EXHIBIT 4.8
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FRI-MRD CORPORATION
NOTE AGREEMENT
Dated as of June 9, 1998
Re:
$24,000,000 14.0% Senior Secured Discount Notes
due January 24, 2002
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TABLE OF CONTENTS
SECTION HEADING PAGE
SECTION 1. DESCRIPTION OF NOTES AND COMMITMENT........................................... 1
Section 1.1. Description of Notes............................................ 1
Section 1.2. Commitment, Closing Date........................................ 2
SECTION 2. PREPAYMENT OF NOTES........................................................... 2
Section 2.1. Optional Prepayments............................................ 2
Section 2.2. Notice of Prepayments........................................... 2
Section 2.3. Allocation of Prepayments....................................... 2
SECTION 3. REPRESENTATIONS............................................................... 3
Section 3.1. Representations of the Company.................................. 3
Section 3.2. Representations of the Purchasers............................... 3
SECTION 4. CLOSING CONDITIONS............................................................ 4
Section 4.1. Closing Certificate............................................. 4
Section 4.2. Company's Existence and Authority............................... 4
Section 4.3. Consents........................................................ 4
Section 4.4. Opinion......................................................... 5
Section 4.5. Waiver.......................................................... 5
Section 4.6. Consummation of the Hamlet Acquisition.......................... 5
SECTION 5. COMPANY COVENANTS............................................................. 5
Section 5.1. Corporate Existence, Etc........................................ 5
Section 5.2. Insurance....................................................... 5
Section 5.3. Taxes........................................................... 6
Section 5.4. Maintenance, Etc................................................ 6
Section 5.5. Limitations on Indebtedness..................................... 6
Section 5.6. Limitation on Liens............................................. 7
Section 5.7. Restricted Payments............................................. 7
Section 5.8. Mergers, Consolidations and Sales of Assets..................... 8
Section 5.9. Transactions with Affiliates.................................... 9
Section 5.10. Financial Statements, etc...................................... 10
Section 5.11. Issuance of THG Securities..................................... 11
SECTION 6. EVENTS OF DEFAULT AND REMEDIES THEREFOR....................................... 11
Section 6.1. Events of Default............................................... 11
Section 6.2. Notice to Holders............................................... 12
Section 6.3. Acceleration of Maturities...................................... 13
Section 6.4. Rescission of Acceleration...................................... 13
SECTION HEADING PAGE
SECTION 7. AMENDMENTS, WAIVERS AND CONSENTS.............................................. 13
Section 7.1. Consent Required................................................ 13
Section 7.2. Solicitation of Noteholders..................................... 14
Section 7.3. Effect of Amendment or Waiver................................... 14
SECTION 8. PLEDGE........................................................................ 14
Section 8.1. Pledge.......................................................... 14
Section 8.2. Representations and Warranties Regarding
Pledged Securities.............................................. 14
Section 8.3. Covenants Regarding Pledged Securities.......................... 15
Section 8.4. Voting Rights; Dividends; etc................................... 16
Section 8.5. Remedies Upon Default........................................... 16
Section 8.6. Application of Proceeds of Sale................................. 18
Section 8.7. Termination..................................................... 18
Section 8.8. Appointment..................................................... 18
Section 8.9. Duties of Agent................................................. 18
Section 8.10. Power of Attorney............................................... 18
SECTION 9. INTERPRETATION OF AGREEMENT; DEFINITIONS...................................... 19
Section 9.1. Definitions..................................................... 19
Section 9.2 Accounting Principles........................................... 27
MISCELLANEOUS........................................................................... 28
Section 10.1 Note Register.................................................. 28
Section 10.2. Exchange of Notes.............................................. 28
Section 10.3. Loss, Theft, Etc. of Notes..................................... 29
Section 10.4. Powers and Rights Not Waived; Remedies Cumulative.............. 29
Section 10.5. Notices........................................................ 29
Section 10.6. Successors and Assigns......................................... 29
Section 10.7. Integration and Severability................................... 30
Section 10.8. Governing Law.................................................. 30
Section 10.9. Captions....................................................... 30
Section 10.10. Brokerage Fees................................................ 30
Section 10.11. Termination................................................... 30
ATTACHMENTS TO NOTE AGREEMENT:
Schedule I Name and Address of Purchasers
Exhibit A Form of 14.0% Senior Secured Discount Note Due January 24, 2002
Exhibit B Certificate of the Company
Exhibit C Opinion of Counsel for the Company
Exhibit D First Amendment
FRI-MRD CORPORATION
NOTE AGREEMENT
RE: $24,000,000 14.0% SENIOR SECURED DISCOUNT NOTES
DUE JANUARY 24, 2002
Dated as of June 9, 1998
To the Purchasers named in Schedule I attached hereto that are signatories to
this Agreement
Ladies and Gentlemen:
The undersigned, FRI-MRD Corporation, a Delaware corporation (the
"Company"), agrees with each Purchaser as follows:
SECTION 1. DESCRIPTION OF NOTES AND COMMITMENT.
Section 1.1. Description of Notes. The Company will authorize the issue
and sale of $24,000,000 aggregate principal amount of its 14.0% Senior Secured
Discount Notes due January 24, 2002 (the "Notes") to be dated the date of issue.
Each Note will be issued at substantial discount from its principal amount for a
price equal to its Purchase Price on the date of purchase. Cash interest will
not accrue on the Notes prior to July 31, 1999. Thereafter, interest on the
Notes will accrue at the lower of (i) 14.0% per annum and (ii) the highest rate
permitted by law (the "Interest Rate") and will be payable semi-annually on
January 31 and July 31 of each year, commencing on January 31, 2000, and at
maturity. The Notes will bear interest on overdue principal (including any
overdue required or optional prepayment of principal) and premium, if any, and
(to the extent legally enforceable) on any overdue installment of interest at
the Interest Rate from the date such payment is due, whether by acceleration or
otherwise, until paid. The Notes will mature on January 24, 2002, and will be
substantially in the form attached hereto as Exhibit A. Interest on the Notes
shall be computed on the basis of a 360-day year of twelve 30-day months. The
term "Notes" as used herein shall include each Note delivered pursuant to this
Agreement. The terms that are capitalized herein shall have the meanings set
forth in Section 9.1 hereof unless the context shall otherwise require. The
Notes will be senior secured obligations of the Company ranking senior in right
of payment to all existing and future subordinated Indebtedness of the Company.
The proceeds from the sale of the Notes will be used exclusively to purchase,
and thereafter will be secured by, all of the outstanding capital stock of The
Hamlet Group, Inc. ("THG").
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Section 1.2. Commitment, Closing Date. Subject to the terms and conditions
hereof and on the basis of the representations and warranties hereinafter set
forth, the Company agrees to issue and sell to each Purchaser, and each
Purchaser agrees to purchase from the Company, the aggregate principal amount of
Notes set forth opposite such Purchaser's name on Schedule I attached hereto by
delivery of the Purchase Price for such Notes in cash. Delivery of the Notes
will be made at the principal offices of Skadden, Arps, Slate, Xxxxxxx & Xxxx
LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000 against payment therefor in
Federal or other funds current and immediately available in an amount equal to
the Purchase Price at 10 A.M., Eastern time, on such date as the Company shall
specify by not less than five Business Days' prior written notice to the
applicable Purchaser (the "Closing Date"). The Notes delivered to each
Purchaser on the Closing Date will be delivered in the form of a single
registered Note registered in the name of such Purchaser or in the name of such
Purchaser's nominee or in such other denominations (not less than $100,000 in
principal amount) as such Purchaser may specify no later than two Business Days
prior to the Closing Date and in substantially the form attached hereto as
Exhibit A; provided, however, that the Company shall not be required to issue
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any Notes in a denomination of less than $1,000,000 if immediately after such
issuance there would be issued and outstanding more than twenty Notes of less
than $1,000,000.
SECTION 2. PREPAYMENT OF NOTES.
No prepayment of the Notes may be made except to the extent and in the
manner expressly provided in this Agreement.
Section 2.1. Optional Prepayments. The Company may at any time prepay the
outstanding Notes, either in whole or in part, by payment of the aggregate
Accreted Value (or portion thereof) and (in addition) after July 31, 1999
accrued and unpaid interest thereon to the date of such prepayment, together
with a premium equal to the Call Premium. Any partial prepayment shall be for
an amount not less than $1,000,000 of the aggregate principal amount of the
Notes then outstanding.
Section 2.2. Notice of Prepayments. The Company will give notice of any
prepayment of the Notes pursuant to Section 2.1 to the holder thereof not less
than 30 days nor more than 45 days before the date fixed for such prepayment
specifying (a) such date, (b) the aggregate Accreted Value (or portion thereof)
of the Notes to be prepaid, (c) accrued and unpaid interest, if any, applicable
to the prepayment and (d) the Call Premium, if any. Notice of prepayment having
been so given, the aggregate Accreted Value (or portion thereof) specified in
such notice, together with the Call Premium and accrued and unpaid interest, if
any, shall become due and payable on the prepayment date.
Section 2.3. Allocation of Prepayments. All partial prepayments made
pursuant to Section 2.1 hereof shall be applied on all outstanding Notes ratably
in accordance with the unpaid Accreted Value thereof; provided, that the Company
may make such adjustments so
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that each Note remaining outstanding after any such prepayment shall be at least
$1,000,000 aggregate principal amount at maturity.
SECTION 3. REPRESENTATIONS.
Section 3.1. Representations of the Company. The Company represents and
warrants that all representations set forth in the form of certificate attached
hereto as Exhibit B are true and correct as of the date hereof and are
incorporated herein by reference with the same force and effect as though herein
set forth in full.
Section 3.2. Representations of the Purchasers. Each Purchaser represents,
warrants and agrees that:
(a) Such Purchaser is acquiring its Notes for the purpose of investment
and not with a view to the distribution thereof, and that such
Purchaser has no present intention of selling, negotiating or
otherwise disposing of its Notes; provided that the disposition of its
property shall at all times be and remain within its control.
(b) No part of the funds to be used by such Purchaser to purchase the
Notes constitutes assets allocated to any separate account maintained
by it. As used in this Section 3.2(b), the term "separate account"
shall have the meaning assigned to it in ERISA.
(c) The Notes are issued at a substantial discount from their principal
amount. Consequently, such Purchaser is aware that it may be required
to include amounts in gross income for federal income tax purposes in
advance of receipt of the cash payments to which the income is
attributable.
(d) Such Purchaser is not a "creditor" as defined in Regulation T of the
Board of Governors of the Federal Reserve System.
(e) Such Purchaser is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization with
all requisite power and authority to execute, deliver and perform its
obligations under this Agreement and to consummate the transactions
contemplated hereby.
(f) No approval, consent or withholding of objection on the part of any
regulatory body, state, federal or local, or any other third party is
necessary in connection with the execution by such Purchaser of the
Agreement or its acceptance of its Notes or compliance by such
Purchaser with any of the provisions of the Agreement or the Notes,
unless such consent or approval has already been obtained.
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(g) The execution, delivery and performance by such Purchaser of this
Agreement and all other instruments and documents to be executed and
delivered by such Purchaser in connection herewith are not (and will
not be or result) in material conflict with or in material
contravention or material violation of any law (including common law),
rule or regulation by which such Purchaser is bound or to which it is
subject or any material agreement to which it is a party.
(h) The Notes have not been registered under the Securities Act of 1933,
as amended (the "Securities Act"), or any state securities laws, and
may not be sold, transferred or otherwise disposed of by such
Purchaser without such registration or an exemption therefrom. Such
Purchaser is either an accredited investor within the meaning of Rule
501 of the Securities Act or a qualified institutional buyer within
the meaning of Rule 144A of the Securities Act.
(i) Such Purchaser understands that the Company may have material, non-
public information regarding FRI or the Company and their respective
conditions (financial or otherwise), results of operations,
businesses, properties, plans and prospects (collectively,
"Information"). Such Purchaser further acknowledges that it has been
offered and does not wish to receive any of this Information and that
such information might be material to such Purchaser's decision to
purchase the Notes. Accordingly, such Purchaser acknowledges and
agrees that the Company shall have no obligation to disclose to such
Purchaser any of such Information.
SECTION 4. CLOSING CONDITIONS.
Each Purchaser's obligation to purchase the Notes on the Closing Date shall
be subject to the performance by the Company of its agreements hereunder that
are to be performed at or prior to the time of delivery of the Notes, and to the
following further conditions precedent:
Section 4.1. Closing Certificate. Such Purchaser shall have received (i) a
certificate dated the date hereof, signed by an Officer of the Company
substantially in the form attached hereto as Exhibit B and (ii) a certificate
dated the Closing Date, signed by an Officer of the Company certifying as to the
satisfaction of the closing conditions set forth in this Section 4. The Company
shall use commercially reasonable efforts to effect the conditions set forth in
Sections 4.3 and 4.6 hereof.
Section 4.2. Company's Existence and Authority. Such Purchaser shall have
received, in form and substance reasonably satisfactory to it, such documents
and evidence with respect to the Company as such Purchaser may reasonably
request in order to establish the existence and good standing of the Company and
the authorization of the transactions contemplated by this Agreement.
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Section 4.3. Consents. Any consents or approvals required to be obtained
by the Company, FRI or any of their Subsidiaries that are necessary to permit
the consummation of the transactions contemplated hereby on such Closing Date
shall have been obtained.
Section 4.4. Opinion. Each Purchaser shall have received an opinion dated
the Closing Date from Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, counsel for the
Company, in form and substance reasonably satisfactory to counsel to the
Purchasers (reasonability including, at a minimum, (i) an opinion substantially
in the form of the opinion received from counsel to the Company in connection
with the issuance of the Existing Senior Discount Notes, and (ii) a customary
opinion as to the validity, perfection and priority of the Purchasers' security
interest in the Pledged Securities).
Section 4.5. Waiver. Holders of at least 50% of the aggregate Accreted
Value of the Existing Discount Notes shall have entered into the First Amendment
to the Existing Discount Note Agreement, substantially in the form of Exhibit D.
Section 4.6. Consummation of the Hamlet Acquisition. The Company shall
have acquired all of the outstanding capital stock of THG pursuant to the Hamlet
Acquisition Agreement. From the date hereof until the Closing Date, there shall
have been no material changes to the Hamlet Acquisition Agreement and KKR shall
not have suffered a Material Adverse Change (as defined in the Merger
Agreement). The Pledged Securities shall have been delivered to the Agent and,
upon such delivery in the State of New York, the security interest of the Agent
in the Pledged Securities will be a perfected first priority security interest.
The Company's obligation to sell the Notes to a Purchaser on the Closing
Date shall be subject to the performance by such Purchaser of its agreements
hereunder that are to be performed at or prior to the time of delivery of the
Notes and to the conditions precedent contained in Section 4.3, 4.5 and 4.6.
SECTION 5. COMPANY COVENANTS.
From and after the date of this Agreement and continuing so long as any
amount remains unpaid on any Note:
Section 5.1. Corporate Existence, Etc. The Company will preserve and keep
in force and effect its corporate existence, and will cause each Subsidiary to
preserve and keep in force and effect its corporate, partnership or other
existence in accordance with the respective organizational documents of each
such Subsidiary, and the rights and franchises of the Company and its
Subsidiaries, provided that (a) the Company shall not be required to preserve
any such right or franchise, or the existence, right or franchise of any of its
Subsidiaries, if the Board of Directors of the Company shall determine that the
preservation thereof is no longer desirable in the conduct of the businesses of
the Company and its Subsidiaries taken as a whole
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and (b) the provisions of this Section 5.1 shall not limit the ability of the
Company or any Subsidiary of the Company to engage in any transaction permitted
by Section 5.8 hereof.
Section 5.2. Insurance. The Company will maintain, and will cause each
Subsidiary to maintain, insurance coverage by financially sound and reputable
insurers in such forms and amounts and against such risks as are customary for
corporations of established reputation engaged in the same or a similar business
and owning and operating similar properties.
Section 5.3. Taxes. The Company will pay or discharge or cause to be paid
or discharged, before the same shall become delinquent, all material taxes,
assessments and governmental charges levied or imposed upon the Company or any
of its Subsidiaries or upon the income, profits or property of the Company or of
any such Subsidiary; provided, however, that the Company shall not be required
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to pay or discharge or cause to be paid or discharged any such tax, assessment
or charge (i) whose amount, applicability or validity is being contested in good
faith by appropriate proceedings and, if required by GAAP, for which adequate
provision has been made, or (ii) where the failure to effect such payment or
discharge is not adverse in any material respect to any Purchaser.
Section 5.4. Maintenance, Etc. The Company will cause all material
properties owned by or leased to it or any of its Subsidiaries and material to
the business of the Company and its Subsidiaries, taken as a whole, to be
maintained and kept in normal condition and working order (ordinary wear and
tear and losses due to casualty excepted) and will from time to time cause to be
made all necessary repairs, renewals, and replacements thereof, all as in the
judgment of the Company may be necessary, so that the business carried on in
connection therewith may be properly conducted; provided, however, that (a)
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nothing in this Section shall prevent the Company from discontinuing the use,
operation or maintenance of any of such properties, or disposing of any of them,
if such discontinuance or disposal is, in the judgment of its Board of Directors
or of the Board of Directors, board of trustees or managing partners of the
Subsidiary concerned, or of an Officer (or other agent employed by the Company
or any of its Subsidiaries) of the Company or such Subsidiary having managerial
responsibility for any such property, desirable in the conduct of the businesses
of the Company or any of its Subsidiaries (provided that any such disposal is
for a fair value after taking into account all circumstances involved in the
decision to dispose of such property); and (b) the provisions of this Section
5.4 shall not limit the ability of the Company or any Subsidiary to engage in
any transaction permitted by Section 5.8 hereof.
Section 5.5. Limitations on Indebtedness. The Company will not, and will
not permit any Subsidiary to, create, assume or incur any Indebtedness except:
(1) Indebtedness evidenced by the Notes and the Existing
Discount Notes;
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(2) Indebtedness under the Credit Agreement not to exceed the
Maximum Amount outstanding at any one time;
(3) Indebtedness of the Company and its Subsidiaries and of KKR
and its subsidiaries outstanding as of the date of this Agreement;
(4) Indebtedness relating to insurance premium financing or in
respect of workers' compensation claims, in each case incurred in the
ordinary course of business;
(5) Indebtedness relating to the Company's and its Subsidiaries'
controlled disbursement accounts or in respect of overdrafts of zero
balance bank accounts, in each case incurred in the ordinary course of
business;
(6) Indebtedness in respect of Capitalized Lease Obligations or
purchase money financings (including the purchase price of inventory);
provided that such Indebtedness is secured only by the applicable asset;
(7) Indebtedness between a Subsidiary and the Company or between
Subsidiaries;
(8) Indebtedness represented by surety and performance bonds and
similar obligations, in each case incurred in the ordinary course of
business;
(9) Hedging Obligations of the Company or a Subsidiary incurred
in the ordinary course of business;
(10) Notwithstanding any amounts incurred under clauses (1)
through (9) of this Section 5.5, additional Indebtedness of the Company and
its Subsidiaries outstanding at any time that does not exceed in the
aggregate an amount equal to (i) $99,000,000 less (ii) the aggregate
principal amount of Notes and Existing Discount Notes then outstanding; and
(11) Indebtedness issued or incurred in connection with the
renewal, expansion, refinancing or refunding of Indebtedness permitted by
the preceding clauses (1) through (10) of this Section 5.5; provided that
any expansion of such Indebtedness would otherwise satisfy the conditions
of one of the other clauses (1) through (10) of this Section 5.5.
Section 5.6 Limitation on Liens. The Company will not, and will not
permit any Subsidiary to, create, incur, assume or suffer to exist any Liens
other than Permitted Liens unless the Notes are secured equally and ratably with
any other obligations thereby secured.
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Section 5.7. Restricted Payments. The Company will not, and will not
permit any Subsidiary, to make any distribution or declare or pay any dividends
(in cash or other property, other than capital Stock) on, or purchase, redeem or
otherwise retire any of the Company's or any of its Subsidiaries' capital Stock,
whether now or hereafter outstanding, except:
(a) Any Subsidiary may declare and pay dividends or other distributions
to, or purchase, redeem or otherwise retire any capital Stock from,
the Company or any Subsidiary.
(b) So long as no Event of Default exists and is continuing at the time of
such payment or would result therefrom, the Company may declare and
pay dividends or other distributions to FRI in amounts from time to
time required to make regular interest payments with respect to the
FRI Notes (excluding therefrom any interest in respect of any increase
in the aggregate principal amount thereof occurring after the Closing
Date), if and so long as FRI uses the proceeds of such dividends or
other distributions to satisfy such interest obligation.
(c) The Company may declare and pay dividends or other distributions to
FRI during each fiscal year equal to the sum of (i) an amount not in
excess of the federal, state, local and foreign taxes and assessments
payable by FRI and its subsidiaries (determined on a consolidated
basis) for such year, plus (ii) the aggregate amount of all general
corporate, operating and administrative expenses incurred by FRI
(including, without limitation, any such expenses incurred on behalf
of its Subsidiaries) in the ordinary course of business.
(d) The Company and each Subsidiary may purchase, acquire, cancel or
otherwise retire for value shares of capital Stock of FRI or any of
its Subsidiaries, options on any such shares or related stock
appreciation rights or similar securities held by directors, officers,
employees or former directors, officers or employees (or their estates
or beneficiaries under their estates or permitted transferees) that
were issued pursuant to any Stock Based Plan, in each case upon death,
disability, retirement, termination or pursuant to the terms of such
Stock Based Plan; provided, however, that the aggregate consideration
paid for such purchases, acquisitions, cancellations or retirements
shall not exceed $2.5 million in any fiscal year.
Notwithstanding the foregoing, this Agreement does not prevent immaterial
cash dividends in lieu of payment of fractional shares.
Section 5.8. Mergers, Consolidations and Sales of Assets.
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(a) The Company will not, and will not permit any Subsidiary to, (1)
consolidate with or be a party to a merger with any other corporation,
(2) sell, lease or otherwise dispose of all or substantially all of
the assets of the Company and its Subsidiaries (on a consolidated
basis), or (3) issue any securities or any rights or options to
purchase securities for less than fair value as determined in good
faith by the Board of Directors, provided, however, that:
(i) any Subsidiary (other than THG) may merge or consolidate
with or into the Company or any Subsidiary;
(ii) the Company may consolidate or merge with any other
corporation if (A) the Company shall be the surviving or continuing
corporation or else the surviving or continuing corporation shall (x)
have a consolidated EBITDA for the twelve-month period ending on the
last day of the calendar quarter immediately preceding the date of
such consolidation or merger, determined on a pro forma basis, equal
to or exceeding that of the Company for such period and (y) assume all
of the obligations of the Company under the Notes and this Agreement
and (B) at the time of such consolidation or merger and after giving
effect thereto no Default or Event of Default shall have occurred and
be continuing;
(iii) any Subsidiary (other than THG) may sell, lease or
otherwise dispose of its assets, or issue securities, to the Company
or any Subsidiary; and
(iv) any Subsidiary (other than THG) may merge or consolidate
with or into KKR.
Section 5.9. Transactions with Affiliates. The Company will not, and will
not permit any Subsidiary to, enter into any transaction (or series of related
transactions) (a "Transaction") with any holder (or any Affiliate of such
holder) of 5% or more of any class of capital Stock of the Company or with any
Affiliate of the Company, involving payments by the Company or any Subsidiary
(including, without limitation, any sale, purchase, lease or loan or any other
direct or indirect payment, transfer or other disposition) in excess of
$2,000,000, other than the following Transactions:
(i) Transactions between or among the Company and its
Subsidiaries or between or among such Subsidiaries,
(ii) Transactions the terms of which are at least as favorable
as the terms that could be obtained by the Company or such Subsidiary,
as the case may be, in a comparable transaction made on an arm's-
length basis between unaffiliated parties (in each case as determined
in good faith by a majority of the directors of the Company
unaffiliated with such holder or Affiliate, or if
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there are no such directors, as determined in good faith by its Board
of Directors),
(iii) Transactions in which the Company or any Subsidiary
delivers to the holders of the Notes a written opinion of an
independent nationally recognized investment banking firm stating that
such Transaction is fair to the Company or such Subsidiary from a
financial point of view,
(iv) the performance by the Company of its obligations
hereunder and under the Notes, the Existing Discount Note Agreement
and the Existing Discount Notes,
(v) the payment of reasonable and customary compensation or
fees (including, without limitation, options or related stock
appreciation rights or similar securities issued pursuant to any Stock
Based Plan and payments pursuant to the Value Creation Units Plan,
including payments made in connection with the termination or
amendment of such plan) to officers, directors, and employees of FRI,
the Company or any of its Subsidiaries, in each case as determined by
the Company's Board of Directors in good faith,
(vi) loans or advances to officers, directors and employees of
FRI, the Company or any of its Subsidiaries made in the ordinary
course of business not to exceed $2 million at any time outstanding,
(vii) purchases (for equal to or less than fair value) or sales
(for equal to or more than fair value) of goods and services made in
the ordinary course of business,
(viii) Transactions permitted by, and complying with, the
provisions of Section 5.7 hereof,
(ix) Transactions permitted by, and complying with, the
provisions of Section 5.8 hereof,
(x) management and tax sharing agreements in effect on the
date hereof or any replacements thereof which do not materially
increase the obligations of the Company or its Subsidiaries,
(xi) consummation of the transactions contemplated by the
Merger Agreement and the Hamlet Acquisition Agreement, or
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(xii) Investments by the Company or any Subsidiary in any
Unrestricted Subsidiary not to exceed $10,000,000 in the aggregate at
any one time outstanding.
Section 5.10. Financial Statements, etc. (a) As long as FRI is a reporting
company under the Exchange Act, the Company shall deliver to the holders of the
Notes, FRI's form 10-Q Quarterly Reports, Form 10-K Annual Reports, and Form 8-K
Current Reports, and any other filings made by FRI with the Securities and
Exchange Commission, if any, as soon as reasonably practicable after the same
are filed.
(b) In the event FRI is no longer a reporting company under the
Exchange Act, the Company shall deliver to the holders of the Notes as soon as
available, but in any event within 60 days after the end of each of the first
three quarters during each of FRI's fiscal years, an unaudited balance sheet,
income statement, and statement of cash flow covering FRI's operations during
such period; and (b) as soon as available, but in any event within 105 days
after the end of each of FRI's fiscal years, financial statements of FRI for
each such fiscal year, audited by independent certified public accountants.
Such audited financial statements shall include a balance sheet, profit and loss
statement, and statement of cash flow and, promptly after receipt and if
prepared, such accountants' letter to management.
(c) Each Purchaser acknowledges that it is familiar with its
responsibilities under the federal securities laws relating to restrictions on
trading in securities of an issuer while in possession of material, non-public
information, and restrictions on sharing such information with other persons who
may engage in such trading; and agrees that such Purchaser will not violate
those restrictions, and will use reasonable efforts to prevent any of its
directors, officers, employees, agents and advisors (including, without
limitation, attorneys, accountants, bankers and financial advisors) who receive
any such information from such Purchaser concerning the Company (whether
prepared by the Company, its advisors or otherwise and irrespective of the form
of communication) from violating those restrictions.
Section 5.11. Issuance of THG Securities. THG will not issue any equity
security or any security, convertible or exchangeable into, or exercisable for,
or warrants, options or other rights to purchase, an equity security of THG.
SECTION 6. EVENTS OF DEFAULT AND REMEDIES THEREFOR.
Section 6.1. Events of Default. Any one or more of the following shall
constitute an "Event of Default" as the term is used herein:
(a) Default shall occur in the payment of interest on any Note when the
same shall have become due and such default shall continue for more
than 10 Business Days; or
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(b) Default shall occur in the making of any payment of the principal of
any Note or the Call Premium, if any, thereon at the expressed or any
maturity date or at any date fixed for prepayment; or
(c) Default shall occur in the observance or performance of any other
provision of this Agreement which is not remedied within 30 days after
the date on which written notice thereof is given to the Company by
the holders of a majority in aggregate Accreted Value of the
outstanding Notes; or
(d) Any judgment or order for the payment of money shall be rendered
against the Company or a Material Subsidiary of the Company by a court
of competent jurisdiction and shall not be discharged or stayed within
90 days, and the amount thereof that is not covered by insurance,
letters of credit or a bond shall be in excess of $10,000,000 and
either (i) an enforcement proceeding shall have been commenced by any
creditor upon such judgment or order or (ii) there shall be any period
of 90 consecutive days, after written notice has been given to the
Company by the Holders of at least 25% in aggregate Accreted Value of
the outstanding Notes, during which a stay of enforcement of such
judgment or order, by reason of a pending appeal or otherwise, shall
not be in effect; or
(e) An event of default occurs which extends beyond any period of grace
applicable thereto under any mortgage, indenture or other instrument
under which there may be issued any Indebtedness of the Company or any
Material Subsidiary of the Company for borrowed money having an
outstanding principal amount of $10,000,000 or more in the aggregate,
whether such Indebtedness now exists or shall hereafter be created, if
either (i) such default results from the failure to pay principal upon
the final maturity of such Indebtedness or (ii) as result of such
event of default such Indebtedness has been declared to be due and
payable prior to its stated maturity, provided, however, that if such
-------- -------
default shall be remedied or cured or waived by the holders of such
Indebtedness, then the Event of Default hereunder by reason thereof
shall be deemed to have been thereupon remedied, cured or waived
without further action on the part of the holders of the Notes; or
(f) The Company or any Material Subsidiary becomes insolvent, is generally
not paying its debts as they become due or makes an assignment for the
benefit of creditors, or the Company or any Material Subsidiary
applies for or consents to the appointment of a custodian, trustee,
liquidator, or receiver for the Company or such Subsidiary or for the
major part of the property of either; or
(g) A custodian, trustee, liquidator, or receiver is appointed for the
Company or any Material Subsidiary or for the major part of the
property of either and is not discharged within 45 days after such
appointment; or
12
(h) Bankruptcy, reorganization, arrangement or insolvency proceedings, or
other proceedings for relief under any bankruptcy or similar law or
laws for the relief of debtors, are instituted by or against the
Company or any Material Subsidiary and, if instituted against the
Company or any Material Subsidiary, are consented to or are not
dismissed within 45 days after such institution; or
(i) A Change of Control occurs; or
(j) FRI retires or prepays all or any portion of the FRI Notes with a
source other than (i) assets of FRI, (ii) Notes issued in exchange for
FRI Notes or (iii) proceeds of Indebtedness issued by FRI or the
Company that is subordinate in right of payment to the Notes.
Section 6.2. Notice to Holders. When the Company has knowledge that any
Event of Default described in the foregoing Section 6.1 has occurred, the
Company agrees to give notice to the holders of the outstanding Notes within
three Business Days of the date on which the Company becomes aware of such Event
of Default.
Section 6.3. Acceleration of Maturities. When any Event of Default
described in paragraphs (a) through (j), inclusive, of said Section 6.1 has
happened and is continuing, the holder or holders of 25% or more of the Accreted
Value of outstanding Notes may, by notice to the Company, declare the entire
Accreted Value and all interest accrued and unpaid, if any, on all Notes to be,
and all Notes shall thereupon become, forthwith due and payable, without any
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived. When any Event of Default described in paragraph (h)
of Section 6.1 has occurred, then the Accreted Value of all outstanding Notes
(together with accrued and unpaid interest, if any) shall immediately become due
and payable without presentment, demand or notice of any kind. Upon the Notes
becoming due and payable as a result of any Event of Default as aforesaid, the
Company will forthwith pay to the holders of the Notes the entire outstanding
Accreted Value and interest accrued and unpaid, if any, on the Notes. No course
of dealing on the part of any Noteholder nor any delay or failure on the part of
any Noteholder to exercise any right shall operate as a waiver of such right or
otherwise prejudice such holder's rights, powers and remedies.
Section 6.4. Rescission of Acceleration. The provisions of Section 6.3 are
subject to the condition that if the Accreted Value of and accrued and unpaid
interest, if any, on all or any outstanding Notes have been declared immediately
due and payable by reason of the occurrence of any Event of Default described in
paragraphs (a) through (j), inclusive, of Section 6.1, the holders of a majority
in aggregate Accreted Value of the outstanding Notes may, by written instrument
filed with the Company, rescind and annul such declaration and the consequences
thereof.
SECTION 7. AMENDMENTS, WAIVERS AND CONSENTS.
13
Section 7.1. Consent Required. Any term, covenant, agreement or condition
of this Agreement may, with the consent of the Company, be amended or compliance
therewith may be waived (either generally or in a particular instance and either
retroactively or prospectively), if the Company shall have obtained the consent
in writing of the holders of at least 50% in aggregate Accreted Value of
outstanding Notes; provided that without the written consent of the holders of
all of the Notes then outstanding, no such waiver, modification, alteration or
amendment shall be effective (a) that will change the time of payment of the
principal of or the interest on any Note or reduce the Accreted Value thereof or
change the rate of interest thereon, or (b) that will change any of the
provisions with respect to optional prepayment or (c) that will change the
percentage of holders of the Notes required to consent to any such amendment,
modification or waiver of any of the provisions of this Section 7 or Section 6.
Section 7.2. Solicitation of Noteholders. Executed or true and correct
copies of any waiver effected pursuant to the provisions of Section 7.1 shall be
delivered by the Company to each holder of outstanding Notes forthwith following
the date on which the same shall have been executed and delivered by the holder
or holders of the requisite percentage of outstanding Notes.
Section 7.3. Effect of Amendment or Waiver. Any such amendment or waiver
shall apply equally to all of the holders of the Notes and shall be binding upon
them, upon each future holder of any Note and upon the Company, whether or not
such Note shall have been marked to indicate such amendment or waiver. No such
amendment or waiver shall extend to or affect any obligation not expressly
amended or waived or impair any right consequent thereon.
SECTION 8. PLEDGE.
Section 8.1. Pledge. As collateral security for payment in full of the
Notes, the Company hereby pledges, hypothecates, assigns, transfers, sets over
and delivers unto the Agent for the benefit of the Purchasers a first priority
security interest in all the Pledged Collateral. On the Closing Date, unless
previously delivered, the Company shall deliver the Pledged Securities to the
Agent for the benefit of the Purchasers. The certificates representing the
Pledged Securities shall be accompanied by executed undated stock powers, duly
endorsed to the Agent by the Company.
If any additional Pledged Collateral (or, during an Event of Default, any
dividends or other cash distributions paid in cash or cash equivalents on the
Pledged Securities) shall come into the possession or control of the Company or
any Subsidiary, the Company or such Subsidiary shall hold or control in trust
and forthwith transfer and deliver the same to the Agent subject to the
provisions hereof. If at any time the Agent notifies the Company that
additional stock powers endorsed in blank with respect to the Pledged Securities
are required, the Company
14
shall promptly execute in blank and deliver such stock powers as the Agent may
reasonably request.
Section 8.2. Representations and Warranties Regarding Pledged Securities.
The Company hereby represents and warrants to the Agent and the Purchasers that:
(a) Upon consummation of the transactions contemplated by the Hamlet
Acquisition Agreement, the Company will be the sole legal and beneficial owner
of, and will have good and valid title to, the Pledged Securities, free and
clear of all Liens other than the security interest created by this Agreement.
The Company has the unqualified right and authority to execute this Agreement
and, upon consummation of transactions contemplated by the Hamlet Acquisition
Agreement, to pledge the Pledged Securities to the Agent as provided for herein.
(b) There are no outstanding options, warrants or other similar agreements
providing for the sale or issuance of securities of THG to which the Company or
THG is a party.
(c) Upon consummation of the transactions contemplated by the Hamlet
Acquisition Agreement, the Pledged Securities will be validly issued and fully
paid and non-assessable;
(d) No consent, approval or authorization of or designation or filing with
any authority on the part of the Company is required in connection with the
pledge and security interest granted under this Agreement, other than those that
will on or prior to the Closing Date be obtained or effected.
Section 8.3. Covenants Regarding Pledged Securities. The Company agrees
that:
(a) The Company has delivered, or will on or prior to the Closing Date
deliver, to the Agent all instruments and stock certificates, if any,
representing the Pledged Securities, duly endorsed in blank or accompanied by an
assignment or assignments sufficient to transfer title thereto.
(b) The Company will not, without the prior written consent of the Agent
(which consent shall be in the Agent's sole discretion), sell, transfer or
convey any interest in, or suffer or permit any Lien to be created upon or with
respect to, any of the Pledged Securities (other than as created under this
Agreement) during the term of the pledge established hereby; provided that,
notwithstanding anything herein to the contrary, the Company may sell in an
arms-length transaction for fair value all or any portion of the Pledged
Collateral for cash so long as 100% of the net proceeds thereof are utilized to
repay the Notes pursuant to Section 2.1.
(c) The Company will, at its own expense, at any time and from time to time
at the Agent's reasonable request, do, make, procure, execute and deliver all
acts, things, writings, assurances and other documents as may be reasonably
required by the Agent to preserve,
15
establish, demonstrate or enforce the Agent's rights, interests and remedies
created by or provided in this Agreement.
Section 8.4. Voting Rights; Dividends; etc.
So long as no Event of Default has occurred and is continuing:
(a) The Company shall be entitled to receive and retain any dividends and
other cash distributions paid in cash or cash equivalents on the Pledged
Securities.
(b) The Company shall be entitled to vote or consent or grant waivers or
ratifications with respect to the Pledged Securities in any manner not violating
any provision of this Agreement.
Section 8.5. Remedies Upon Default.
At any time when an Event of Default has occurred and is continuing:
(a) The Agent may collect by legal proceedings or otherwise all dividends,
capital distributions and other sums now or hereafter payable on
account of said Pledged Securities, and hold the same as part of the
Pledged Securities, or apply the same to the principal amount of the
Notes then owing or interest thereon as set forth in Section 8.6.
(b) The Agent may discharge any taxes, liens, security interest or other
encumbrances levied or placed on the Pledged Securities or pay for the
maintenance and preservation of the Pledged Securities; the amount of
such payments, plus any and all reasonable fees, costs and expenses of
the Agent (including reasonable attorneys' fees and disbursements) in
connection therewith shall be applied as set forth in Section 8.6.
(c) In addition to all the rights and remedies of a secured party under
applicable law, the Agent shall have the right, and without demand of
performance or other demand, advertisement or notice of any kind,
except as specified below, to or upon the Company or any other person
(all and each of which demands, advertisements and/or notices are
hereby expressly waived to the extent permitted by law), to proceed
forthwith to collect, receive, appropriate and realize upon the
Pledged Securities, or any part thereof and to proceed forthwith to
sell, assign, give an option or options to purchase, contract to sell,
or otherwise dispose of and deliver the Pledged Securities or any part
thereof in one or more parcels at public or private sale or sales at
any stock exchange, broker's board or at any of the Agent's offices or
elsewhere at such prices and on such terms (including, without
limitation, a requirement that any purchaser of all or any part of the
Pledged
16
Securities shall be required to purchase any securities constituting
the Pledged Securities solely for investment and without any intention
to make a distribution thereof) as the Agent in its sole and absolute
discretion deems appropriate without any liability for any loss due to
decrease in the market value of the Pledged Securities during the
period held. The Agent agrees that if notice of sale shall be required
by law such notification shall be deemed reasonable and properly given
if mailed to the Company, postage prepaid, at least ten (10) Business
Days (or such longer period required by any provision of applicable
laws) before any such disposition, to the address indicated in the
notice provisions below. Any disposition of the Pledged Securities or
any part thereof may be for cash or on credit or for future delivery
without assumption of any credit risk, with the right of the Agent to
purchase all or any part of the Pledged Securities so sold at any such
sale or sales, public or private, free of any equity or right of
redemption in the Company, which right or equity is, to the extent
permitted by applicable law, hereby expressly waived or released by
the Company.
(d) All of the Agent's rights and remedies, including but not limited to
the foregoing, shall be cumulative and not exclusive and shall be
enforceable alternatively, successively or concurrently as the Agent
may deem expedient.
(e) The Agent may elect to obtain (at the Company's expense) the advice of
any independent investment banking firm with respect to the method and
manner of sale or other disposition of any of the Pledged Securities,
the best price reasonably obtainable therefor, the consideration of
cash and/or credit terms, or any other details concerning such sale or
disposition. The Agent, in its sole discretion, may elect to sell on
such credit terms which it deems reasonable. The sale of any of the
Pledged Securities on credit terms shall not relieve the Company of
its liability under the Notes until the Notes have been paid in full.
(f) The Company recognizes that the Agent may be unable to effect a public
sale of all or a part of the Pledged Securities by reason of certain
prohibitions contained in any applicable securities laws, but may be
compelled to resort to one or more private sales to a restricted group
of purchasers who will be obliged to agree, among other things, to
acquire the Pledged Securities for their own account, for investment
and not with a view for the distribution or resale thereof. The
Company agrees that private sales so made may be at prices and on
other terms less favorable to the seller than if the Pledged
Securities were sold at public sale, and that the Agent has no
obligation to delay the sale of any Pledged Securities for the period
of time necessary to permit the registration of the Pledged Securities
for public sale under the Securities Act. The Company agrees that a
private sale or sales made under the foregoing circumstances shall be
deemed to have been made in a commercially reasonable manner.
17
(g) Upon any sale or other disposition, the Agent shall have the right to
deliver, assign and transfer to the purchaser thereof the Pledged
Securities so sold or disposed of. Each purchaser at any such sale or
other disposition (including the Agent) shall hold the Pledged
Securities free from any claim or right of the Company of whatever
kind, including any equity or right of redemption of the Company. The
Company specifically waives, to the extent permitted by applicable
laws, all rights of redemption, stay or appraisal which it had or may
have under any rule of law or statute now existing or hereafter
adopted.
(h) The Agent shall not be obligated to make any sale or other
disposition, unless the terms thereof shall be reasonably satisfactory
to it. The Agent may, subject to applicable laws, without notice or
publication, adjourn any private or public sale, and, upon ten (10)
business Days' prior written notice to the Company, hold such sale at
any time or place to which the same may be so adjourned. In case of
any sale of all or any part of the Pledged Securities, on credit or
future delivery, the Pledged Securities so sold may be retained by the
Agent until the selling price is paid by the purchaser thereof, but
the Agent shall incur no liability in the case of the failure of such
purchaser to take up and pay for the property so sold.
(i) The Company hereby irrevocably grants to Agent, with full power of
substitution, a proxy to vote and exercise any and all voting rights
held by it with respect to the Pledged Securities. The proxy granted
hereunder is coupled with an interest and is irrevocable.
Section 8.6. Application of Proceeds of Sale. The proceeds of sale of the
Pledged Collateral sold pursuant to Section 8.5 hereof shall be applied by the
Agent on behalf of the Purchasers as follows:
(a) to the payment of all reasonable out-of-pocket costs and expenses
incurred by the Agent in connection with such sale, including, but not limited
to, all court costs and the reasonable fees and expenses of counsel for the
Agent in connection therewith, and the payment of all other costs and expenses
paid or incurred by the Agent in connection with this Agreement, or the exercise
of any right or remedy hereunder, to the extent that such advances, costs, and
expenses shall not have been paid previously to the Agent; and
(b) to the payment in full of all interest and premium, if any, owed
with respect to the Notes and all principal of the Notes in such order as
determined by the Purchasers.
Any amounts remaining after such applications shall be remitted to the
Company.
18
Section 8.7. Termination. The pledge referenced herein shall terminate
when all of the Notes shall have been fully paid, at which time the Agent shall
assign and deliver to the Company, or to such other Person or Persons as the
Company shall designate, against receipt, such of the Pledged Collateral (if
any) as shall not have been sold or otherwise applied by the Agent pursuant to
the terms hereof, together with appropriate instruments of reassignment and
release.
Section 8.8. Appointment. Each Purchaser hereby irrevocably designates and
appoints the Agent and the Agent hereby accepts such appointment, as the Agent
of such Purchaser under Section 8 to hold the Pledged Collateral for and on
behalf of such Purchaser, and each such Purchaser irrevocably authorizes the
Agent to take such action on its behalf with respect to the Pledged Collateral
under the provisions of Section 8 and to exercise such powers and perform such
duties as are expressly delegated to the Agent by the terms of Section 8,
together with such other powers as are reasonably incidental thereto. The Agent
shall act in accordance with the instructions of the Purchasers holding in
excess of 50% of the Accreted Value of the Notes. No Purchaser shall have any
obligation to pay the fees and expenses of the Agent hereunder, which fees and
expenses shall be paid by the Company.
Section 8.9. Duties of Agent. The Agent shall be required to exercise the
reasonable care which a secured party would customarily exercise with respect to
the Pledged Collateral in its possession.
Section 8.10. Power of Attorney. The Company hereby constitutes and
irrevocably appoints the Agent, as the Company's true and lawful attorney-in-
fact to the full extent permitted by law, at any time or times when an Event of
Default has occurred and is continuing for the limited purpose of allowing the
Agent to affix to certificates and documents representing the Pledged Securities
the stock power delivered with respect thereto, to transfer or cause the
transfer of the Pledged Securities, or any part thereof on the books of THG, to
the name of the Agent or the Agent's nominee and thereafter exercise as to such
Pledged Securities all the rights, power and remedies of an owner. The power of
attorney granted pursuant to this Agreement and all authority hereby conferred
are granted and conferred solely to protect the Agent's interest in the Pledged
Securities and shall not impose any duty upon the Agent to exercise any power.
This power of attorney shall be irrevocable and coupled with an interest.
SECTION 9. INTERPRETATION OF AGREEMENT; DEFINITIONS.
Section 9.1 Definitions. Unless the context otherwise requires, the terms
hereinafter set forth when used herein shall have the following meanings and the
following definitions shall be equally applicable to both the singular and
plural forms of any of the terms herein defined:
19
"Accreted Value" shall mean, with respect to each Note, as of any date of
determination (a) prior to July 31, 1999, the sum of (i) the Purchase Price of
such Note and (ii) the portion of the excess of the principal amount of such
Note over such Purchase Price that has been accreted thereon through such date,
such amount to be so accreted on a daily basis at the rate, compounded semi-
annually, such that the Accreted Value of the Note on July 31, 1999 shall equal
its principal amount and (b) from and after July 31, 1999, the principal amount
of such Note.
"Affiliate" shall mean any Person (a) that directly or indirectly through
one or more intermediaries controls, or is controlled by, or is under common
control with, any other Person or (b) is an officer, director or employee of any
such Affiliate. The term "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of Voting Stock, by contract
or otherwise.
"Agent" shall mean such party mutually agreed to by, and reasonably
satisfactory to, the Company and the Purchasers on or prior to the Closing Date,
which party shall execute and become a party to this Agreement (with such
changes to Section 8 hereof as such party shall reasonably request and which
changes are reasonably acceptable to the Company and the Purchasers).
"Board of Directors" shall mean, with respect to any Person, the Board of
Directors of such Person or any committee of the Board of Directors authorized
to act for it hereunder.
"Business Day" shall mean any day other than a Saturday, Sunday, statutory
holiday or other day on which banks in Los Angeles, California are required by
law to close or are customarily closed.
"Call Premium" shall mean:
(a) in connection with any prepayment prior to and on January 23,
2001, an amount equal to 5.0% of the amount of Accreted Value being
prepaid; and
(b) in connection with any prepayment after January 23, 2001, an
amount equal to 2.5% of the amount of Accreted Value being prepaid.
"Capitalized Lease Obligation" means, with respect to any Person, an
obligation of such Person to pay rent or other amounts under a lease that is
required to be capitalized for financial reporting purposes in accordance with
GAAP and the amount of such obligation shall be the capitalized amount thereof
determined in accordance with GAAP.
20
"Change of Control" shall mean an event whereby a "person" or "group"
(within the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act) (other
than any Existing Stockholder) becomes the "beneficial owner" (as defined in
Rule 13d-3 under the Exchange Act) of more than 50% of the total voting power of
the then outstanding Voting Stock of FRI or the Company (calculated on a fully
diluted basis); provided, that a Change of Control shall be deemed not to have
--------
occurred if a "group" (within the meaning of Sections 13(d) and 14(d)(2) of the
Exchange Act) becomes the ultimate "beneficial owner" of more than 50% of the
total voting power of the then outstanding Voting Stock of FRI (calculated on a
fully diluted basis), so long as a majority of the voting power of the Voting
Stock of FRI ultimately "beneficially owned" by such "group" is ultimately
"beneficially owned" by any one or more of the Existing Stockholders.
"Closing Date" shall have the meaning provided in Section 1.2 herein.
"Company" shall mean FRI-MRD Corporation, a Delaware corporation.
"Credit Agreement" shall mean (i) the Loan and Security Agreement, dated as
of January 10, 1997, among the Company, certain of its Subsidiaries, FRI, and
Foothill Capital Corporation, as such agreement may be restated, amended,
supplemented or otherwise modified from time to time hereafter and (ii) any
refunding, refinancing or replacement of any agreement provided for in clause
(i) or this clause (ii).
"Default" shall mean any event or condition, the occurrence of which would,
with the lapse of time or the giving of notice, or both, constitute an Event of
Default as defined in Section 6.1.
"EBITDA" shall mean, for any Person, such Person's earnings (loss) before
(i) opening costs, (ii) gain (loss) on disposition of properties, (iii)
provision for divestitures and writedown of long-lived assets, (iv) writedown of
goodwill, (v) interest, (vi) taxes, (vii) depreciation, (viii) amortization,
(ix) gain (loss) on extinguishment of debt, and (x) extraordinary items, in each
case as determined in accordance with GAAP.
"Environmental Legal Requirement" shall mean any international, Federal,
state or local statute, law, regulation, order, consent decree, judgment,
permit, license, code, covenant, deed restriction, common law, treaty,
convention, ordinance or other requirement relating to public health, safety or
the environment, including, without limitation, those relating to releases,
discharges or emissions to air, water, land or groundwater, to the withdrawal or
use of groundwater, to the use and handling of polychlorinated biphenyls or
asbestos, to the disposal, treatment, storage or management of hazardous or
solid waste, or Hazardous Substances or crude oil, or any fraction thereof, or
to exposure to toxic or hazardous materials, to the handling, transportation,
discharge or release of gaseous or liquid Hazardous Substances and any
regulation, order, notice or demand issued pursuant to such law, statute or
ordinance, in each case applicable to the property of the Company or any of its
21
Subsidiaries or the operation, construction or modification of any such
property, including without limitation the following: the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended by
the Superfund Amendments and Reauthorization Act of 1986, the Solid Waste
Disposal Act, as amended by the Resource Conservation and Recovery Act of 1976
and the Hazardous and Solid Waste Amendments of 1984, the Hazardous Material
Transportation Act, as amended, the Federal Water Pollution Control Act, as
amended by the Clean Water Act of 1976, the Safe Drinking Water Act, the Clean
Air Act, as amended, the Toxic Substances Control Act of 1976, the Occupational
Safety and Health Act of 1977, as amended, the Emergency Planning and Community
Right-to-Know Act of 1986, the National Environmental Policy Act of 1975, the
Oil Pollution Act of 1990 and any similar or implementing state law, and any
state statute and any further amendments to these laws providing for financial
responsibility for cleanup or other actions with respect to the release or
threatened release of Hazardous Substances or crude oil, or any fraction thereof
and all rules and regulations promulgated thereunder.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute of similar import, together with the
regulations thereunder, in each case as in effect from time to time. References
to sections of ERISA shall be construed to also refer to any successor sections.
"Event of Default" shall have the meaning set forth in Section 6.1 hereof.
"Excess EBITDA" means, on any date, the amount, if any, by which the
product of six (6) times the consolidated EBITDA of the Company and its
Subsidiaries, on a pro forma basis for the most recent fiscal year of the
Company ending on or prior to such date exceeds the sum of the accreted
Indebtedness outstanding on such date under the Existing Discount Notes and the
Notes and funded Indebtedness outstanding on such date under the Credit
Agreement.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
and any successor statute thereto.
"Existing Discount Note Agreement" means the FRI-MRD Corporation Note
Agreement, dated as of August 12, 1997, Re: up to $75,000,000 15.0% Senior
Discount Notes due January 24, 2002, as amended by the First Amendment to Note
Agreement, dated as of June 9, 1998, and as further amended from time to time in
accordance with the terms thereof, and includes the Joinder Agreement, dated
January 14, 1998, among FRI-MRD Corporation and each of the purchasers listed
therein.
"Existing Discount Notes" means the 15% Senior Discount Notes of the
Company due January 24, 2002 issued pursuant to the Existing Discount Note
Agreement, as such Notes may be restated, amended, supplemented or otherwise
modified from time to time hereafter and any refunding, refinancing or
replacement of any such Indebtedness.
22
"Existing Stockholder" means (i) with respect to FRI, the stockholders of
FRI on the date hereof including (without limitation) Apollo FRI Partners, L.P.
and Green Equity Investors, L.P. and the Related Persons of such stockholders
and (ii) with respect to the Company, FRI and each Person specified in clause
(i) above.
"FRI" means Family Restaurants, Inc., a Delaware corporation.
"FRI Notes" shall mean the Senior Notes, the Subordinated Notes and any
other general unsecured Indebtedness of FRI, which may be in one or more classes
or series and may include zero coupon notes.
"GAAP" shall mean generally accepted accounting principles in the United
States as in effect on the date of this Agreement and not including any
interpretations or regulations that have been proposed but that have not been
enacted.
"Hamlet Acquisition Agreement" shall mean the Stock Purchase Agreement,
dated as of June 9, 1998, between the Company and KKR, the final form of which
has been provided to counsel to the Purchasers.
"Hazardous Substance" shall mean any hazardous or toxic material, substance
or waste, pollutant or contaminant which is regulated under any statute, law,
ordinance, rule or regulation of any local, state, regional or federal authority
having jurisdiction over the property of the Company and it Subsidiaries or its
use, including but not limited to any material, substance or waste which is:
(a) defined as a hazardous substance under Section 31 1 of the Federal Water
Pollution Control Act (33 U.S.C. SS1317) as amended; (b) regulated as a
hazardous waste under Section 1004 or Section 3001 of the Federal Solid Waste
Disposal Act, as amended by the Resource Conservation and Recovery Act (42
U.S.C. Section 6901 et seq.) as amended; (c) defined as a hazardous substance
under Section 101 of the Comprehensive Environmental Response, Compensation and
Liability Act (42 U.S.C. Section 9601 et seq.) or (d) defined or regulated as a
hazardous substance or hazardous waste under any rules or regulations
promulgated under any of the foregoing statutes.
"Hedging Obligations" with respect to any Person, means the obligations of
such Person under (i) interest rate swap agreements, interest rate cap
agreements and interest rate collar agreements and (ii) other agreements or
arrangements designed to protect such Person against fluctuations in interest
rates or currency exchange rates.
"Indebtedness" of any Person as of any date means and includes, without
duplication, (i) all debt of such Person, (ii) all obligations of such Person in
respect of letters of credit or letter of credit reimbursement obligations
(whether or not such items would appear on the balance sheet of such Person) and
(iii) all guarantees by such Person of items that would constitute Indebtedness
under this definition (whether or not such items would appear on such balance
sheet). The amount of Indebtedness of any Person at any date shall be, without
23
duplication, the principal amount that would be shown on a balance sheet of such
Person prepared as of such date in accordance with GAAP and the maximum
liability of any contingent obligations referred to in clauses (i) through (iii)
above at such date.
"Information" shall have the meaning provided under Section 3.2 of this
Agreement.
"Interest Rate" shall have the meaning provided under Section 1.1 of this
Agreement.
"Investment" shall mean the sum of all investments, made in cash or by
delivery of property on or prior to the applicable date of determination, by the
Company or any of its Subsidiaries in any Unrestricted Subsidiary, whether by
acquisition of stock, Indebtedness, or other obligation or security of such
Unrestricted Subsidiary, or by loan, advance, capital contribution or otherwise,
less the aggregate amount by which such investments have been reduced by
repayment, sale of such Unrestricted Subsidiary, redesignation of such
Unrestricted Subsidiary as a Subsidiary or otherwise.
"KKR" shall mean Xxx Xxx Roo, Inc.
"Lien" shall mean any lien, security interest, charge or encumbrance of any
kind (including any conditional sale or other title retention agreement, any
lease in the nature thereof, and any agreement to give any security interest).
"Material Subsidiary" shall mean a Subsidiary of the Company that is a
"significant subsidiary" as defined in Rule 1-02(w) of Regulation S-X
promulgated under the Securities Act.
"Maximum Amount" on any date shall mean, if such date is (a) on or prior
to December 31, 1999, $55,000,000, or (b) during any fiscal year thereafter, the
sum of (i) $35,000,000 and (ii) the Excess EBITDA; provided, that the Maximum
--------
Amount shall in no event exceed $55,000,000.
"Merger Agreement" shall mean the Agreement and Plan of Merger, dated as of
June 9, 1998, by and among Family Restaurants, Inc., FRI-Sub, Inc. and KKR, the
final form of which has been provided to counsel to the Purchasers.
"Note" shall have the meaning provided in Section 1.1 of this Agreement.
"Note Register" shall have the meaning provided in Section 10.1 of this
Agreement.
"Note Registrar" shall have the meaning provided in Section 10.1 of this
Agreement.
"Noteholder" shall mean any of the holders of one or more Notes from time
to time.
24
"Officer" shall mean the Chairman of the Board, the President, any Vice
President, the Treasurer, the Secretary or the Controller of any Person.
"Permitted Lien" means (i) (a) Liens existing on the date of, or pursuant
to, this Agreement and (b) Liens existing upon the assets of KKR, THG, and each
of their subsidiaries, which Liens are in existence on the date hereof or
incurred in the ordinary course of business consistent with past practice on or
prior to the Closing Date and that were not created in connection with, or in
anticipation of, the transactions contemplated by the Merger Agreement and the
Hamlet Acquisition Agreement; (ii) Liens for taxes, assessments or governmental
charges or claims that are not yet due or delinquent or that are being contested
in good faith by appropriate proceedings if a reserve or other appropriate
provision, if any, as shall be required in conformity with GAAP shall have been
made therefor; (iii) statutory Liens or landlords', carriers', warehousemen's,
mechanics', suppliers', materialmen's, repairmen's or other like Liens arising
in the ordinary course of business with respect to amounts not yet overdue for a
period of 45 days or amounts being contested in good faith by appropriate
proceedings if a reserve or other appropriate provision, if any, as shall be
required by GAAP shall have been made therefor; (iv) Liens incurred by or
deposits made in connection with workers' compensation, unemployment insurance
and other types of social security benefits; (v) Liens incurred or deposits made
to secure the performance of tenders, bids, leases, statutory obligations,
surety and appeal bonds, government contracts, performance and return-of-money
bonds and other obligations of like nature incurred in the ordinary course of
business; (vi) attachment or judgment Liens not giving rise to a Default or an
Event of Default; (vii) easements, rights-of-way, restrictions and other similar
charges or encumbrances not interfering with the ordinary conduct of the
business of the Company or any of its Subsidiaries; (viii) leases or subleases
granted to others incurred in the ordinary course of business; (ix) purchase
money Liens incurred to secure the purchase price of property (and Liens on
property existing at the time of the acquisition thereof), which Lien shall not
cover any property other than that being acquired, purchased, improved or
constructed, and shall not cover property purchased, acquired, constructed or
improved more than 12 months before the creation of such Lien; (x) title defects
or irregularities that do not in the aggregate materially impair the use of the
property; (xi) obligations with respect to Capitalized Lease Obligations; (xii)
Liens pursuant to sale and leaseback transactions incurred in the ordinary
course of business; (xiii) Liens securing obligations under the Credit Agreement
and the documents entered into in connection therewith; (xiv) Liens in favor of
the Company or any wholly owned Subsidiary of the Company; (xv) any other Liens
imposed by operation of law that do not materially affect the Company's ability
to perform its obligations under the Notes and this Agreement; (xvi) extensions
(but not expansions that are not otherwise Permitted Liens), renewals,
refinancings or refundings of any Liens referred to in clauses (i) through (xv)
above; and (xvii) Liens in addition to the foregoing, provided that the amount
--------
of the obligations secured by such Liens does not exceed in the aggregate
$29,000,000.
"Person" shall mean an individual, partnership, corporation, trust or
unincorporated organization, and a government or agency or political subdivision
thereof.
25
"Pledged Collateral" shall mean:
(a) the Pledged Securities and the certificates representing the
Pledged Securities and any interest of the Company in the entries on the
books of any financial intermediary pertaining to the Pledged Securities,
and all dividends or distributions of any kind whatsoever (other than cash
or cash equivalents) from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the Pledged
Securities;
(b) all additional shares of, and all securities convertible into, or
exchangeable into or exercisable for, warrants, options and other rights to
purchase, stock (whether certificated or uncertificated and now existing or
hereafter created) of THG from time to time acquired by the Company in any
manner (which shares shall be deemed to be part of the Pledged Securities),
the certificates or other instruments representing such additional shares,
securities, warrants, options or other rights and any interest of the
Company in the entries on the books of any financial intermediary
pertaining to such additional shares, and all dividends or distributions of
any kind whatsoever (other than cash or cash equivalents) from time to time
received, receivable or otherwise distributed in respect of or in exchange
for any or all of such additional shares, securities, warrants, options or
other rights; and
(c) to the extent not covered above, all Proceeds thereof (other than
dividends or distributions of cash or cash equivalents).
"Pledged Securities" shall mean all the shares of capital stock of THG,
which are evidenced by the certificates identified on a Schedule to be delivered
on or prior to the Closing Date.
"Proceeds" shall have the meaning assigned that term under the Uniform
Commercial Code as in effect in any relevant jurisdiction or under relevant law.
"Purchase Price" with respect to any Note shall mean the Purchase Price
thereof, which shall equal the amount that provides a yield to July 31, 1999 of
14% per annum.
"Purchaser" shall mean the Persons listed under Schedule I attached hereto.
"Related Person" shall mean, with respect to any Person, (A) an Affiliate
of such Person, (B) any investment manager, investment advisor or general
partner of such Person, and (C) any investment fund, investment account or
investment entity whose investment manager, investment advisor or general
partner is such Person or a Related Person of such Person.
26
"Securities Act" shall have the same meaning as in Section 3.2(h).
"Senior Notes" means (i) the 9 3/4% Senior Notes of FRI due February 1,
2002 as such Notes may be restated, amended, supplemented or otherwise modified
from time to time hereafter and (ii) any refunding or replacement of any
Indebtedness provided for in clause (i) or this clause (ii).
"Stock" means all shares, options, warrants, interests, participations, or
other equivalents (regardless of how designated) of or in a corporation or
equivalent entity, whether voting or nonvoting, including common stock,
preferred stock, or any other "equity security" (as such term is defined in Rule
3a11-1 of the General Rules and Regulations promulgated by the Securities and
Exchange Commission under the Exchange Act).
"Stock Based Plan" means any stock option plan, stock appreciation rights
plan or other similar plan or supplement relating to capital Stock of FRI or any
of its Subsidiaries, whether in effect on the date hereof or established
hereafter, established for the benefit of employees of FRI or of any Subsidiary
of FRI.
"Subordinated Notes" mean (i) the 10 7/8% Senior Subordinated Discounts
Notes of FRI due February 1, 2004 as such Notes may be restated, amended,
supplemented or otherwise modified from time to time hereafter (ii) and any
refunding or replacement of any Indebtedness provided for in clause (i) or this
clause (ii).
The term "subsidiary" shall mean, as to any particular parent corporation,
any corporation, partnership, limited liability company, business trust or other
entity of which more than 50% (by number of votes) of the Voting Stock shall be
owned by such parent corporation and/or one or more corporations which are
themselves Subsidiaries of such parent corporation. The term "Subsidiary" shall
mean a subsidiary of the Company other than an Unrestricted Subsidiary.
"Transaction" shall have the meaning provided under Section 5.9 herein.
"Value Creation Units Plan" shall mean the Family Restaurants, Inc. and
FRI-MRD Corporation Value Creation Units Plan.
"Unrestricted Subsidiary" shall mean any Subsidiary of the Company (whether
now existing or hereafter created) that is designated an Unrestricted Subsidiary
by the Board of Directors of the Company and not thereafter redesignated as a
Subsidiary. Upon designation of a Subsidiary as an Unrestricted Subsidiary the
Company shall be deemed to have made an Investment in such Unrestricted
Subsidiary equal to the fair market value of the net assets thereof as
determined in good faith by the Board of Directors of the Company. There are no
Unrestricted Subsidiaries as of the Closing Date.
27
"Voting Stock" shall mean securities of any class or classes the holders of
which are ordinarily, in the absence of contingencies, entitled to elect a
majority of the corporate directors (or Persons performing similar functions).
Section 9.2. Accounting Principles. Where the character or amount of any
asset or liability or item of income or expense is required to be determined or
any consolidation or other accounting computation is required to be made for the
purposes of this Agreement, the same shall be done in accordance with GAAP, to
the extent applicable, except where such principles are inconsistent with the
requirements of this Agreement.
SECTION 10. MISCELLANEOUS.
Section 10.1. Note Register. The Company, in its capacity as note registrar
(the "Note Registrar") shall cause to be kept a register (the "Note Register")
for the registration and transfer of the Notes; provided, however, the Company
may at any time designate and cause any other Person to act as the Note
Registrar in order to maintain the Note Register pursuant to the terms of this
Note Agreement. The Note Registrar will register or transfer or cause to be
registered or transferred, as hereinafter provided and under such reasonable
regulations as it may prescribe, any Note issued pursuant to this Agreement.
At any time, and from time to time, the holder of any Note which has been
duly registered as herein above provided may transfer such Note upon surrender
thereof with the Note Registrar duly endorsed or accompanied by a written
instrument of transfer duly executed by the holder of such Note or its attorney
duly authorized in writing and, unless transferred pursuant to an effective
registration statement under the Securities Act, by an opinion of counsel in
form and substance satisfactory to the Company to the effect that such transfer
will be made in compliance with an exemption from the registration requirements
of the Securities Act. Notes shall not be transferred in denominations of less
than $100,000. Notwithstanding any other provision of this Note Agreement, the
Company shall not be required to issue, transfer or exchange any Note for a
denomination of less than $1,000,000 if immediately after such issue, transfer
or exchange there would be issued and outstanding more than twenty Notes in a
denomination of less than $1,000,000.
Promptly upon request of a Noteholder, the Company shall provide such
holder, and any qualified institutional buyer designated by such holder, such
financial and other information as is necessary in order to permit compliance
with the information requirements of Rule 144A(d)(4) under the Securities Act in
connection with the resale of Notes, except at such times as the Company is
subject to the reporting requirements of Section 13 or 15(d) of the Exchange
Act. For purposes of this paragraph, the term "qualified institutional buyer"
shall have the meaning specified in Rule 144A under the Securities Act.
The Person in whose name any Note shall be registered shall be deemed and
treated as the owner and holder thereof for all purposes of this Agreement.
Payment of or on account of
28
the principal, premium and interest, if any, on any Note shall be made to or
upon the written order of such holder.
Section 10.2. Exchange of Notes. At any time and from time to time, upon
not less than ten days' notice given by the holder of any Note initially
delivered or of any Note substituted therefor pursuant to Section 10.1, this
Section 10.2 or Section 10.3, and, upon surrender of such Note at its office,
the Company will deliver in exchange therefor, without expense to the holder,
except as set forth below, Notes for the same aggregate Accreted Value as the
then unpaid Accreted Value of the Note so surrendered, in the denomination of
$1,000,000 or any amount in excess thereof as such holder shall specify, dated
as of the date to which interest has been paid on the Note so surrendered or, if
such surrender is prior to the payment of any interest thereon, then dated as of
the date of issue, registered in the name of such Person or Persons as may be
designated by such holder, and otherwise of the same form and tenor as the Notes
so surrendered for exchange. The Company may require the payment of a sum
sufficient to cover any stamp tax or governmental charge imposed upon such
exchange or transfer.
Section 10.3. Loss, Theft, Etc. of Notes. Upon receipt of evidence
satisfactory to the Company of the loss, theft, mutilation or destruction of any
Note, and in the case of any such loss, theft, or destruction upon delivery of a
bond or indemnity in such form and amount as shall be reasonably satisfactory to
the Company, or in the event of such mutilation upon surrender and cancellation
of any Note, the Company will make and deliver without expense to the holder
thereof, a new Note, of like tenor, in lieu of such lost, stolen, destroyed or
mutilated Note.
Section 10.4. Powers and Rights Not Waived; Remedies Cumulative. No delay
or failure on the part of the holder of any Note in the exercise of any power or
right shall operate as a waiver thereof; nor shall any single or partial
exercise of the same preclude any other or further exercise thereof, or the
exercise of any other power or right, and the rights and remedies of the holder
of any Note are cumulative to and are not exclusive of any rights or remedies
any such holder would otherwise have, and no waiver or consent, given or
extended pursuant to Section 7 hereof or otherwise, shall extend to or affect
any obligation or right not expressly waived or consented to.
Section 10.5. Notices. All communications provided for hereunder shall be
in writing and, if to any Purchaser, delivered or mailed by prepaid overnight
air courier, or by facsimile communication, in each case addressed to such
Purchaser at its address appearing on Schedule I to this Agreement or such other
address as such Purchaser or subsequent holder may designate to the Company in
writing, if to the Company, delivered and mailed by prepaid overnight air
courier, or by facsimile
29
communication, in each case to the Company at 00000 Xxx Xxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxx 00000, Attention: General Counsel or to such other address as the
Company may in writing designate to such Purchaser or subsequent holder, and if
to the Agent, delivered and mailed by prepaid overnight air courier, or by
facsimile communication, in each case to the Agent at the address set forth on
the signature pages hereto or to such other address as the Agent may in writing
designate to such Purchaser or subsequent holder; provided, however, that a
notice sent by overnight air courier shall only be effective if delivered at a
street address designated for such purpose in Schedule I, and a notice to such
Purchaser by facsimile communication shall only be effective if confirmed by a
copy thereof by prepaid overnight air courier, in either case, as such Purchaser
or a subsequent holder of any Note may designate to the Company in writing.
Section 10.6. Successors and Assigns. This Agreement shall be binding upon
the Company and its successors and assigns and shall inure to each Purchaser's
and the Agent's benefit and to the benefit of their respective successors and
assigns, including each successive holder or holders of any Notes.
Section 10.7. Integration and Severability. This Agreement embodies the
entire agreement and understanding between the Purchasers, the Agent and the
Company, and supersedes all prior agreements and understandings relating to the
subject matter hereof. Should any part of this Agreement for any reason be
declared invalid or unenforceable, such decision shall not affect the validity
of any remaining portion, which remaining portion shall remain in force and
effect as if this Agreement had been executed with the invalid or unenforceable
portion thereof eliminated (or, if possible, rewritten to the extent necessary
to eliminate such invalidity or unenforceability) and it is hereby declared the
intention of the parties hereto that they would have executed the remaining
portion of this Agreement without including therein any such part, parts or
portion which may, for any reason, be hereafter declared invalid or
unenforceable.
Section 10.8. Governing Law. THIS AGREEMENT AND THE NOTES ISSUED AND SOLD
HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK INCLUDING, WITHOUT LIMITATION, SECTIONS 5-1401 AND 5-1402 OF
THE NEW YORK GENERAL OBLIGATIONS LAW AND NEW YORK CIVIL PRACTICE LAWS AND RULES
327(b). EACH PARTY HERETO HEREBY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF
THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK FOR
PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT
AND THE NOTES OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY HERETO
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH
IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING
BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A
COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
30
Section 10.9. Captions. The descriptive headings of the various Sections
or parts of this Agreement are for convenience only and shall not affect the
meaning or construction of any of the provisions hereof.
Section 10.10. Brokerage Fees. Libra Investments, Inc. has acted as agent
for the Company in connection with the transactions contemplated hereby and is
being paid a commission by the Company pursuant to a separate letter agreement.
Section 10.11 Termination. This Agreement shall terminate at any time
prior to the satisfaction or waiver of the conditions set forth in Section 4
hereof if (i) the Merger shall not have been consummated before December 18,
1998 or (ii) the Merger Agreement is otherwise terminated in accordance with its
terms. In either such event, this Agreement shall forthwith become void and have
no effect, without any liability on the part of any party hereto.
Notwithstanding the foregoing, nothing contained in this Section shall relieve
any party from liability for any material breach of any covenant, representation
or warranty contained herein.
31
The execution hereof by you shall constitute a contract between us for the
uses and purposes herein above set forth, and this Agreement may be executed in
any number of counterparts, each executed counterpart constituting an original
but all together only one agreement.
FRI-MRD CORPORATION, as Company
By /s/ X.X. Xxxxxxx, Xx.
----------------------------------
Name: X.X. Xxxxxxx, Xx.
Title: President
S-1
Agreed to and Accepted
_________________________, as Agent
By _____________________________
Name:
Title:
Address:
___________________________
___________________________
___________________________
___________________________
[signature pages continued on next page]
S-2
THE XXXXX & XXXXXXXXXX MASTER RETIREMENT TRUST
By: XxxXxx-Xxxxxxx Financial Corporation
Its: Investment Advisor
By: /s/ Xxxxxx X. Xxxxxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Director
[signature pages continued on next page]
S-3
THE MAINSTAY FUNDS, ON BEHALF OF ITS STRATEGIC
INCOME FUND SERIES
By: XxxXxx-Xxxxxxx Financial Corporation
Its: Investment Advisor
By: /s/ Xxxxxx X. Xxxxxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Director
[signature pages continued on next page]
S-4
HIGHBRIDGE CAPITAL CORPORATION
By: XxxXxx-Xxxxxxx Financial Corporation
Its: Investment Advisor
By: /s/ Xxxxxx X. Xxxxxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Director
[signature pages continued on next page]
S-5
THE MAINSTAY FUNDS, ON BEHALF OF ITS HIGH YIELD
CORPORATE BOND FUND SERIES
By: XxxXxx-Xxxxxxx Financial Corporation
Its: Investment Advisor
By: /s/ Xxxxxx X. Xxxxxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Director
[signature pages continued on next page]
S-6
MAINSTAY VP SERIES FUND, INC., ON BEHALF OF HIGH
YIELD CORPORATE BOND PORTFOLIO
By: XxxXxx-Xxxxxxx Financial Corporation
Its: Investment Advisor
By: /s/ Xxxxxx X. Xxxxxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Director
[signature pages continued on next page]
S-7
POLICE OFFICERS PENSION SYSTEM OF THE CITY OF
HOUSTON
By: XxxXxx-Xxxxxxx Financial Corporation
Its: Investment Advisor
By: /s/ Xxxxxx X. Xxxxxxxxx
-----------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Director
[signature pages continued on next page]
S-8
VULCAN MATERIALS COMPANY HIGH YIELD ACCOUNT
By: XxxXxx-Xxxxxxx Financial Corporation
Its: Investment Advisor
By: /s/ Xxxxxx X. Xxxxxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Director
S-9
SCHEDULE I TO NOTE AGREEMENT
Purchaser: THE XXXXX & XXXXXXXXXX MASTER RETIREMENT TRUST
1. Principal Amount of Notes being acquired: $400,000
-------
2. In the case of payments on account of the Notes:
By wire transfer of Federal or other immediately available funds
---- --------
(identifying each payment as to issuer, security and principal or interest)
to:
ABA # 000000000
STATE STREET BANK AND TRUST COMPANY
XXXXXX, XXXX 00000
FOR CREDIT TO:
ACCT NAME: XXXXX & XXXXXXXXXX MASTER RETIREMENT TRUST
DDA # 09237520
ACCT # ZH23
3. All communications shall be delivered or mailed to:
XxxXxx-Xxxxxxx Financial Corporation
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxxxxxxx
Fax: (000) 000-0000
with a copy to:
Kleinberg, Kaplan, Xxxxx & Xxxxx, P.C.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxxxxx, Esq.
Fax: (000) 000-0000
4. Tax I.D. #: 043216086
Purchaser: THE MAINSTAY FUNDS, ON BEHALF OF ITS STRATEGIC INCOME FUND SERIES
1. Principal Amount of Notes being acquired: $100,000
-------
2. In the case of payments on account of the Notes:
By wire transfer of Federal or other immediately available funds
---- --------
(identifying each payment as to issuer, security and principal or interest)
to:
ABA # 000000000
BANK OF NEW YORK/CUST.
GLA 111612
FOR CREDIT TO:
ACCT NAME: MAINSTAY STRATEGIC INCOME FUND
ACCT # 267451
3. All communications shall be delivered or mailed to:
XxxXxx-Xxxxxxx Financial Corporation
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxxxxxxx
Fax: (000) 000-0000
with a copy to:
Kleinberg, Kaplan, Xxxxx & Xxxxx, P.C.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxxxxx, Esq.
Fax: (000) 000-0000
4. Tax I.D. #: 133924140
Purchaser: THE MAINSTAY FUNDS, ON BEHALF OF ITS HIGH YIELD CORPORATE BOND FUND
SERIES
1. Principal Amount of Notes being acquired: $19,410,000
----------
2. In the case of payments on account of the Notes:
By wire transfer of Federal or other immediately available funds
---- --------
(identifying each payment as to issuer, security and principal or interest)
to:
ABA # 000000000
STATE STREET BANK AND TRUST COMPANY
XXXXXX, XXXX 00000
FOR CREDIT TO:
ACCT NAME: MAINSTAY HIGH YIELD CORPORATE BOND FUND
DDA # 4266 0761
ACCT # SN04
3. All communications shall be delivered or mailed to:
XxxXxx-Xxxxxxx Financial Corporation
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxxxxxxx
Fax: (000) 000-0000
with a copy to:
Kleinberg, Kaplan, Xxxxx & Xxxxx, P.C.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxxxxx, Esq.
Fax: (000) 000-0000
4. Tax I.D. #: 00-0000000
Purchaser: MAINSTAY VP SERIES FUND, INC., ON BEHALF OF HIGH YIELD CORPORATE
BOND PORTFOLIO
1. Principal Amount of Notes being acquired: $3,700,000
---------
2. In the case of payments on account of the Notes:
By wire transfer of Federal or other immediately available funds
---- --------
(identifying each payment as to issuer, security and principal or interest)
to:
ABA # 000000000
BANK OF NEW YORK/CUST.
GLA 111612
FOR CREDIT TO:
ACCT NAME: MAINSTAY V.P. SERIES HIGH YIELD CORPORATE BOND FUND
ACCT # 274467
3. All communications shall be delivered or mailed to:
XxxXxx-Xxxxxxx Financial Corporation
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxxxxxxx
Fax: (000) 000-0000
with a copy to:
Kleinberg, Kaplan, Xxxxx & Xxxxx, P.C.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxxxxx, Esq.
Fax: (000) 000-0000
4. Tax I.D. #: 00-0000000
Purchaser: POLICE OFFICERS PENSION SYSTEM OF THE CITY OF HOUSTON
1. Principal Amount of Notes being acquired: $350,000
2. In the case of payments on account of the Notes:
By wire transfer of Federal or other immediately available funds
---- --------
(identifying each payment as to issuer, security and principal or interest)
to:
ABA # 000-000-000
NORTHERN TRUST/CHGO TRUST
FOR CREDIT TO:
ACCT # 5186061000
ACCT NAME: POLICE OFFICERS PENSION SYSTEM OF THE CITY OF HOUSTON
ACCT # 26-41113
3. All communications shall be delivered or mailed to:
XxxXxx-Xxxxxxx Financial Corporation
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxxxxxxx
Fax: (000) 000-0000
with a copy to:
Kleinberg, Kaplan, Xxxxx & Xxxxx, P.C.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxxxxx, Esq.
Fax: (000) 000-0000
4. Tax I.D. #: 00-0000000
Purchaser: VULCAN MATERIALS COMPANY HIGH YIELD ACCOUNT
1. Principal Amount of Notes being acquired: $40,000
2. In the case of payments on account of the Notes:
By wire transfer of Federal or other immediately available funds
---- --------
(identifying each payment as to issuer, security and principal or interest)
to:
ABA # 000-000-000
NORTHERN TRUST/CHGO TRUST
FOR CREDIT TO:
ACCT # 5186061000
ACCT NAME: VULCAN MATERIALS
ACCT # 26-00065
3. All communications shall be delivered or mailed to:
XxxXxx-Xxxxxxx Financial Corporation
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxxxxxxx
Fax: (000) 000-0000
with a copy to:
Kleinberg, Kaplan, Xxxxx & Xxxxx, P.C.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxxxxx, Esq.
Fax: (000) 000-0000
4. Tax I.D. #: 751867619
