROVIDED, HOWEVER, that if box (5), (6) or
(7) is checked, the Trustee or the Company may require, prior to registering any
such transfer of the Securities, in their sole discretion, such legal opinions,
certifications and other information as the Trustee or the Company may
reasonably request to confirm that such transfer is being made pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act of 1933, such as the exemption provided by
Rule 144 under such Act.
------------------------------
Signature
Signature Guarantee:
----------------------------- ------------------------------
<PAGE>
(Signature must be guaranteed) Signature
------------------------------------------------------------
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.
TO BE COMPLETED BY PURCHASER IF (1) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, as amended, and is aware that the sale to it is being made in reliance on
Rule 144A and acknowledges that it has received such information regarding the
Company as the undersigned has requested pursuant to Rule 144A or has determined
not to request such information and that it is aware that the transferor is
relying upon the undersigned's foregoing representations in order to claim the
exemption from registration provided by Rule 144A.
Dated:
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The following increases or decreases in this Global Security have been
made:
Date of Amount of decrease in Principal Principal Amount of this Signature of authorized
Exchange Amount of this Global Security Global Security following signatory of Trustee or
such decrease or increase Securities Custodian
________ ______________________________ ________________________ _______________________
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to SECTION 3.6 or 3.9 of the Indenture, check either box:
/ / / /
3.6 3.9
<PAGE>
If you want to elect to have only part of this Security purchased by
the Company pursuant to SECTION 3.6 or 3.9 of the Indenture, state the amount in
principal amount (must be integral multiple of $1,000): $
Date: __________ Your Signature ____________________________
Sign exactly as your name appears on the
other side of the Security)
Signature Guarantee: _______________________________________
(Signature must be guaranteed)
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.
EXHIBIT B
[FORM OF FACE OF EXCHANGE SECURITY]
No. [_____] Principal Amount $[____________]
CUSIP NO. _____________
10 3/4% Senior Notes due 2008
NE Restaurant Company Inc., a Delaware corporation, promises to pay to
[______________], or registered assigns, the principal sum of [_______________]
Dollars on July 15, 2008.
Interest Payment Dates: January 15 and July 15
Record Dates: January 1 and July 1
Additional provisions of this Security are set forth on the other side
of this Security.
Dated: __________ NE RESTAURANT COMPANY, INC.
By:________________________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
United States Trust Company of New York
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture.
<PAGE>
By:
Authorized Signatory
[FORM OF REVERSE SIDE OF EXCHANGE SECURITY]
10 3/4% Senior Note due 2008
1. INTEREST
NE Restaurant Company, Inc., a Delaware corporation (such corporation,
and its successors and assigns under the Indenture hereinafter referred to,
being herein called the "Company"), promises to pay interest on the principal
amount of this Security at the rate per annum shown above.
The Company will pay interest semiannually on January 15 and July 15
of each year commencing January 15, 1999. Interest on the Securities will accrue
from the most recent date to which interest has been paid on the Securities or,
if no interest has been paid, from July 20, 1998. The Company shall pay interest
on overdue principal or premium, if any (plus interest on such interest to the
extent lawful), at the rate borne by the Securities to the extent lawful.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months.
2. METHOD OF PAYMENT
By at least 10:00 a.m. (New York City time) on the date on which any
principal of or interest on any Security is due and payable, the Company shall
irrevocably deposit with the Trustee or the Paying Agent money sufficient to pay
such principal, premium, if any, and/or interest. The Company will pay interest
(except Defaulted Interest) to the Persons who are registered Holders of the
Securities at the close of business on the January 1 or July 1 next preceding
the interest payment date even if Securities are cancelled, repurchased or
redeemed after the record date and on or before the interest payment date.
Holders must surrender Securities to a Paying Agent to collect principal
payments. The Company will pay principal and interest in money of `the United
States that at the time of payment is legal tender for payment of public and
private debts. However, the Company may pay principal and interest by check
payable in such money. It may mail an interest check to a Holder's registered
address.
3. PAYING AGENT AND REGISTRAR
Initially, United States Trust Company of New York, a banking
corporation duly organized and existing under the laws of the State of New York
(the "Trustee"), will act as Trustee, Paying Agent and Registrar. The Company
may appoint and change any Paying Agent, Registrar or co-registrar without
notice to any Securityholder. The Company or any of its domestically
incorporated Wholly- Owned Subsidiaries may act as Paying Agent, Registrar or
co-registrar.
4. INDENTURE
The Company issued the Securities under an Indenture dated as of July
20, 1998 (as it may be amended or supplemented from time to time in accordance
with the terms thereof, the "Indenture"), between the Company and the Trustee.
The terms of the Securities include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C.
ss.ss. 77aaa-77bbbb) as in effect on the date of the Indenture (the "Act").
Capitalized terms used herein and not defined herein have the meanings ascribed
thereto in the Indenture. The Securities are subject to all such terms, and
<PAGE>
Securityholders are referred to the Indenture and the Act for a statement of
those terms.
The Securities are general unsecured senior obligations of the Company
limited to $100.0 million aggregate principal amount (subject to SECTION 2.9 of
the Indenture). The aggregate principal amount of notes which may be
authenticated and delivered under the Indenture, including the Securities, is
limited to $100.0 million (subject to SECTION 2.9 of the Indenture). This
Security is one of the Exchange Securities referred to in the Indenture. The
Securities include the Initial Securities and any Exchange Securities issued in
exchange for the Initial Securities pursuant to the Indenture and the
Registration Rights Agreement. The Initial Securities and the Exchange
Securities are treated as a single class of securities under the Indenture. The
Indenture imposes certain limitations on: the Incurrence of Indebtedness by the
Company and its Restricted Subsidiaries, the payment of dividends and other
distributions on the Capital Stock of the Company and its Restricted
Subsidiaries, the purchase or redemption of Capital Stock of the Company and
Capital Stock of such Restricted Subsidiaries, certain purchases or redemptions
of Subordinated Indebtedness, the Incurrence of Liens by the Company or its
Restricted Subsidiaries, the sale or transfer of assets and Capital Stock of
Restricted Subsidiaries, the issuance or sale of Capital Stock of Restricted
Subsidiaries, the business activities and investments of the Company and its
Restricted Subsidiaries, and transactions with Affiliates. In addition, the
Indenture limits the ability of the Company and its Subsidiaries to restrict
distributions and dividends from Restricted Subsidiaries.
To guarantee the due and punctual payment of the principal, premium,
if any, and interest on the Securities and all other amounts payable by the
Company under the Indenture and the Securities when and as the same shall be due
and payable, whether at maturity, by acceleration or otherwise, according to the
terms of the Securities and the Indenture, the Subsidiary Guarantors have
unconditionally guaranteed (and future Subsidiary Guarantors, together with the
Subsidiary Guarantors, will unconditionally guarantee), jointly and severally,
such obligations on a senior unsecured basis pursuant to the terms of the
Indenture.
5. OPTIONAL REDEMPTION
Except as set forth below, the Securities will not be redeemable at
the option of the Company prior to July 15, 2003. On and after such date, the
Securities will be redeemable, at the Company's option, in whole or in part, at
any time upon not less than 30 nor more than 60 days prior notice mailed by
first-class mail to each holder's registered address, at the following
redemption prices (expressed in percentages of principal amount), plus accrued
and unpaid interest to the redemption date (subject to the right of holders of
record on the relevant record date to receive interest due on the relevant
interest payment date):
If redeemed during the 12-month period commencing on July 15 of the
years set forth below:
PERIOD REDEMPTION PRICE
2003 105.375%
2004 103.583%
2005 101.792%
2006 and thereafter 100.000%
In addition, at any time and from time to time prior to July 15, 2001,
the Company may redeem in the aggregate up to 35% of the original principal
<PAGE>
amount of the Securities with the proceeds of one or more Equity Offerings
received by, or invested in, the Company so long as there is a Public Market at
the time of such redemption, at a redemption price (expressed as a percentage of
principal amount) of 110.75% plus accrued and unpaid interest, if any, to the
redemption date (subject to the right of holders of record on the relevant
record date to receive interest due on the relevant interest payment date);
PROVIDED, HOWEVER, that at least 65% of the original principal amount of the
Securities must remain outstanding after each such redemption; PROVIDED FURTHER,
that each such redemption occurs within 90 days of the date of closing of such
Equity Offering.
Upon the occurrence of a CHANGE OF CONTROL, unless the Company shall
have exercised its right to redeem the Securities as described in SECTION 5.1 of
the Indenture, each Holder will have the right to require the Company to
repurchase all or any part of such Holder's Securities at a purchase price in
cash equal to 101% of the principal amount thereof plus accrued and unpaid
interest, if any, to the CHANGE OF CONTROL PAYMENT DATE.
In the case of any partial redemption, selection of the Securities for
redemption will be made by the Trustee on a pro rata basis, by lot or by such
other method as the Trustee in its sole discretion shall deem to be fair and
appropriate, although no Securities of $1,000 in original principal amount or
less will be redeemed in part. If any Security is to be redeemed in part only,
the notice of redemption relating to such Security shall state the portion of
the principal amount thereof to be redeemed. A new Security in principal amount
equal to the unredeemed portion thereof will be issued in the name of the holder
thereof upon cancellation of the original Security.
6. REPURCHASE PROVISIONS
(a) Upon a Change of Control, unless the Company has exercised its
right to redeem the Securities as described under SECTION 5 hereof, any Holder
of Securities will have the right to cause the Company to repurchase all or any
part of the Securities of such Holder at a purchase price in cash equal to 101%
of the principal amount thereof, plus accrued and unpaid interest, if any, to
the date of repurchase (subject to the right of Holders of record on the
relevant record date to receive interest due on the relevant interest payment
date) as provided in, and subject to the terms of, the Indenture.
(b) If the Company or a Restricted Subsidiary consummates any Asset
Disposition permitted by the Indenture, when the aggregate amount of Excess
Proceeds equals or exceeds $5.0 million, the Company shall make an Offer for all
outstanding Securities pro rata up to a maximum principal amount (expressed as a
multiple of $1,000) of Securities equal to such Excess Proceeds, at a purchase
price in cash equal to 100% of the principal amount thereof, plus accrued and
unpaid interest thereon, if any, to the date of purchase in accordance with the
procedures set forth in SECTION 3.7 of the Indenture.
7. DENOMINATIONS; TRANSFER; EXCHANGE
The Securities are in registered form without coupons in denominations
of principal amount of $1,000 and whole multiples of $1,000. A Holder may
transfer or exchange Securities in accordance with the Indenture. The Registrar
may require a Holder, among other things, to furnish appropriate endorsements or
transfer documents and to pay any taxes and fees required by law or permitted by
the Indenture. The Registrar need not register the transfer of or exchange (i)
any Securities selected for redemption (except, in the case of a Security to be
redeemed in part, the portion of the Security not to be redeemed) or for a
period beginning 15 days before the mailing of a notice of Securities to be
redeemed and ending on the date of such mailing or (ii) any Securities for a
<PAGE>
period beginning 15 days before an interest payment date and ending on such
interest payment date.
8. PERSONS DEEMED OWNERS
The registered holder of this Security may be treated as the owner of
it for all purposes.
9. UNCLAIMED MONEY
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent shall pay the money back to the
Company at its request unless an abandoned property law designates another
person. After any such payment, Holders entitled to the money must look only to
the Company and not to the Trustee for payment.
10. DEFEASANCE
Subject to certain conditions set forth in the Indenture, the Company
at any time may terminate some or all of its obligations under the Securities
and the Indenture if the Company deposits with the Trustee money or U.S.
Government Obligations for the payment of principal and interest on the
Securities to redemption or maturity, as the case may be.
11. AMENDMENT, WAIVER
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount of the then outstanding
Securities and (ii) any default (other than with respect to nonpayment) or
noncompliance with any provision may be waived with the written consent of the
Holders of a majority in principal amount of the then outstanding Securities.
Subject to certain exceptions set forth in the Indenture, without the consent of
any Securityholder, the Company and the Trustee may amend the Indenture or the
Securities to cure any ambiguity, omission, defect or inconsistency, or to
comply with ARTICLE IV of the Indenture, or to provide for uncertificated
Securities in addition to or in place of certificated Securities, or to add
guarantees with respect to the Securities or to secure the Securities, or to add
additional covenants or surrender rights and powers conferred on the Company or
Communications or to comply with any request of the SEC in connection with
qualifying the Indenture under the Act, or to make any change that does not
adversely affect the rights of any Securityholder, or to provide for the
issuance of Exchange Securities.
12. DEFAULTS AND REMEDIES
Under the Indenture, Events of Default include (i) default for 30 days
in payment of interest when due on the Securities; (ii) default in payment of
principal on the Securities at maturity, upon required repurchase or upon
redemption pursuant to paragraphs 5 and 6 of the Securities, upon declaration or
otherwise; (iii) the failure by the Company to comply with its obligations under
ARTICLE IV of the Indenture (iv) failure by the Company to comply for 30 days
after notice with any of its obligations under the covenants described under
SECTION 3.9 of the Indenture or under other covenants specified in the Indenture
(in each case, other than a failure to purchase Securities, which shall
constitute an Event of Default under clause (ii) above), (v) the failure by the
Company to comply for 60 days after notice with its other agreements contained
in the Indenture, (vi) Indebtedness of the Company or any Restricted Subsidiary
if not paid within any applicable grace period after final maturity or is
accelerated by the holders thereof because of a default and the total amount of
<PAGE>
such Indebtedness unpaid or accelerated exceeds $5.0 million (the "cross
acceleration provision"), (vii) certain events of bankruptcy, insolvency or
reorganization of the Company or a Significant Subsidiary (the "bankruptcy
provisions"), (viii) any judgment or decree for the payment of money in excess
of $5.0 million is rendered against the Company or a Significant Subsidiary and
such judgment or decree shall remain undischarged or unstayed for a period of 60
days after such judgment becomes final and non-appealable (the "judgment default
provision") or (ix) any Subsidiary Guarantee ceases to be in full force and
effect (except as contemplated by the terms of the Indenture) or any Subsidiary
Guarantor denies or disaffirms its obligations under the Indenture or its
Subsidiary Guarantee. However, a default under clauses (iv) and (v) will not
constitute an Event of Default until the Trustee or the holders of more than 25%
in principal amount of the then outstanding Securities notify the Company of the
default and the Company does not cure such default within the time specified in
clauses (iv) and (v) hereof after receipt of such notice.
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the Securities may declare all
the Securities to be due and payable immediately. Certain events of bankruptcy
or insolvency are Events of Default which will result in the Securities being
due and payable immediately upon the occurrence of such Events of Default.
Securityholders may not enforce the Indenture or the Securities except
as provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Securities unless it receives reasonable indemnity or security. Subject to
certain limitations, Holders of a majority in principal amount of the Securities
may direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Securityholders notice of any continuing Default or Event of
Default (except a Default or Event of Default in payment of principal or
interest) if it determines that withholding notice is in their interest.
13. TRUSTEE DEALINGS WITH THE COMPANY
Subject to certain limitations set forth in the Indenture, the Trustee
under the Indenture, in its individual or any other capacity, may become the
owner or pledgee of Securities and may otherwise deal with and collect
obligations owed to it by the Company or its Affiliates and may otherwise deal
with the Company or its affiliates with the same rights it would have if it were
not Trustee.
14. NO RECOURSE AGAINST OTHERS
An incorporator, director, officer, employee, stockholder or
controlling person, as such, of the Company shall not have any liability for any
obligations of the Company under the Securities or the Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, each Securityholder waives and releases all
such liability. The waiver and release are part of the consideration for the
issue of the Securities.
15. AUTHENTICATION
This Security shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent acting on its behalf) manually signs the
certificate of authentication on the other side of this Security.
16. ABBREVIATIONS
Customary abbreviations may be used in the name of a Securityholder or
an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
<PAGE>
entirety), JT TEN (=joint tenants with rights of survivorship and not as tenants
in common), CUST (=custodian) and U/G/M/A (=Uniform Gift to Minors Act).
17. CUSIP NUMBERS
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures the Company has caused CUSIP numbers to be
printed on the Securities and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Securityholders. No representation is
made as to the accuracy of such numbers either as printed on the Securities or
as contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
18. GOVERNING LAW
This Security shall be governed by, and construed in accordance with,
the laws of the State of New York but without giving effect to applicable
principles of conflicts of law to the extent that the application of the laws of
another jurisdiction would be required thereby.
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this Security on the
books of the Company. The agent may substitute another to act for him.
_______________________________________________________________________________
Date: _______________ Your Signature ____________________
Signature Guarantee: ____________________________________
(Signature must be guaranteed)
_______________________________________________________________________________
Sign exactly as your name appears on the other side of this Security.
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to SECTION 3.6 or 3.9 of the Indenture, check either box:
<PAGE>
/ / / /
3.6 3.9
If you want to elect to have only part of this Security purchased by
the Company pursuant to SECTION 3.6 or 3.9 of the Indenture, state the amount in
principal amount (must be integral multiple of $1,000): $
Date: _______________ Your Signature: _________________________
(Sign exactly as your name appears on the other side
of the Security)
Signature Guarantee: _______________________________________
(Signature must be guaranteed)
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.
EXHIBIT C
FORM OF SUPPLEMENTAL INDENTURE
This Supplemental Indenture, dated as of [__________] (this
"Supplemental Indenture" or "Subsidiary Guarantee"), among [name of Subsidiary
Guarantor] (the "Subsidiary Guarantor"), NE Restaurant Company (together with
its successors and assigns, the "Company"), [each other then existing Subsidiary
Guarantor under the Indenture referred to below,] and United States Trust
Company of New York, as Trustee under the Indenture referred to below (the
"Trustee").
W I T N E S S E T H:
WHEREAS, the Company and the Trustee have heretofore executed and
delivered an Indenture, dated as of July 20, 1998 (as amended, supplemented,
waived or otherwise modified, the "Indenture"), providing for the issuance of an
aggregate principal amount of $100.0 million of 10 3/4% Senior Notes due 2008 of
the Company (the "Securities");
WHEREAS, SECTION 3.12 of the Indenture provides that the Company is
required to cause each Restricted Subsidiary created or acquired by the Company
to execute and deliver to the Trustee a Subsidiary Guarantee pursuant to which
such Subsidiary Guarantor will unconditionally Guarantee, on a joint and several
basis, the full and prompt payment of the principal of, premium, if any and
interest on the Securities and all other payment obligations under the Indenture
on a senior unsecured basis; and
WHEREAS, pursuant to SECTION 9.1 of the Indenture, the Trustee and the
Company are authorized to execute and deliver this Supplemental Indenture to
amend the Indenture, without the consent of any Securityholder;
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt of which is hereby acknowledged, the
<PAGE>
Subsidiary Guarantor, the Company[, the other Subsidiary Guarantors] and the
Trustee mutually covenant and agree for the equal and ratable benefit of the
holders of the Securities as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 DEFINED TERMS. As used in this Supplemental Indenture,
terms defined in the Indenture or in the preamble or recital hereto are used
herein as therein defined, except that the term "Holders" in this Supplemental
Indenture shall refer to the term "Holders" as defined in the Indenture and the
Trustee acting on behalf or for the benefit of such holders. The words "herein,"
"hereof" and "hereby" and other words of similar import used in this
Supplemental Indenture refer to this Supplemental Indenture as a whole and not
to any particular section hereof.
ARTICLE II
GUARANTEE
SECTION 2.1 GUARANTEE. The Subsidiary Guarantor hereby fully,
unconditionally and irrevocably guarantees, as primary obligor and not merely as
surety, jointly and severally with each other Subsidiary Guarantor, to each
Holder of the Securities and to the Trustee the full and punctual payment when
due, whether at maturity, by acceleration, by redemption or otherwise, of the
principal of, premium, if any, and interest on the Securities and all other
amounts payable under the Indenture (all the foregoing being hereinafter
collectively called the "Obligations"). The Subsidiary Guarantor further agrees
(to the extent permitted by law) that the Obligations may be extended or
renewed, in whole or in part, without notice or further assent from it, and that
it will remain bound under this ARTICLE II notwithstanding any extension or
renewal of any Obligation.
The Subsidiary Guarantor waives presentation to, demand of payment
from and protest to the Company of any of the Obligations and also waives notice
of protest for nonpayment. The Subsidiary Guarantor waives notice of any default
under the Securities or the Obligations. The obligations of the Subsidiary
Guarantor hereunder shall not be affected by (a) the failure of any Holder to
assert any claim or demand or to enforce any right or remedy against the Company
or any other person under the Indenture, the Securities or any other agreement
or otherwise; (b) any extension or renewal of any thereof; (c) any rescission,
waiver, amendment or modification of any of the terms or provisions of the
Indenture, the Securities or any other agreement; (d) the release of any
security held by any Holder or the Trustee for the Obligations or any of them;
(e) the failure of any Holder to exercise any right or remedy against any other
Subsidiary Guarantor; or (f) any change in the ownership of the Company.
The Subsidiary Guarantor further agrees that its Subsidiary Guarantee
constitutes a guarantee of payment when due (and not a guarantee of collection)
and waives any right to require that any resort be had by any Holder to any
security held for payment of the Obligations.
The obligations of the Subsidiary Guarantor hereunder shall not be
subject to any reduction, limitation, impairment or termination for any reason
(other than payment of the Obligations in full), including any claim of waiver,
release, surrender, alteration or compromise, and shall not be subject to any
defense of setoff, counterclaim, recoupment or termination whatsoever or by
reason of the invalidity, illegality or unenforceability of the Obligations or
<PAGE>
otherwise. Without limiting the generality of the foregoing, the obligations of
the Subsidiary Guarantor herein shall not be discharged or impaired or otherwise
affected by the failure of any Holder to assert any claim or demand or to
enforce any remedy under the Indenture, the Securities or any other agreement,
by any waiver or modification of any thereof, by any default, failure or delay,
willful or otherwise, in the performance of the Obligations, or by any other act
or thing or omission or delay to do any other act or thing which may or might in
any manner or to any extent vary the risk of the Subsidiary Guarantor or would
otherwise operate as a discharge of the Subsidiary Guarantor as a matter of law
or equity.
The Subsidiary Guarantor further agrees that its Subsidiary Guarantee
shall continue to be effective or be reinstated, as the case may be, if at any
time payment, or any part thereof, of principal of or interest on any of the
Obligations is rescinded or must otherwise be restored by any Holder upon the
bankruptcy or reorganization of the Company or otherwise.
In furtherance of the foregoing and not in limitation of any other
right which any Holder has at law or in equity against the Subsidiary Guarantor
by virtue hereof, upon the failure of the Company to pay any of the Obligations
when and as the same shall become due, whether at maturity, by acceleration, by
redemption or otherwise, the Subsidiary Guarantor hereby promises to and will,
upon receipt of written demand by the Trustee, forthwith pay, or cause to be
paid, in cash, to the Holders an amount equal to the sum of (i) the unpaid
amount of such Obligations then due and owing and (ii) accrued and unpaid
interest on such Obligations then due and owing (but only to the extent not
prohibited by law).
The Subsidiary Guarantor further agrees that, as between the
Subsidiary Guarantor, on the one hand, and the Holders, on the other hand, (x)
the maturity of the Obligations guaranteed hereby may be accelerated as provided
in the Indenture for the purposes of its Subsidiary Guarantee, notwithstanding
any stay, injunction or other prohibition preventing such acceleration in
respect of the Obligations guaranteed hereby and (y) in the event of any such
declaration of acceleration of such Obligations, such Obligations (whether or
not due and payable) shall forthwith become due and payable by the Subsidiary
Guarantor for the purposes of its Subsidiary Guarantee.
The Subsidiary Guarantor also agrees to pay any and all reasonable
costs and expenses (including reasonable attorneys' fees) incurred by the
Trustee or the Holders in enforcing any rights under this Section.
SECTION 2.2 LIMITATION ON LIABILITY; TERMINATION, RELEASE AND
DISCHARGE. The obligations of the Subsidiary Guarantor hereunder will be limited
to the maximum amount as will, after giving effect to all other contingent and
fixed liabilities of the Subsidiary Guarantor (including, without limitation,
any guarantees under the Senior Credit Agreement) and after giving effect to any
collections from or payments made by or on behalf of any other Subsidiary
Guarantor in respect of the obligations of such other Subsidiary Guarantor under
its Subsidiary Guarantee or pursuant to its contribution obligations under the
Indenture or as set forth below, result in the obligations of the Subsidiary
Guarantor under its Subsidiary Guarantee not constituting a fraudulent
conveyance or fraudulent transfer under federal or state law.
The Subsidiary Guarantor may consolidate with or merge into or sell
its assets to the Company or another Subsidiary Guarantor without limitation.
The Subsidiary Guarantor may consolidate with or merge into or sell all or
substantially all its assets to a corporation, partnership or trust other than
the Company or another Subsidiary Guarantor (whether or not affiliated with the
Subsidiary Guarantor). Upon the sale or disposition of the Subsidiary Guarantor
<PAGE>
(by merger, consolidation, the sale of all or substantially all of its assets)
to a Person (whether or not an Affiliate of the Subsidiary Guarantor) which is
not a Subsidiary of the Company, which sale or disposition is otherwise in
compliance with the Indenture (including SECTION 3.7), the Subsidiary Guarantor
shall be deemed released from all its obligations under the Indenture and its
Subsidiary Guarantee and this Subsidiary Guarantee shall terminate; PROVIDED,
HOWEVER, that any such termination shall occur only to the extent that all
obligations of the Subsidiary Guarantor under all of its guarantees of, and
under all of its pledges of assets or other security interests which secure, any
other Indebtedness of the Company shall also terminate upon such release, sale
or transfer.
SECTION 2.3 RIGHT OF CONTRIBUTION. The Subsidiary Guarantor hereby
agrees that to the extent that any Subsidiary Guarantor shall have paid more
than its proportionate share of any payment made on the obligations under the
Subsidiary Guarantees, such Subsidiary Guarantor shall be entitled to seek and
receive contribution from and against the Company or any other Subsidiary
Guarantor who has not paid its proportionate share of such payment. Each
Subsidiary Guarantor's right of contribution shall be subject to the terms and
conditions of SECTION 3.5 of the Indenture. The provisions of this SECTION 2.3
shall in no respect limit the obligations and liabilities of the Subsidiary
Guarantor to the Trustee and the Holders and the Subsidiary Guarantor shall
remain liable to the Trustee and the Holders for the full amount guaranteed by
the Subsidiary Guarantor hereunder.
SECTION 2.4 NO SUBROGATION. Notwithstanding any payment or payments
made by the Subsidiary Guarantor hereunder, the Subsidiary Guarantor shall not
be entitled to be subrogated to any of the rights of the Trustee or any Holder
against the Company or any other Subsidiary Guarantor or any collateral security
or guarantee or right of offset held by the Trustee or any Holder for the
payment of the Obligations, nor shall the Subsidiary Guarantor seek or be
entitled to seek any contribution or reimbursement from the Company or any other
Subsidiary Guarantor in respect of payments made by the Subsidiary Guarantor
hereunder, until all amounts owing to the Trustee and the Holders by the Company
on account of the Obligations are paid in full. If any amount shall be paid to
the Subsidiary Guarantor on account of such subrogation rights at any time when
all of the Obligations shall not have been paid in full, such amount shall be
held by the Subsidiary Guarantor in trust for the Trustee and the Holders,
segregated from other funds of the Subsidiary Guarantor, and shall, forthwith
upon receipt by the Subsidiary Guarantor, be turned over to the Trustee in the
exact form received by the Subsidiary Guarantor (duly indorsed by the Subsidiary
Guarantor to the Trustee, if required), to be applied against the Obligations.
SECTION 2.5 EXECUTION AND DELIVERY OF SUBSIDIARY GUARANTEE. To further
evidence the Subsidiary Guarantees set forth in Section 2.1, each Subsidiary
Guarantor hereby agrees that a notation of its Subsidiary Guarantee,
substantially in the form of Exhibit D to the Indenture, shall be endorsed on
each Security authenticated and delivered by the Trustee. The Subsidiary
Guarantee of any Subsidiary Guarantor shall be executed on behalf of such
Subsidiary Guarantor by either manual or facsimile signature of an Officer of
such Subsidiary Guarantor who shall have been duly authorized to so execute by
all requisite corporate action. The validity and enforceability of any
Subsidiary Guarantee shall not be affected by the fact that it is not affixed to
any particular Security.
Each of the Subsidiary Guarantors hereby agrees that its Subsidiary
Guarantee set forth in Section 2.1 shall remain in full force and effect
notwithstanding any failure to endorse on each Security a notation of such
Subsidiary Guarantee.
<PAGE>
If the Officer of a Subsidiary Guarantor whose signature is on this
Supplemental Indenture or a Subsidiary Guarantee no longer holds that office at
the time the Trustee authenticates the Security on which such Subsidiary
Guarantee is endorsed or at any time thereafter, such Subsidiary Guarantor's
Subsidiary Guarantee of such Security shall nevertheless be valid.
The delivery of any Security by the Trustee, after the authentication
thereof under the Indenture, shall constitute due delivery of any Subsidiary
Guarantee set forth in this Supplemental Indenture on behalf of each Subsidiary
Guarantor.
ARTICLE III
MISCELLANEOUS
SECTION 3.1 NOTICES. All notices and other communications pertaining
to this Guarantee or any Security shall be in writing and shall be deemed to
have been duly given upon the receipt thereof. Such notices shall be delivered
by hand, or mailed, certified or registered mail with postage prepaid (a) if to
the Subsidiary Guarantor, at its address set forth below, with a copy to the
Company as provided in the Indenture for notices to the Company, and (b) if to
the Holders or the Trustee, as provided in the Indenture. The Subsidiary
Guarantor by notice to the Trustee may designate additional or different
addresses for subsequent notices to or communications with the Subsidiary
Guarantor.
SECTION 3.2 PARTIES. Nothing expressed or mentioned in this Guarantee
is intended or shall be construed to give any Person, firm or corporation, other
than the Holders and the Trustee and the holders of any Subsidiary Guarantor
Senior Indebtedness, any legal or equitable right, remedy or claim under or in
respect of this Guarantee or any provision herein contained.
SECTION 3.3 GOVERNING LAW. THIS SUPPLEMENTAL INDENTURE AND THE
SUBSIDIARY GUARANTEES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF
ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
SECTION 3.4 SEVERABILITY CLAUSE. In case any provision in this
Guarantee shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby and such provision shall be ineffective only to the extent of
such invalidity, illegality or unenforceability.
SECTION 3.5 WAIVERS AND REMEDIES. Neither a failure nor a delay on the
part of the Holders or the Trustee in exercising any right, power or privilege
under this Guarantee shall operate as a waiver thereof, nor shall a single or
partial exercise thereof preclude any other or further exercise of any right,
power or privilege. The rights, remedies and benefits of the Holders and the
Trustee herein expressly specified are cumulative and not exclusive of any other
rights, remedies or benefits which either may have under this Guarantee or at
law, in equity, by statute or otherwise.
SECTION 3.6 SUCCESSORS AND ASSIGNS. Subject to SECTION 2.2 hereof, (a)
this Guarantee shall be binding upon and inure to the benefit of the Subsidiary
Guarantor, the Trustee, any other parties hereto, the Holders and their
respective successors and assigns and (b) in the event of any transfer or
assignment of rights by any Holder, the rights and privileges conferred upon
that party in this Guarantee and in the Securities shall automatically extend to
<PAGE>
and be vested in such transferee or assignee, all subject to the terms and
conditions of this Guarantee and the Indenture.
SECTION 3.7 MODIFICATION, ETC. Subject to the provisions of, and
except as otherwise provided in, ARTICLE IX of the Indenture (including without
limitation SECTIONS 9.1 and 9.2 thereof), no modification, amendment or waiver
of any provision of this Guarantee, nor the consent to any departure by the
Subsidiary Guarantor therefrom, shall in any event be effective unless the same
shall be in writing and consented to by the Trustee (with the consent of the
Holders of at least a majority of the then outstanding Securities if required by
SECTION 9.2 of the Indenture) and then such waiver or consent shall be effective
only in the specific instance and for the purpose for which it was given. No
notice to or demand on the Subsidiary Guarantor in any case shall entitle such
Subsidiary Guarantor or any other guarantor to any other or further notice or
demand in the same, similar or other circumstances.
SECTION 3.8 ENTIRE AGREEMENT. This Guarantee is intended by the
parties to be a final expression of their agreement in respect of the subject
matter contained herein and, together with the Indenture, supersedes all prior
agreements and understandings between the parties with respect to such subject
matter.
SECTION 3.9 RATIFICATION OF INDENTURE; SUPPLEMENTAL INDENTURES PART OF
INDENTURE. Except as expressly amended hereby, the Indenture is in all respects
ratified and confirmed and all the terms, conditions and provisions thereof
shall remain in full force and effect. This Supplemental Indenture shall form a
part of the Indenture for all purposes, and every holder of Securities
heretofore or hereafter authenticated and delivered shall be bound hereby. The
Trustee makes no representation or warranty as to the validity or sufficiency of
this Supplemental Indenture. Furthermore, each Subsidiary Guarantor that is a
party hereto hereby assumes any and all obligations of a Subsidiary Guarantor
set forth in the Indenture, whether or not such obligations are expressly
specified in this Supplemental Indenture.
SECTION 3.10 COUNTERPARTS. The parties hereto may sign one or more
copies of this Supplemental Indenture in counterparts, all of which together
shall constitute one and the same agreement.
SECTION 3.11 HEADINGS. The headings of the Articles and the sections
in this Guarantee are for convenience of reference only and shall not be deemed
to alter or affect the meaning or interpretation of any provisions hereof.
SECTION 3.12 THE TRUSTEE. The Trustee shall not be responsible in any
manner whatsoever for or in respect of the validity or sufficiency of this
Guarantee or for or in respect of the recitals contained herein, all of which
recitals are made solely by the Company and the Subsidiary Guarantor.
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed as of the date first above written.
NE RESTAURANT COMPANY, INC.
By:
______________________________
Name:
Title:
<PAGE>
[NAME OF SUBSIDIARY GUARANTOR],
By:
_________________________________
Name:
Title:
Address:
By:
__________________________________
Name:
Title:
UNITED STATES TRUST COMPANY OF NEW YORK,
as Trustee
By:
_____________________________________
Name:
Title:
EXHIBIT D
FORM OF NOTATION OF SUBSIDIARY GUARANTEE
____________, __________ and __________ (collectively, the "SUBSIDIARY
GUARANTORS"), have each jointly and severally unconditionally guaranteed on a
senior unsecured basis (such guarantee by each Subsidiary Guarantor being
referred to herein as the "SUBSIDIARY GUARANTEE") (i) the due and punctual
payment of the principal of and interest on the Securities, subject to any
applicable grace period, whether at maturity, by acceleration or otherwise, the
due and punctual payment of interest on the overdue principal and interest, if
any, on the Securities, to the extent lawful, and the due and punctual
performance of all other obligations of the Company to the Holders or the
Trustee all in accordance with the terms set forth in Article X of the Indenture
dated as of July 20, 1998 between the Company and the Trustee (as supplemented,
the "Indenture"), and (ii) in case of any extension of time of payment or
renewal of any Securities or any of such other obligations, that the same will
be promptly paid in full when due or performed in accordance with the terms of
the extension or renewal, whether at stated maturity, by acceleration or
otherwise.
The obligations of each Subsidiary Guarantor to the Holders of
Securities and to the Trustee pursuant to the Subsidiary Guarantee and the
Indenture are expressly set forth and are senior unsecured obligations of each
Subsidiary Guarantor, to the extent and in the manner provided, in Article X of
the Indenture, and reference is hereby made to such Indenture for the precise
terms of the Subsidiary Guarantee therein made.
No stockholder, officer, director or incorporator, as such, past,
present or future, of each Subsidiary Guarantor shall have any liability under
the Subsidiary Guarantee by reason of his or its status as such stockholder,
<PAGE>
officer, director or incorporator.
The Subsidiary Guarantee shall not be valid or obligatory for any
purpose until the certificate of authentication on the Securities upon which the
Subsidiary Guarantee is noted shall have been executed by the Trustee under the
Indenture by the manual signature of one of its authorized officers. Terms used
herein and not otherwise defined have the meanings assigned to them in the
Indenture.
[Guarantor]
By:______________________________
Name:
Title:
[Guarantor]
By:______________________________
Name:
Title:
[Guarantor]
By:______________________________
Name:
Title: