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EXHIBIT 4.16
EXECUTION COPY
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AMERICAN RESTAURANT GROUP, INC.
AND
SUBSIDIARY GUARANTORS
AND
U.S. TRUST COMPANY OF CALIFORNIA, N.A.
Trustee
_________________________
SECOND SUPPLEMENTAL
INDENTURE
Dated as of August 28, 1996
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SECOND SUPPLEMENTAL INDENTURE dated as of August 28, 1996 among
American Restaurant Group, Inc., a Delaware corporation (the "Company"), the
Subsidiary Guarantors and U.S. Trust Company of California, N.A., a national
banking association, as trustee (the "Trustee") under the Indenture dated as of
September 15, 1992, as amended by a First Supplemental Indenture dated as of
December 9, 1993 (the "Indenture").
RECITALS
WHEREAS, pursuant to the Indenture, the Company issued
$120,000,000 aggregate principal amount of its 12% Senior Secured Notes due
September 15, 1998 (the "Securities");
WHEREAS, Section 9.02 of the Indenture provides, among other
things, that the Company, the Subsidiary Guarantors and the Trustee may, with
the consent of the holders of at least a majority in principal amount of the
then outstanding Securities (or, in the case of certain amendments, the consent
of each Securityholder affected), amend the Indenture and the Securities in
certain respects;
WHEREAS, the Company, pursuant to the foregoing authority,
proposes in and by this Second Supplemental Indenture to amend the Indenture
and the Securities in certain respects; and
WHEREAS, all things necessary to make this Second Supplemental
Indenture a valid agreement of the Company, the Subsidiary Guarantors and the
Trustee and a valid amendment of and supplement to the Indenture and the
Securities have been done.
NOW, THEREFORE, THIS SECOND SUPPLEMENTAL INDENTURE WITNESSETH:
For and in consideration of the premises, the Company, the
Subsidiary Guarantors and the Trustee agree as follows:
ARTICLE ONE
AMENDMENTS TO THE INDENTURE AND THE SECURITIES
SECTION 1.01. Amendment to Section 1.01--Consolidated EBITDA.
The definition of "Consolidated EBITDA" contained in Section 1.01 of the
Indenture is hereby amended by (a) adding the following new clauses (vii) and
(viii) after clause (vi) thereof:
", (vii) in the case of calculations pursuant to Sections 4.04
and 4.26 only, rental expense attributable to Operating Leases
resulting from Sale/leasebacks (other than Specified
Sale/leaseback Transactions) consummated on or after the
Supplemental Indenture Effective Date, and (viii) in the case
of calculations pursuant to Sections 4.04 and 4.26 only, to
the extent
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Consolidated Net Income has been reduced thereby, the amounts
described in clause (v) of the definition of Net Cash Proceeds"
and (b) adding the following clause (c) after clause (b) thereof:
"and (c) in the case of calculations pursuant to Sections 4.04
and 4.26 only, any portion of Consolidated EBITDA for such
period (determined without giving effect to this clause (c))
attributable to any operating unit, or any material portion of
the assets of an operating unit, of the Company and its
Subsidiaries as to which an EBITDA Adjustment Amount has been
established"
SECTION 1.02. Amendment to Section 1.01--Net Cash Proceeds.
The definition of "Net Cash Proceeds" contained in Section 1.01 of the
Indenture is hereby amended by adding the following new clause (v) to the end
thereof:
"and (v) in the case of the Required Black Angus
Sale/leaseback Transaction, (1) consent fees paid by the
Company in connection with the Second Supplemental Indenture
or in connection with the First Supplemental Indenture with
respect to the Indenture dated as of December 1, 1993
governing the Company's $50,000,000 Senior Secured Notes Due
September 15, 1998, (2) reasonable consent fees, if any, paid
to the Lenders in connection with modifications to the Credit
Agreement or to the holders of the Subordinated Notes in
connection with modifications to the Subordinated Loan
Agreement, in each case consummated substantially concurrently
with the Supplemental Indenture Effective Date, and (3)
without duplication of clause (i) above, the reasonable fees
and expenses of advisors and legal counsel to the Company, the
Trustee, the Holders, the Credit Agent, the Lenders or the
holders of the Subordinated Notes, in each case to the extent
reimbursed by the Company, in connection with the transactions
described in clauses (1) and (2) above, all as certified in
reasonable detail to the Trustee by the Chief Financial
Officer of the Company"
SECTION 1.03. Amendment to Section 1.01--Net Proceeds Offer
Trigger Date. The definition of "Net Proceeds Offer Trigger Date" contained in
Section 1.01 of the Indenture is hereby amended by (a) inserting the words "the
Reinvestment Net Cash Proceeds relating to" before the words "an Asset Sale"
contained in clause (b) thereof, (b) changing each reference to "Net Cash
Proceeds" or "gross proceeds" in clause (b) thereof to "Reinvestment Net Cash
Proceeds" and (c) adding a new clause (c) to the end thereof which shall read
in its entirety as follows:
"and (c) with respect to the Net Cash Proceeds (other than
Reinvestment Net Cash Proceeds) relating to an Asset Sale, the
date of receipt of such Net Cash Proceeds"
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SECTION 1.04. Amendment to Section 1.01--New Definitions.
Section 1.01 of the Indenture is hereby amended by adding the following
definitions in the appropriate alphabetical order:
"Aggregate EBITDA Adjustment Amount" means, at any date of
determination, the aggregate of all EBITDA Adjustment Amounts (if any)
determined with respect to Asset Sales consummated during the period
from the Supplemental Indenture Effective Date to and including such
date of determination.
"Consent Solicitation Statement" means the Consent
Solicitation Statement of the Company dated August 2, 1996 relating to
the Second Supplemental Indenture.
"EBITDA Adjustment Amount" means, with respect to any Asset
Sale (other than a Sale/leaseback) consummated on or after the
Supplemental Indenture Effective Date involving an operating unit, or
a material portion of the assets of an operating unit, of the Company
and its Subsidiaries, that portion of Consolidated EBITDA attributable
to such operating unit or material portion of the assets thereof for
the most recent period of four consecutive fiscal quarters ending
prior to the date of such Asset Sale for which the relevant financial
information is available, as certified in reasonable detail to the
Trustee by the Chief Financial Officer of the Company.
"Reinvestment Net Cash Proceeds" means, with respect to any
Asset Sale, the maximum portion of the Net Cash Proceeds thereof that
may be reinvested as provided in the first proviso contained in clause
(A) of Section 4.17 (it being understood that all Net Cash Proceeds of
a Specified Sale/leaseback Transaction shall constitute Reinvestment
Net Cash Proceeds).
"Required Black Angus Sale/leaseback Transaction" means the
Sale/leaseback described in Section 4.24 to the extent such
transaction generates the minimum gross cash proceeds and minimum Net
Cash Proceeds required thereby.
"Second Supplemental Indenture" means the Second Supplemental
Indenture, dated as of August 28, 1996, with respect to this
Indenture.
"Specified Reinvested Net Cash Proceeds" shall have the
meaning provided in Section 3.07.
"Specified Sale/leaseback Transaction" means any
Sale/leaseback with respect to all or any portion of the assets
comprising a restaurant first opened by the Company or any of its
Subsidiaries after the Supplemental Indenture Effective Date.
"Supplemental Indenture Effective Date" means the date on
which the Second Supplemental Indenture has become effective in
accordance with its terms.
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"13% Security" means any Security or portion thereof which
bears interest at a stated per annum rate equal to 13% (representing
the portion of the Securities (and any replacements therefor) as to
which consents have been obtained pursuant to the Consent Solicitation
Statement).
"12% Security" means any Security or portion thereof which
bears interest at a stated per annum rate equal to 12% (representing
the portion of the Securities (and any replacements therefor) as to
which consents have not been obtained pursuant to the Consent
Solicitation Statement).
SECTION 1.05. Amendment to Section 1.01--Deletion of Certain
Definitions. Section 1.01 of the Indenture is hereby amended by deleting in
their entirety the definitions "Accelerated Payment", "Accelerated Payment
Date", "Acceleration Date" and "Offer".
SECTION 1.06. Amendment to Section 3.07. Section 3.07 of the
Indenture is hereby amended by (a) inserting at the end of the second proviso
of paragraph (a) thereof the parenthetical "(so long as such Net Cash Proceeds
are applied to prepay Working Capital Loans, secure Letter of Credit
Obligations or reduce the outstanding amount of letters of credit under the
Credit Agreement)"; (b) changing the amount "$5,000,000" contained in the third
proviso of paragraph (a) thereof to the amount "$2,000,000"; (c) deleting the
last sentence of paragraph (a) thereof; (d) replacing the words "not more than
10 days after" contained in paragraph (b) thereof with the word "on"; (e)
inserting after the word "tendered" contained in clause (7) of paragraph (b)
thereof the parenthetical "(or, in the case of 13% Securities, deemed
tendered)"; and (f) replacing the last paragraph of paragraph (b) thereof with
the following paragraphs:
"Notwithstanding anything to the contrary in
this Section 3.07, with respect to each Net Proceeds Offer,
each Holder of 13% Securities shall, without any action on the
part of such Holder, (i) be deemed to have tendered on the
relevant Net Proceeds Offer Trigger Date the entire amount of
such Holder's 13% Securities in connection with such Net
Proceeds Offer and (ii) be entitled to redemption of a portion
of such Holder's 13% Securities on a pro rata basis determined
on the assumption that all Securities (including all 12%
Securities) have been tendered in connection with such Net
Proceeds Offer, with the Proceeds Purchase Date (a "13%
Securities Proceeds Purchase Date") associated with such
redemption being the Business Day immediately succeeding such
Net Proceeds Offer Trigger Date. Unless the Company defaults
in making payment therefor in accordance with the next
succeeding paragraph, the 13% Securities to be so redeemed
shall cease to accrue interest after the relevant 13%
Securities Proceeds Purchase Date.
On or before a Proceeds Purchase Date
(including, in the case of 13% Securities, the applicable 13%
Securities Proceeds Purchase Date), the Company shall (i)
accept for payment Securities or portions thereof tendered
(or, in the case of 13% Securities, deemed tendered) pursuant
to the
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Net Proceeds Offer (with the amount so accepted being
calculated (x) in the case of 13% Securities, in the manner
specified in the preceding paragraph and (y) in the case of
12% Securities, on a pro rata basis if required pursuant to
paragraph (7) above) and (ii) by 10:00 a.m., New York City
time, deposit with the Paying Agent U.S. Legal Tender or
Securities acquired in the manner described in clause (a) of
this Section 3.07 sufficient to pay the purchase price of all
Securities or portions thereof so accepted or to be credited
against the Net Proceeds Offer. Upon surrender of the
relevant Securities to the Paying Agent, the Paying Agent
shall promptly mail or deliver to Holders of Securities so
accepted payment in an amount equal to the purchase price, and
the Trustee shall promptly authenticate and mail or deliver to
such Holders new Securities equal in principal amount to any
unpurchased portion of the Securities surrendered. Any
Securities not so accepted shall be promptly mailed or
delivered by the Company to the Holder thereof. For purposes
of this Section 3.07, the Trustee shall act as the Paying
Agent.
In the event that any Net Cash Proceeds
subject to a Net Proceeds Offer shall remain ("Remaining Net
Cash Proceeds") after the Proceeds Purchase Date associated
with the redemption of 12% Securities in connection with such
Net Proceeds Offer, unless the Company shall have elected to
reinvest such Net Cash Proceeds ("Specified Reinvested Net
Cash Proceeds") in the manner described, and subject to the
limitations set forth, in Section 4.17(iii)(A), such Proceeds
Purchase Date shall be deemed to be a Net Proceeds Offer
Trigger Date with respect to such Remaining Net Cash Proceeds
and the Company shall make a Net Proceeds Offer (a "Subsequent
Net Proceeds Offer") with respect to such Remaining Net Cash
Proceeds. Any Remaining Net Cash Proceeds remaining after the
purchase of Securities in connection with a Subsequent Net
Proceeds Offer shall become general unrestricted funds of the
Company and its Subsidiaries, and may be applied without
regard to the restrictions contained in this Section 3.07,
Section 4.13(d)(vii) and Section 4.17."
SECTION 1.07. Amendment to Section 4.04. Section 4.04 of the
Indenture is hereby amended and restated in its entirety as follows:
"SECTION 4.04. Maintenance of Consolidated EBITDA.
(a) The Company shall not permit the sum of
(i) Consolidated EBITDA for any period of four consecutive
fiscal quarters ending on any date set forth below plus (ii)
the Aggregate EBITDA Adjustment Amount as of such date to be
less than the amount set forth opposite such date:
Date Amount
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December 30, 1996 $33,000,000
March 31, 1997 34,000,000
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June 30, 1997 35,000,000
September 29, 1997 35,500,000
December 29, 1997 36,000,000
March 30, 1998 36,500,000
June 29, 1998 37,000,000
(b) The Company shall not permit the sum of
(i) Consolidated EBITDA for the period of two consecutive
fiscal quarters ending September 23, 1996 plus (ii) 50% of the
Aggregate EBITDA Adjustment Amount as of the last day of such
period to be less than $14,000,000.
(c) The Company shall not permit the sum of
(i) Consolidated EBITDA for any period of two consecutive
fiscal quarters ending after September 23, 1996 plus (ii) 50%
of the Aggregate EBITDA Adjustment Amount as of the last day
of such period to be less than $13,000,000."
SECTION 1.08. Amendment to Section 4.08. Section 4.08 of the
Indenture is hereby amended by (a) changing the number "120" contained in the
first sentence of paragraph (a) thereof to the number "90"; (b) inserting the
words "and within 45 days after the end of the Company's first, second and
third fiscal quarters of each fiscal year" after the words "the Company's
fiscal year" contained in the first sentence of paragraph (a) thereof; (c)
inserting the words "(or portion of the fiscal year ending with the fiscal
quarter covered by such Officers' Certificate, in the case of quarterly
certificates)" after each occurrence of the word "year" (other than the first
such occurrence) contained in the first sentence of paragraph (a) thereof; and
(d) deleting clause (iii) of paragraph (c) thereof (which clause (iii) ends
immediately before the words ", an Officers' Certificate") in its entirety.
SECTION 1.09. Amendment to Section 4.13. Clause (vi) of
paragraph (d) of Section 4.13 of the Indenture is hereby amended by (a) adding
a subclause reference "(1)" to the beginning thereof, (b) changing each
reference to "clause (vi)" contained in such newly designated subclause (1) to
the reference "subclause (1)" and (c) adding a new subclause (2) after the
amount "$15,000,000" contained therein which shall read in its entirety as
follows:
"and (2) Indebtedness consisting of Capital Lease Obligations
incurred in connection with any Sale/leaseback consummated in
order to comply with the requirements of Section 4.24 or 4.25
and any renewals, extensions, refinancings or replacements
thereof"
SECTION 1.10. Amendment to Section 4.17. Section 4.17 of the
Indenture is hereby amended by:
(a) amending and restating in its entirety the first proviso
contained in clause (A) thereof as follows:
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"provided, however, that (x) the Net Cash Proceeds which may
be so reinvested pursuant to any Asset Sale (other than a
Specified Sale-leaseback Transaction) shall not exceed the sum
of (I) 5% of such Net Cash Proceeds (or, in the case of the
Required Black Angus Sale/leaseback Transaction, 10% of such
Net Cash Proceeds) and (II) any Specified Reinvested Net Cash
Proceeds associated with such Asset Sale, and (y) the total
Net Cash Proceeds (including Specified Reinvested Net Cash
Proceeds) which may be so reinvested pursuant to all Asset
Sales (other than Specified Sale/leaseback Transactions)
consummated after the Supplemental Indenture Effective Date
shall not exceed $8,000,000"; and
(b) amending and restating in its entirety the penultimate
proviso thereof as follows:
"; provided, further, that the Company may exclude from the
provisions of this Section 4.17, to the extent applicable, up
to $2,000,000 of Net Cash Proceeds which the Company has
elected to exclude from the obligation to make a Net Proceeds
Offer pursuant to and in accordance with Section 3.07(a) so
long as such Net Cash Proceeds are applied to prepay Working
Capital Loans, secure Letter of Credit Obligations or reduce
the outstanding amount of letters of credit under the Credit
Agreement".
SECTION 1.11. New Covenants. The Indenture is hereby amended
by adding the following Sections to the end of Article Four thereof:
"SECTION 4.24. Black Angus Sale/leaseback Transaction.
After July 15, 1996 and on or before
September 15, 1996, the Company and the relevant Subsidiaries
shall consummate a Sale/leaseback transaction with respect to
Black Angus restaurants generating gross cash proceeds equal
to at least $48,000,000 and Net Cash Proceeds equal to at
least $43,500,000, provided, that no more than 24 such
restaurants may be the subject of such Sale/leaseback
transaction for the purpose of complying with this Section
4.24.
SECTION 4.25. Additional Asset Sales.
After July 15, 1996 and on or before December
31, 1996, the Company and its Subsidiaries shall consummate
one or more Asset Sales (including Sale/leasebacks but
excluding the Required Black Angus Sale/leaseback Transaction)
generating Net Cash Proceeds equal to at least $25,000,000.
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SECTION 4.26. Senior Executive Compensation.
The Company shall not permit the aggregate
base salaries of Xxxxx Xxxxxxx and Xxxxx Xxxxxxx (the "Senior
Executives") to exceed $1,938,575. Commencing on the
Supplemental Indenture Effective Date, the rate at which the
salaries of the Senior Executives are earned shall be reduced
by an aggregate amount equal to 20% of the aggregate base
salaries of the Senior Executives then in effect (the
aggregate amount of any such reduction for any fiscal year or,
in the case of the 1996 fiscal year, the portion thereof since
the Supplemental Indenture Effective Date, being referred to
as the "Holdback Amount"). The Company shall not permit any
portion of the Holdback Amount or any bonuses or other form of
compensation (other than (a) the reduced base salaries and (b)
benefits of the type historically provided by the Company to
the Senior Executives (including life insurance, medical,
disability and automobile benefits)) to be paid to the Senior
Executives with respect to any fiscal year of the Company
until the audited financial statements of the Company for such
fiscal year have been delivered to the Trustee. After such
audited financial statements have been so delivered, the
ability of the Company to pay such Holdback Amount and bonuses
to the Senior Executives shall be determined on the basis of
the sum of Consolidated EBITDA for the relevant fiscal year
plus the Aggregate EBITDA Adjustment Amount as of the last day
of such fiscal year, as set forth below:
Consolidated EBITDA plus Holdback Amount Payment/
Aggregate EBITDA Adjustment Amount Bonus Payment
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Less than $28,000,000 The Company shall defer payment
of the entire Holdback Amount.
The Company shall pay no
bonuses to the Senior Executives.
$28,000,000-$32,999,999 The Company may pay one-half of
the Holdback Amount. The
Company shall defer payment of
the remaining one-half of the
Holdback Amount. The Company
shall pay no bonuses to the Senior
Executives.
$33,000,000-$39,999,999 The Company may pay the entire
Holdback Amount. The Company
shall pay no bonuses to the Senior
Executives.
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$40,000,000-$44,999,999 The Company may pay the entire
Holdback Amount. In addition,
the Company may pay bonuses to
the Senior Executives in an
aggregate amount not to exceed
10% of the aggregate base salaries
of the Senior Executives for the
preceding fiscal year.
$45,000,000-$49,999,999 The Company may pay the entire
Holdback Amount. In addition,
the Company may pay bonuses to
the Senior Executives in an
aggregate amount not to exceed
20% of the aggregate base salaries
of the Senior Executives for the
preceding fiscal year.
$50,000,000 or above The Company may pay the entire
Holdback Amount. In addition,
the Company may pay bonuses to
the Senior Executives in an amount
determined by the Board of
Directors of the Company.
Any Holdback Amount that is deferred as provided above may be
paid by the Company upon delivery to the Trustee of audited
financial statements of the Company in any subsequent year if
the sum of Consolidated EBITDA for the fiscal year covered by
such financial statements plus the Aggregate EBITDA Adjustment
Amount as of the last day of such fiscal year is at least
$36,500,000. The Company shall not pay any Holdback Amount or
bonuses to the Senior Executives at any time when a Default or
Event of Default (other than solely pursuant to Section 4.04)
shall have occurred and be continuing."
SECTION 1.12. Amendment to Section 6.01. Section 6.01 of the
Indenture is hereby amended by adding the following words to the end of the
parenthetical contained in the last paragraph thereof:
"and other than in the case of any Default under Section 4.04,
4.24 or 4.25, which Defaults shall be Events of Default
without any requirement for the giving of notice and without
the passage of time specified in this paragraph"
SECTION 1.13. Deletion of Certain References to Section 4.04.
The Indenture is hereby amended by deleting each reference to Section 4.04 from
(a) the definition of "Paying Agent" contained in Section 1.01 thereof, (b)
Section 2.03 thereof, (c)
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Section 2.06 thereof and (d) the form of Option of Holder to Elect Purchase.
In addition, Section 6.01 of the Indenture is hereby amended by deleting the
words "4.04 or" appearing before the reference to Section 4.17 contained in the
last paragraph thereof.
SECTION 1.14. Deletion of References to Accelerated Payments.
The Indenture is hereby amended by (a) deleting the words "an Accelerated
Payment or" from paragraph (2) of Section 6.01 thereof and (b) deleting the
words "an Accelerated Payment and" from Section 7.05 thereof. In addition,
each Security and Exhibit A to the Indenture are hereby amended by deleting the
words ", including an Accelerated Payment" from paragraph 18 thereof.
SECTION 1.15. Amendment to Paragraph 6 of the Securities and
the Form of Note. Paragraph 6 of each Security and Exhibit A to the Indenture
is hereby amended by adding the following sentence after the second sentence
thereof:
"In addition, the Company may credit against such sinking fund
payment (other than the portion thereof allocable to 12%
Securities) 100% of the principal amount of any Securities
previously purchased by the Company pursuant to a Net Proceeds
Offer."
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SECTION 1.16. Amendment to Paragraph 8 of the Securities and
the Form of Note. Paragraph 8 of each Security and Exhibit A to the Indenture
is hereby amended and restated in its entirety as follows:
"8. Maintenance of Consolidated EBITDA.
The Indenture requires the Company to
maintain Consolidated EBITDA (subject to certain adjustments)
for certain periods specified therein at the levels specified
therein."
SECTION 1.17. Amendment to Timing of Interest Payments and
Record Dates. Each Security and Exhibit A to the Indenture are hereby amended
by (a) deleting the dates listed after the caption "Interest Payment Dates" and
inserting, in lieu thereof, the dates "March 15, June 15, September 15 and
December 15", (b) deleting the dates listed after the caption "Record Dates"
and inserting, in lieu thereof, the dates "March 1, June 1, September 1 and
December 1" and (c) deleting the words "semi-annually on March 15 and September
15 of each year" contained in paragraph 1 thereof and inserting, in lieu
thereof, the words "quarterly on March 15, June 15, September 15 and December
15 of each year". The amendments described in this Section 1.17 shall not be
applicable to any 12% Security.
SECTION 1.18. Amendment to Interest Rate. Each Security and
Exhibit A to the Indenture are hereby amended by changing each reference to the
percentage "12%" to the percentage "13%". In addition, each Security and
Exhibit A to the Indenture are hereby amended by changing the percentage "14%"
contained in paragraph 1 thereof to the percentage "15%". The amendments
described in this Section 1.18 shall not be applicable to any 12% Security.
ARTICLE TWO
MISCELLANEOUS
SECTION 2.01. Conditions Precedent; Reaffirmation of
Subsidiary Guarantee. The effectiveness of this Second Supplemental Indenture
is conditioned upon the receipt by the Trustee of (a) counterparts hereof
executed and delivered by the Company and each Subsidiary Guarantor and (b) a
satisfactory opinion of counsel stating that this Second Supplemental Indenture
complies with the provisions of Section 9.02 of the Indenture and covering
other customary corporate matters, which opinion may be relied upon by each
person that is a Securityholder on the Supplemental Indenture Effective Date.
By its execution and delivery of this Second Supplemental Indenture, each
Subsidiary Guarantor reaffirms and restates its obligation set forth in Article
11 of the Indenture.
SECTION 2.02. Incorporation of Indenture. All the provisions
of this Second Supplemental Indenture shall be deemed to be incorporated in,
and made a part of, the Indenture; and the Indenture, as supplemented and
amended by this Second Supplemental Indenture, shall be read, taken and
construed as one and the same instrument.
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SECTION 2.03. Headings. The headings of the Articles and
Sections of this Second Supplemental Indenture are inserted for convenience of
reference and shall not be deemed to be a part thereof.
SECTION 2.04. Counterparts. This Second Supplemental
Indenture may be executed in any number of counterparts, each of which so
executed shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same instrument.
SECTION 2.05. Conflict with Trust Indenture Act. If any
provision hereof limits, qualifies or conflicts with another provision hereof
which is required to be included in this Second Supplemental Indenture by any
of the provisions of the Trust Indenture Act, such required provision shall
control.
SECTION 2.06. Successors. All covenants and agreements in
this Second Supplemental Indenture by the Company and each Subsidiary Guarantor
shall bind their respective successors. All covenants and agreements of the
Trustee in this Second Supplemental Indenture shall bind its successor.
SECTION 2.07. Separability Clause. In case any provision in
this Second Supplemental Indenture shall be invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby.
SECTION 2.08. Benefits of Second Supplemental Indenture.
Nothing in this Second Supplemental Indenture, express or implied, shall give
to any person, other than the
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parties hereto and their successors hereunder and the Holders, any benefit or
any legal or equitable right, remedy or claim under this Second Supplemental
Indenture.
SECTION 2.09. Terms Defined. All terms defined elsewhere in
the Indenture have the same meanings herein.
SECTION 2.10. Expenses. The Company agrees to pay the
reasonable costs and expenses of the Trustee and the Holders, including the
reasonable expenses of one firm of counsel to certain of the Holders, in
connection with the negotiation and execution of this Second Supplemental
Indenture.
SECTION 2.11. Acknowledgement of Waiver, etc. The Company
and the Trustee hereby acknowledge that, in connection with the Consent
Solicitation Statement, the holders of a majority in principal amount of
outstanding Securities have waived compliance with (a) the requirements of
Sections 4.04 and 4.08 of the Indenture (as in effect prior to giving effect to
this Second Supplemental Indenture), (b) the Consent Period requirement of
Section 9.02 of the Indenture and (c) any restrictions contained in the
Indenture on dividing the existing Global Security into two separate Global
Securities, with one such Global Security evidencing the 13% Securities (i.e.,
the portion of the Securities as to which consents have been obtained pursuant
to the Consent Solicitation Statement) and the other such Global Security
evidencing the 12% Securities (i.e., the portion of the Securities as to which
consents have not been obtained pursuant to the Consent Solicitation
Statement). The Company also hereby instructs the Trustee to distribute to the
Consenting Holders the Consent Payments (as each such term is defined in the
Consent Solicitation Statement) in the amounts, and at the times, specified in
the Consent Solicitation Statement.
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IN WITNESS WHEREOF, the parties hereto have caused this Second
Supplemental Indenture to be duly executed and attested, all as of the day and
year first above written.
AMERICAN RESTAURANT GROUP, INC.
By: /s/ XXXXXXX X. XxXXXXXXX, XX.
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Name: Xxxxxxx X. XxXxxxxxx, Xx.
Title: Vice President and
Chief Financial Officer
U.S. TRUST COMPANY OF CALIFORNIA, N.A.
By: /s/ XXXXXX X. XXXXX
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Name: Xxxxxx X. Xxxxx
Title: Senior Vice President
SUBSIDIARY GUARANTORS:
ARG ENTERPRISES, INC.
SPECTRUM FOODS, INC.
SPOONS RESTAURANTS, INC.
ARG PROPERTY MANAGEMENT CORPORATION
XXXXXX'X, INC.
LOCAL FAVORITE, INC.
By: /s/ XXXXXXX X. XxXXXXXXX, XX.
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Name: Xxxxxxx X. XxXxxxxxx, Xx.
Title: Vice President and
Chief Financial Officer
(for each of the above-listed
Subsidiary Guarantors)
