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EXHIBIT 10.9
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EXECUTION COPY
XXXXXXX FAMILY RESTAURANTS, X.X.
XXXXXXX RESTAURANTS OPERATING COMPANY, L.P.
$20,000,000 7.19% SENIOR NOTES DUE 2005
$15,000,000 PRIVATE SHELF NOTE FACILITY
NOTE PURCHASE AND PRIVATE SHELF FACILITY
Dated as of December 13, 1995
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TABLE OF CONTENTS
(Not Part of Agreement)
PAGE
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1. AUTHORIZATION OF ISSUE OF NOTES(1)
1A. Authorization of Issue of Series A Notes(1)
1B. Authorization of Issue of Shelf Notes(1)
2. PURCHASE AND SALE OF NOTES(2)
2A. Purchase and Sale of Series A Notes(2)
2B. Purchase and Sale of Shelf Notes(2)
2B(1). Facility(2)
2B(2). Issuance Period(3)
2B(3). Periodic Spread Information(3)
2B(4). Request for Purchase(3)
2B(5). Rate Quotes(4)
2B(6). Acceptance(4)
2B(7). Market Disruption(4)
2B(8). Facility Closings(5)
2B(9). Fees(5)
2B(9)(i). Structuring and Issuance Fee(5)
2B(9)(ii). Delayed Delivery Fee(6)
2B(9)(iii). Cancellation Fee(6)
3. CONDITIONS OF CLOSING(7)
3A. Certain Documents(7)
3B. Representations and Warranties; No Default(8)
3C. Purchase Permitted by Applicable Laws(8)
3D. Payment of Fees(8)
4. PREPAYMENTS .(8)
4A. Required Prepayments of Series A Notes.(8)
4B. Required Prepayments of Shelf Notes.(8)
4C. Optional Prepayment with Yield-Maintenance Amount(8)
4D. Notice of Optional Prepayment(9)
4E. Application of Prepayments(9)
4F. Retirement of Notes(9)
5. AFFIRMATIVE COVENANTS(9)
5A. Financial Statements.(9)
5B. Inspection of Property(12)
5C. Covenant to Secure Notes Equally.(12)
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5D. Guaranteed Obligations.(12)
5E. Maintenance of Insurance(13)
5F. Maintenance of Existence/Compliance with
Law/Preservation of Property(13)
5G. Compliance with Franchises(13)
5H. No Integration(14)
5I. Payment of Taxes and Claims(14)
6. NEGATIVE COVENANTS(14)
6A. Coverage Requirements(14)
6B. Liens, Debt and Other Restrictions(14)
6B(1). Liens(14)
6B(2). Indebtedness .(15)
6B(3). Loans, Advances, Investments and
Contingent Liabilities(16)
6B(4). Consolidation, Merger and Sale of Assets(17)
6B(5). Transactions with Related Party(18)
6B(6). Sale or Discount of Receivables(18)
6B(7). Sale and Leaseback(19)
6C. ERISA(19)
6D. Fed Regulations, Etc.(19)
6E. Environmental Matters(19)
6F. Issuance of Subsidiary Equity(19)
7. EVENTS OF DEFAULT(20)
7A. Acceleration(20)
7B. Rescission of Acceleration(23)
7C. Notice of Acceleration or Rescission(23)
7D. Other Remedies(23)
8. REPRESENTATIONS, COVENANTS AND WARRANTIES(23)
8A. Organization and Ownership(24)
8B. Financial Statements(24)
8C. Actions Pending(25)
8D. Outstanding Debt(25)
8E. Title to Properties(25)
8F. Taxes(25)
8G. Conflicting Agreements and Other Matters(26)
8H. Offering of Notes(26)
8I. Regulation G, Etc.(26)
8J. ERISA(27)
8K. Governmental Consents(27)
8L. Use of Proceeds(27)
8M. Compliance with Law/Franchise Xxxxxx(27)
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8N. Intellectual Property(28)
8O. Holding Company and Investment Company Status(28)
8P. Disclosure.(29)
9. REPRESENTATIONS OF THE PURCHASERS(29)
10. DEFINITIONS; ACCOUNTING MATTERS(30)
10A. Yield-Maintenance Terms(30)
10B. Other Terms(31)
10C. Accounting Principles, Terms and Determinations(40)
11. MISCELLANEOUS(40)
11A. Note Payments(40)
11B. Expenses(41)
11C. Consent to Amendments(41)
11D. Form, Registration, Transfer and Exchange of Notes;
Lost Notes(42)
11E. Persons Deemed Owners; Participations(43)
11F. Survival of Representations and Warranties;
Entire Agreement(43)
11G. Successors and Assigns(43)
11H. Confidentiality; Disclosure to Other Persons(43)
11I. Notices(44)
11J. Descriptive Headings(44)
11K. Satisfaction Requirement(44)
11L. Payments Due on Non-Business Days(44)
11M. Counterparts(45)
11N. Severability(45)
11O. Independence of Covenants(45)
11P. Joint and Several Obligations(45)
11Q. Governing Law/Jurisdiction(45)
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EXHIBITS
Purchaser Schedule
Information Schedule
EXHIBIT A-1 -- Form of Series A Note
EXHIBIT A-2 -- Form of Shelf Note
EXHIBIT B -- Form of Request for Purchase
EXHIBIT C -- Form of Confirmation of Acceptance
EXHIBIT D-1 -- Form of Opinion of Counsel, Series A Note Closing
EXHIBIT D-2 -- Form of Opinion of Counsel, Shelf Note Closing
EXHIBIT E -- List of Agreements Restricting Debt
EXHIBIT F -- List of Franchises; Defaults Under Franchises
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PERKINS FAMILY RESTAURANTS, X.X.
XXXXXXX RESTAURANTS OPERATING COMPANY, L.P.
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxx 00000-0000
As of December 13, 1995
The Prudential Insurance Company
of America ("PRUDENTIAL")
Each Prudential Affiliate (as hereinafter
defined) which becomes bound by certain
provisions of this Agreement as hereinafter
provided (together with Prudential the "PURCHASERS")
c/o Prudential Capital Group
Four Gateway Center
000 Xxxxxxxx Xxxxxx, Xxxxxx, X.X. 07102
Ladies and Gentlemen:
The undersigned, XXXXXXX FAMILY RESTAURANTS, L.P., a Delaware limited
partnership ("PFR"), and PERKINS RESTAURANTS OPERATING COMPANY, L.P., a
Delaware limited partnership ("PERKINS"; PFR and Perkins being herein each
individually called a "PARTNERSHIP" and collectively called the
"PARTNERSHIPS"), hereby agree with you as follows:
1. AUTHORIZATION OF ISSUE OF NOTES.
1A. AUTHORIZATION OF ISSUE OF SERIES A NOTES. The Partnerships will
authorize the issue of their senior promissory notes (the "SERIES A NOTES") in
the aggregate principal amount of $20,000,000, to be dated the date of issue
thereof, to mature December 13, 2005, to bear interest on the unpaid balance
thereof from the date thereof until the principal thereof shall have become due
and payable at the rate of 7.19% per annum and on overdue principal,
Yield-Maintenance Amount and interest at the rate specified therein, and to be
substantially in the form of Exhibit A-1 attached hereto. The terms "SERIES A
NOTE" and "SERIES A NOTES" as used herein shall include each Series A Note
delivered pursuant to any provision of this Agreement and each Series A Note
delivered in substitution or exchange for any such Series A Note pursuant to
any such provision.
1B. AUTHORIZATION OF ISSUE OF SHELF NOTES. The Partnerships will
authorize the issue of its additional senior promissory notes (the "SHELF
NOTES") in the aggregate principal amount of $15,000,000, to be dated the date
of issue thereof, to mature, in the case of each Shelf
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Note so issued, no more than ten years after the date of original issuance
thereof, to have an average life, in the case of each Shelf Note so issued, of
no more than six years after the date of original issuance thereof, to bear
interest on the unpaid balance thereof from the date thereof at the rate per
annum, and to have such other particular terms, as shall be set forth,
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in the case of each Shelf Note so issued, in the Confirmation of Acceptance
with respect to such Xxxxx Note delivered pursuant to paragraph 2B(6), and to
be substantially in the form of Exhibit A-2 attached hereto. The terms "SHELF
NOTE" and "SHELF NOTES" as used herein shall include each Shelf Note delivered
pursuant to any provision of this Agreement and each Shelf Note delivered in
substitution or exchange for any such Shelf Note pursuant to any such
provision. The terms "NOTE" and "NOTES" as used herein shall include each
Series A Note and each Shelf Note delivered pursuant to any provision of this
Agreement and each Note delivered in substitution or exchange for any such Note
pursuant to any such provision. Notes which have (i) the same final maturity,
(ii) the same principal prepayment dates, (iii) the same principal prepayment
amounts (as a percentage of the original principal amount of each Note), (iv)
the same interest rate, (v) the same interest payment periods and (vi) the same
date of issuance (which, in the case of a Note issued in exchange for another
Note, shall be deemed for these purposes the date on which such Note's ultimate
predecessor Note was issued), are herein called a "SERIES" of Notes.
2. PURCHASE AND SALE OF NOTES.
2A. PURCHASE AND SALE OF SERIES A NOTES. The Partnerships hereby
agree to sell to Prudential and, subject to the terms and conditions herein
set forth, Prudential agrees to purchase from the Partnerships $20,000,000
aggregate principal amount of Series A Notes at 100% of such aggregate
principal amount. On December 13, 1995 or any other date prior to January 26,
1995 upon which the Partnerships and Prudential may agree (herein called the
"SERIES A CLOSING DAY"), the Partnerships will deliver to Prudential at the
offices of Prudential Capital Group, Four Gateway Center, 000 Xxxxxxxx Xxxxxx,
Xxxxxx, X.X. 07102, one or more Series A Notes registered in its name,
evidencing the aggregate principal amount of Series A Notes to be purchased by
Prudential and in the denomination or denominations specified with respect to
Prudential in the Purchaser Schedule attached hereto, against payment of the
purchase price thereof by transfer of immediately available funds for credit
to the Xxxxxxx Restaurants Operating Company, L.P. account #541-40512 at First
National Bank of Boston, Boston, Massachusetts, ABA Routing Number #000-000-000.
2B. PURCHASE AND SALE OF SHELF NOTES.
2B(1). FACILITY. Prudential is willing to consider, in its sole
discretion and within limits which may be authorized for purchase by Prudential
and Prudential Affiliates from time to time, the purchase of Shelf Notes
pursuant to this Agreement. The willingness of Prudential to consider such
purchase of Shelf Notes is herein called the "FACILITY". At any time, the
aggregate principal amount of Shelf Notes stated in paragraph 1B, minus the
aggregate principal amount of Shelf Notes purchased and sold pursuant to this
Agreement prior to such time, minus the aggregate principal amount of Accepted
Notes (as hereinafter defined) which have not yet been purchased and sold
hereunder prior to such time, plus the aggregate principal amount of Shelf
Notes purchased and sold pursuant to this Agreement and thereafter retired
prior to such time is herein called the "AVAILABLE FACILITY AMOUNT" at such
time. NOTWITHSTANDING THE WILLINGNESS OF PRUDENTIAL TO CONSIDER PURCHASES OF
SHELF NOTES, THIS AGREEMENT IS ENTERED INTO ON THE EXPRESS UNDERSTANDING THAT
NEITHER PRUDENTIAL NOR ANY PRUDENTIAL AFFILIATE SHALL BE
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OBLIGATED TO MAKE OR ACCEPTOFFERS TO PURCHASE SHELF NOTES, OR TO QUOTE RATES,
SPREADS OR OTHER TERMS WITH RESPECT TO SPECIFIC PURCHASES OF SHELF NOTES, AND
THE FACILITY SHALL IN NO WAY BE CONSTRUED AS A COMMITMENT BY PRUDENTIAL OR ANY
PRUDENTIAL AFFILIATE.
2B(2). ISSUANCE PERIOD. Shelf Notes may be issued and sold pursuant to
this Agreement until the earlier of (i) the second anniversary of the date of
this Agreement (or if such anniversary is not a Business Day, the Business Day
next preceding such anniversary) and (ii) the thirtieth day after Prudential
shall have given to the Partnerships, or the Partnerships shall have given to
Prudential, a notice stating that it elects to terminate the issuance and sale
of Shelf Notes pursuant to this Agreement (or if such thirtieth day is not a
Business Day, the Business Day next preceding such thirtieth day). The period
during which Shelf Notes may be issued and sold pursuant to this Agreement is
herein called the "ISSUANCE PERIOD".
2B(3). PERIODIC SPREAD INFORMATION. Not later than 9:30 A.M. (New York
City local time) on a Business Day during the Issuance Period if there is an
Available Facility Amount on such Business Day, the Partnerships may request by
telecopier or telephone, and Prudential will, to the extent reasonably
practicable, provide to the Company on such Business Day (or, if such request
is received after 9:30 A.M. (New York City local time) on such Business Day, on
the following Business Day), information (by telecopier or telephone) with
respect to various spreads at which Prudential or Prudential Affiliates might
be interested in purchasing Shelf Notes of different average lives; provided,
however, that the Partnerships may not make such requests more frequently than
once in every five Business Days or such other period as shall be mutually
agreed to by the Partnerships and Prudential. The amount and content of
information so provided shall be in the sole discretion of Prudential but it is
the intent of Prudential to provide information which will be of use to the
Partnerships in determining whether to initiate procedures for use of the
Facility. Information so provided shall not constitute an offer to purchase
Shelf Notes, and neither Prudential nor any Prudential Affiliate shall be
obligated to purchase Shelf Notes at the spreads specified. Information so
provided shall be representative of potential interest only for the period
commencing on the day such information is provided and ending on the earlier of
the fifth Business Day after such day and the first day after such day on which
further spread information is provided. Prudential may suspend or terminate
providing information pursuant to this paragraph 2B(3) for any reason,
including its determination that the credit quality of the Partnerships has
declined since the date of this Agreement.
2B(4). REQUEST FOR PURCHASE. The Partnerships may from time to time
during the Issuance Period make requests for purchases of Shelf Notes (each
such request being herein called a "REQUEST FOR PURCHASE"). Each Request for
Purchase shall be made to Prudential by telecopier or overnight delivery
service, and shall (i) specify the aggregate principal amount of Shelf Notes
covered thereby, which shall not be less than $5,000,000 and not be greater
than the Available Facility Amount at the time such Request for Purchase is
made, (ii) specify the principal amounts, final maturities, principal
prepayment dates and amounts and interest payment periods (quarterly or
semi-annual in arrears) of the Shelf Notes covered thereby, (iii) specify the
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use of proceeds of such Shelf Notes, (iv) specify the proposed day for the
closing of the purchase and sale of such Shelf Notes, which shall be a Business
Dayduring the Issuance Period not less than 10 days and not more than 25 days
after the making of such Request for Purchase, (v) specify the number of the
account and the name and address of the depository institution to which the
purchase prices of such Shelf Notes are to be transferred on the Closing Day
for such purchase and sale, (vi) certify that the representations and
warranties contained in paragraph 8 are true on and as of the date of such
Request for Purchase and that there exists on the date of such Request for
Purchase no Event of Default or Default, and (vii) be substantially in the form
of Exhibit B attached hereto. Each Request for Purchase shall be in writing
and shall be deemed made when received by Prudential.
2B(5). RATE QUOTES. Not later than five Business Days after the
Partnerships shall have given Prudential a Request for Purchase pursuant to
paragraph 2B(3), Prudential may, but shall be under no obligation to, provide
to the Partnerships by telephone or telecopier, in each case between 9:30 A.M.
and 1:30 P.M. New York City local time (or such later time as Prudential may
elect) interest rate quotes for the several principal amounts, maturities,
principal prepayment schedules, and interest payment periods of Shelf Notes
specified in such Request for Purchase. Each quote shall represent the
interest rate per annum payable on the outstanding principal balance of such
Shelf Notes at which Prudential or a Prudential Affiliate would be willing to
purchase such Shelf Notes at 100% of the principal amount thereof.
2B(6). ACCEPTANCE. Within 30 minutes after Prudential shall have provided
any interest rate quotes pursuant to paragraph 2B(5) or such shorter period as
Prudential may specify to the Partnerships (such period herein called the
"ACCEPTANCE WINDOW"), the Partnerships may, subject to paragraph 2B(7), elect
to accept such interest rate quotes as to not less than $5,000,000 aggregate
principal amount of the Shelf Notes specified in the related Request for
Purchase. Such election shall be made by an Authorized Officer of the
Partnerships notifying Prudential by telephone or telecopier within the
Acceptance Window that the Partnerships elects to accept such interest rate
quotes, specifying the Shelf Notes (each such Shelf Note being herein called an
"ACCEPTED NOTE") as to which such acceptance (herein called an "ACCEPTANCE")
relates. The day the Partnerships notify an Acceptance with respect to any
Accepted Notes is herein called the "ACCEPTANCE DAY" for such Accepted Notes.
Any interest rate quotes as to which Prudential does not receive an Acceptance
within the Acceptance Window shall expire, and no purchase or sale of Shelf
Notes hereunder shall be made based on such expired interest rate quotes.
Subject to paragraph 2B(7) and the other terms and conditions hereof, the
Partnerships agrees to sell to Prudential or a Prudential Affiliate, and
Prudential agrees to purchase, or to cause the purchase by a Prudential
Affiliate of, the Accepted Notes at 100% of the principal amount of such Notes.
As soon as practicable following the Acceptance Day, the Partnerships,
Prudential and each Prudential Affiliate which is to purchase any such Accepted
Notes will execute a confirmation of such Acceptance substantially in the form
of Exhibit C attached hereto (herein called a "CONFIRMATION OF ACCEPTANCE").
If the Partnerships should fail to execute and return to Prudential within
three Business Days following receipt thereof a Confirmation of Acceptance with
respect to any Accepted Notes, Prudential may at its election at any time prior
to its receipt thereof cancel the closing with respect to such Accepted Notes
by so notifying the Company in writing.
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2B(7). MARKET DISRUPTION. Notwithstanding the provisions of paragraph
2B(6), if Prudential shall have provided interest rate quotes pursuant to
paragraph 2B(5) and thereafter prior to the time an Acceptance with respect to
such quotes shall havebeen notified to Prudential in accordance with paragraph
2B(6) the domestic market for U.S. Treasury securities or derivatives shall
have closed or there shall have occurred a general suspension, material
limitation, or significant disruption of trading in securities generally on the
New York Stock Exchange or in the domestic market for U.S. Treasury securities
or derivatives, then such interest rate quotes shall expire, and no purchase or
sale of Shelf Notes hereunder shall be made based on such expired interest rate
quotes. If the Partnerships thereafter notify Prudential of the Acceptance of
any such interest rate quotes, such Acceptance shall be ineffective for all
purposes of this Agreement, and Prudential shall promptly notify the
Partnerships that the provisions of this paragraph 2B(7) are applicable with
respect to such Acceptance.
2B(8). FACILITY CLOSINGS. Not later than 11:30 A.M. (New York City local
time) on the Closing Day for any Accepted Notes, the Partnerships will deliver
to each Purchaser listed in the Confirmation of Acceptance relating thereto at
the offices of the Prudential Capital Group, Four Gateway Center, 000 Xxxxxxxx
Xxxxxx, Xxxxxx, Xxx Xxxxxx 00000, the Accepted Notes to be purchased by such
Purchaser in the form of one or more Notes in authorized denominations as such
Purchaser may request for each Series of Accepted Notes to be purchased on the
Closing Day, dated the Closing Day and registered in such Purchaser's name (or
in the name of its nominee), against payment of the purchase price thereof by
transfer of immediately available funds for credit to the Company's account
specified in the Request for Purchase of such Notes. If the Partnerships fail
to tender to any Purchaser the Accepted Notes to be purchased by such Purchaser
on the scheduled Closing Day for such Accepted Notes as provided above in this
paragraph 2B(8), or any of the conditions specified in paragraph 3 shall not
have been fulfilled by the time required on such scheduled Closing Day, the
Partnerships shall, prior to 1:00 P.M., New York City local time, on such
scheduled Closing Day notify Prudential (which notification shall be deemed
received by each Purchaser) in writing whether (i) such closing is to be
rescheduled (such rescheduled date to be a Business Day during the Issuance
Period not less than one Business Day and not more than 10 Business Days after
such scheduled Closing Day (the "RESCHEDULED CLOSING DAY") and certify to
Prudential (which certification shall be for the benefit of each Purchaser)
that the Partnerships reasonably believe that it will be able to comply with
the conditions set forth in paragraph 3 on such Rescheduled Closing Day and
that the Partnerships will pay the Delayed Delivery Fee in accordance with
paragraph 2B(9)(iii) or (ii) such closing is to be canceled. In the event that
the Partnerships shall fail to give such notice referred to in the preceding
sentence, Prudential (on behalf of each Purchaser) may at its election, at any
time after 1:00 P.M., New York City local time, on such scheduled Closing Day,
notify the Partnerships in writing that such closing is to be canceled.
Notwithstanding anything to the contrary appearing in this Agreement, the
Partnerships may elect to reschedule a closing with respect to any given
Accepted Notes on not more than one occasion, unless Prudential shall have
otherwise consented in writing.
2B(9). FEES.
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2B(9)(i). STRUCTURING AND ISSUANCE FEE. The Partnerships will pay to
Prudential in immediately available funds a fee (herein called the "ISSUANCE
FEE") on each Closing Day (other than the Series A Closing Day) in an amount
equal to 0.125% of theaggregate principal amount of Notes sold on such Closing
Day. In addition, the Partnerships will pay to Prudential on the Series A
Closing Day a structuring fee in the amount of $10,000.
2B(9)(ii). DELAYED DELIVERY FEE. If the closing of the purchase and sale
of any Accepted Note is delayed for any reason beyond the original Closing Day
for such Accepted Note, the Partnerships will pay to Prudential (a) on the
Cancellation Date or actual closing date of such purchase and sale and (b) if
earlier, the next Business Day following 90 days after the Acceptance Day for
such Accepted Note and on each Business Day following 90 days after the prior
payment hereunder, a fee (herein called the "DELAYED DELIVERY FEE") calculated
as follows:
(BEY - MMY) X (DTS/360 X PA)
where "BEY" means Bond Equivalent Yield, i.e., the bond equivalent yield per
annum of such Accepted Note, "MMY" means Money Market Yield, i.e., the yield
per annum on a commercial paper investment of the highest quality selected by
Prudential on the date Prudential receives notice of the delay in the closing
for such Accepted Note having a maturity date or dates the same as, or closest
to, the Rescheduled Closing Day or Rescheduled Closing Days (a new alternative
investment being selected by Prudential each time such closing is delayed);
"DTS" means Days to Settlement, i.e., the number of actual days elapsed from
and including the original Closing Day with respect to such Accepted Note (in
the case of the first such payment with respect to such Accepted Note) or from
and including the date of the next preceding payment (in the case of any
subsequent delayed delivery fee payment with respect to such Accepted Note) to
but excluding the date of such payment; and "PA" means Principal Amount, i.e.,
the principal amount of the Accepted Note for which such calculation is being
made. In no case shall the Delayed Delivery Fee be less than zero. Nothing
contained herein shall obligate any Purchaser to purchase any Accepted Note on
any day other than the Closing Day for such Accepted Note, as the same may be
rescheduled from time to time in compliance with paragraph 2B(8).
2B(9)(iii). CANCELLATION FEE. If the Partnerships at any time notify
Prudential in writing that the Partnerships are canceling the closing of the
purchase and sale of any Accepted Note, or if Prudential notifies the
Partnerships in writing under the circumstances set forth in the last sentence
of paragraph 2B(6) or the penultimate sentence of paragraph 2B(8) that the
closing of the purchase and sale of such Accepted Note is to be canceled, or if
the closing of the purchase and sale of such Accepted Note is not consummated
on or prior to the last day of the Issuance Period (the date of any such
notification, or the last day of the Issuance Period, as the case may be, being
herein called the "CANCELLATION DATE"), the Partnerships will pay the
Purchasers in immediately available funds an amount (the "CANCELLATION FEE")
calculated as follows:
PI X PA
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where "PI" means Price Increase, i.e., the quotient (expressed in decimals)
obtained by dividing (a) the excess of the ask price (as determined by
Prudential) of the Hedge Treasury Note(s) on the Cancellation Date over the bid
price (as determined by Prudential) of the Hedge Treasury Notes(s) on the
Acceptance Day for such Accepted Note by (b) such bid price; and
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"PA" has the meaning ascribed to it in paragraph 2B(9)(ii). The foregoing bid
and ask prices shall be as reported by Telerate Systems, Inc. (or, if such data
for any reason ceases to be available through Telerate Systems, Inc., any
publicly available source of similar market data). Each price shall be based on
a U.S. Treasury security having a par value of $100.00 and shall be rounded to
the second decimal place. In no case shall the Cancellation Fee be less than
zero.
3. CONDITIONS OF CLOSING. The obligation of any Purchaser to purchase and
pay for any Notes is subject to the satisfaction, on or before the Closing Day
for such Notes, of the following conditions:
3A. CERTAIN DOCUMENTS. Such Purchaser shall have received the following,
each dated the date of the applicable Closing Day:
(i) The Note(s) to be purchased by such Purchaser.
(ii) Copies (certified by the General Partner) of all actions taken
by the Partnerships authorizing the execution and delivery of this
Agreement and the issuance of the Notes, and of all documents evidencing
other necessary corporate action and governmental approvals, if any, with
respect to this Agreement and the Notes.
(iii) Certificates of incumbency and specimen signatures with
respect to the names and true signatures of the officers of the General
Partner who are authorized to sign this Agreement and the Notes and the
other documents to be delivered hereunder.
(iv) Copies of the Certificate of Limited Partnership of each of PFR
and Xxxxxxx (certified as of a recent date by the Secretary of State of
Delaware) and a partnership agreement of each of PFR and Xxxxxxx
(certified by the General Partner) as in effect on the Closing Day.
(v) A favorable opinion of Xxxxxx X. Xxxxxxx, Esq., General Counsel
of the Partnerships and General Partner (or such other counsel designated
by the Company and acceptable to the Purchaser(s)) satisfactory to such
Purchaser and substantially in the form of Exhibit D-1 (in the case of
the Series A Notes) or D-2 (in the case of any Shelf Notes) attached
hereto and as to such other matters as such Purchaser may reasonably
request. The Partnerships hereby direct each such counsel to deliver
such opinion, agrees that the issuance and sale of any Notes will
constitute a reconfirmation of such direction, and understands and agrees
that each Purchaser receiving such an opinion will and is hereby
authorized to rely on such opinion.
(vi) Good standing certificates for the Partnership issued by the
Secretary of State of the States of Delaware, Florida, Iowa, Minnesota,
New York, Ohio, Pennsylvania, Tennessee and Wisconsin dated of a recent
date and such other evidence of the status of the Partnerships as such
Purchaser may reasonably request.
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(vii) Copies of articles of incorporation (certified as of a recent
date by the Secretary of State of Delaware) and by-laws (certified by
Secretary of the General Partners) of the General Partner as in effect on
the Closing Day.
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(viii) Additional documents or certificates with respect to legal
matters or corporate or other proceedings related to the transactions
contemplated hereby as may be reasonably requested by such Purchaser.
3B. REPRESENTATIONS AND WARRANTIES; NO DEFAULT. The representations and
warranties contained in paragraph 8 shall be true on and as of such Closing
Day, except to the extent of changes caused by the transactions herein
contemplated; there shall exist on such Closing Day no Event of Default or
Default; and the Partnerships shall have delivered to such Purchaser an
Officer's Certificate, dated such Closing Day, to both such effects.
3C. PURCHASE PERMITTED BY APPLICABLE LAWS. The purchase of and payment
for the Notes to be purchased by such Purchaser on the terms and conditions
herein provided (including the use of the proceeds of such Notes by the
Partnerships) shall not violate any applicable law or governmental regulation
(including, without limitation, Section 5 of the Securities Act or Regulation
G, T or X of the Board of Governors of the Federal Reserve System) and shall
not subject such Purchaser to any tax, penalty, liability or other onerous
condition under or pursuant to any applicable law or governmental regulation,
and such Purchaser shall have received such certificates or other evidence as
it may request to establish compliance with this condition.
3D. PAYMENT OF FEES. The Partnerships shall have paid to Prudential any
fees due it pursuant to or in connection with this Agreement, including any
Issuance Fee due pursuant to paragraph 2B(8)(i) and any Delayed Delivery Fee
due pursuant to paragraph 2B(8)(ii).
4. PREPAYMENTS. The Series A Notes and any Shelf Notes shall be subject
to required prepayment as and to the extent provided in paragraphs 4A and 4B,
respectively. The Series A Notes and any Shelf Notes shall also be subject to
prepayment under the circumstances set forth in paragraph 4C. Any prepayment
made by the Partnerships pursuant to any other provision of this paragraph 4
shall not reduce or otherwise affect its obligation to make any required
prepayment as specified in paragraph 4A or 4B.
4A. REQUIRED PREPAYMENTS OF SERIES A NOTES. Until the Series A Notes
shall be paid in full, the Partnerships shall apply to the prepayment of the
Series A Notes, without Yield-Maintenance Amount, the sum of $606,060.61 on
December 13, March 13, June 13 and September 13 in each of the years 1997
through 2005 inclusive, and such principal amounts of the Series A Notes,
together with interest thereon to the prepayment dates, shall become due on
such payment dates. The remaining unpaid principal amount of the Series A
Notes, together with interest accrued thereon, shall become due on the maturity
date of the Series A Notes.
4B. REQUIRED PREPAYMENTS OF SHELF NOTES. Each Series of Shelf Notes shall
be subject to required prepayments, if any, set forth in the Notes of such
Series.
4C. OPTIONAL PREPAYMENT WITH YIELD-MAINTENANCE AMOUNT. The Notes shall be
subject to prepayment, in whole at any time or from time to time in part (in
integralmultiples of $100,000 and in a minimum amount of $1,000,000), at
Partnerships, at
18
100% of the principal amount so prepaid plus interest thereon to the prepayment
date and the Yield-Maintenance Amount, if any, with respect to each such Note.
Any partial prepayment of the Notes pursuant to this paragraph 4C shall be
applied in satisfaction of required payments of principal in inverse order of
their scheduled due dates.
4D. NOTICE OF OPTIONAL PREPAYMENT. The Partnerships shall give the holder
of each Note to be prepaid pursuant to paragraph 4C(1) irrevocable written
notice of such prepayment not less than 10 Business Days prior to the
prepayment date, specifying such prepayment date, the aggregate principal
amount of the Notes to be prepaid on such date, the principal amount of the
Notes held by such holder to be prepaid on that date and that such prepayment
is to be made pursuant to paragraph 4C(1). Notice of prepayment having been
given as aforesaid, the principal amount of the Notes specified in such notice,
together with interest thereon to the prepayment date and together with the
Yield-Maintenance Amount, if any, herein provided, shall become due and payable
on such prepayment date. The Partnerships shall, on or before the day on which
it gives written notice of any prepayment pursuant to paragraph 4C(1), give
telephonic notice of the principal amount of the Notes to be prepaid and the
prepayment date to each Significant Holder which shall have designated a
recipient for such notices in the Purchaser Schedule attached hereto or the
applicable Confirmation of Acceptance or by notice in writing to the
Partnerships.
4E. APPLICATION OF PREPAYMENTS. In the case of each prepayment of less
than the entire unpaid principal amount of all outstanding Notes of any Series
pursuant to paragraphs 4A, 4B or 4C, the amount to be prepaid shall be applied
pro rata to all outstanding Notes of such Series (including, for the purpose of
this paragraph 4E only, all Notes prepaid or otherwise retired or purchased or
otherwise acquired by the Partnerships or any of their Subsidiaries or
Affiliates other than by prepayment pursuant to paragraph 4A, 4B or 4C)
according to the respective unpaid principal amounts thereof.
4F. RETIREMENT OF NOTES. The Partnerships shall not, and shall not permit
any of their Affiliates to, prepay or otherwise retire in whole or in part
prior to their stated final maturity (other than by prepayment in accordance
with paragraphs 4A or 4C or upon acceleration of such final maturity pursuant
to paragraph 7A), or purchase or otherwise acquire, directly or indirectly,
Notes of any Series held by any holder unless the Partnerships or such
Affiliates shall have offered to prepay or otherwise retire or purchase or
otherwise acquire, as the case may be, the same proportion of the aggregate
principal amount of the Notes of such Series held by each other holder of such
Notes of such Series at the time outstanding upon the same terms and
conditions. Any Notes so prepaid or otherwise retired or purchased or
otherwise acquired by the Partnerships or any of the Subsidiaries or Affiliates
shall not be deemed to be outstanding for any purpose under this Agreement,
except as provided in paragraph 4E.
5. AFFIRMATIVE COVENANTS.
5A. FINANCIAL STATEMENTS. The Partnerships covenant that they will
deliver to each Significant Holder (but in the case of any Significant Holder
described in clause (ii)of the
19
definition of such term, only such Significant Holder whose name and address
has been furnished to the Partnerships (or either of them) in writing) of any
Notes in triplicate:
(i) as soon as practicable and in any event within forty-five (45) days
after the end of each quarterly period (other than the last quarterly period)
in each fiscal year of PFR, consolidated statements of income, cash flows and
changes in partners' capital of PFR and its Subsidiaries for the period from
the beginning of the current fiscal year to the end of such quarterly period,
and a consolidated balance sheet of PFR and its Subsidiaries as at the end of
such quarterly period, setting forth in each case in comparative form figures
for the corresponding period in the preceding fiscal year, all in reasonable
detail and satisfactory in form to the Required Holder(s) and certified by an
authorized financial officer of the General Partner to be true, correct and
current in all material respects, subject to changes resulting from normal
year-end adjustments; provided, however, that delivery pursuant to clause (v)
below of copies of the Quarterly Report on Form 10-Q of PFR for such quarterly
period filed with the Securities and Exchange Commission shall be deemed to
satisfy the requirements of this clause (i);
(ii) as soon as practicable and in any event within ninety (90) days after
the end of each fiscal year of PFR, consolidating and consolidated statements
of income, cash flows and changes in partners' capital of PFR and its
Subsidiaries for such year, and a consolidating and consolidated balance sheet
of PFR and its Subsidiaries as at the end of such year, setting forth in each
case in comparative form corresponding consolidated figures from the preceding
annual audit, all in reasonable detail and satisfactory in form to the Required
Holder(s) and, as to the consolidated statements, reported on by independent
public accountants of recognized national standing selected by PFR whose report
shall be without limitation as to the scope of the audit and satisfactory in
substance to the Required Holder(s) and, as to the consolidating statements,
certified by an authorized financial officer of the General Partner; provided,
however, that delivery pursuant to clause (v) below of copies of the Annual
Report on Form 10-K of PFR for such fiscal year filed with the Securities and
Exchange Commission shall be deemed to satisfy the requirements of this clause
(ii);
(iii) as soon as practicable and in any event within forty-five (45) days
after the end of each quarterly period in each fiscal year of the General
Partner, statements of income, stockholders' equity and cash flows of the
General Partner for the period from the beginning of the current fiscal year to
the end of such quarterly period, and a balance sheet of the General Partner as
at the end of such quarterly period, setting forth in each case in comparative
form figures for the corresponding period in the preceding fiscal year, all in
reasonable detail and satisfactory in form to the Required Holder(s) and
certified by an authorized financial officer of the General Partner to be true,
correct and current in all material respects, subject to changes resulting from
year-end adjustments;
(iv) to the extent prepared for any fiscal year of the General Partner, as
soon as practicable and in any event within ten (10) days of the receipt by the
General Partner thereof, statements of income, stockholders' equity and cash
flows of the General Partner for such year, and a balance sheet of the General
Partner as at the end of such year, setting forth in each case in comparative
form corresponding figures from the preceding annual audit, all in reasonable
detail
20
and satisfactory in form to the Required Holder(s) and reported on
by independent public accountants of recognized national standing selected by
the General Partner whose report shall be without limitation as to the scope of
the audit and satisfactory in substance to the Required Holder(s);
(v) promptly upon transmission thereof, copies of all such financial
statements, proxy statements, notices and reports (other than information and
reports delivered to the limited partners of the Partnerships, solely in order
that such limited partners shall be able to compute and report their income tax
liabilities resulting from their status as limited partners) as any of the
Partnerships, the Subsidiaries or the General Partner shall send to their
partners or equity holders and copies of all registration statements (without
exhibits) and all reports which any of the Partnerships, the Subsidiaries or
the General Partner files with the Securities and Exchange Commission (or any
governmental body or agency succeeding to the functions of the Securities and
Exchange Commission);
(vi) promptly upon receipt thereof, a copy of each other report submitted
to any of the Partnerships, the Subsidiaries or the General Partner by
independent accountants in connection with any annual, interim or special audit
made by them of the books of such Partnership, Subsidiary or General Partner;
and
(vii) with reasonable promptness, such other financial and other data
(including, without limitation, financial and other data relating to joint
ventures in which any of the Partnerships, the Subsidiaries or the General
Partner, has invested, certified by an authorized financial officer of the
General Partner) as such holder may reasonably request.
Together with each delivery of financial statements required by clauses (i) and
(ii) above, the Partnerships will deliver to each Significant Holder to whom
such financial statements are required to be delivered an Officer's Certificate
demonstrating (with computations in reasonable detail) compliance by the
Partnerships and the Subsidiaries with the provisions of paragraphs 6A, 6B(2)
and 6B(3) and stating that there exists no Event of Default or Default, or, if
any Event of Default or Default exists, specifying the nature and period of
existence thereof and what action the Partnerships have taken, are taking or
propose to take with respect thereto.
Together with each delivery of financial statements required by clause (ii)
above, the Partnerships will deliver to each Significant Holder to whom such
financial statements are required to be delivered a certificate of such
accountants stating that, in making the audit necessary to the certification of
such financial statements, they have obtained no knowledge of any Event of
Default or Default, or, if they have obtained knowledge of any Event of Default
or Default, specifying the nature and period of existence thereof. Such
accountants, however, shall not be liable to anyone by reason of their failure
to obtain knowledge of any Event of Default or Default which would not be
disclosed in the course of an audit conducted in accordance with generally
accepted auditing standards.
Together with each delivery of financial statements required by clause (ii)
above, the Partnerships will deliver to each Significant Holder to whom such
financial statements are
21
required to be delivered an Officer's Certificate specifying the details of the
insurance then in effect and maintained in accordance with paragraph 5E.
The Partnerships also covenant that forthwith upon the chief
executive officer, principal financial officer, principal accounting officer
or any vice-president of the General Partner obtaining actual knowledge of:
(i) an Event of Default or Default;
(ii) a material adverse change in the financial condition, business,
operations or prospects of the Partnerships and the Subsidiaries, taken
as a whole, or of the General Partner;
(iii) the institution of legal proceedings against any of the
Partnerships, the Subsidiaries or the General Partner, which individually
or in the aggregate could reasonably be expected to have a material
adverse effect on the financial condition, business, operations or
prospects of such Partnership, Subsidiary or General Partner or which in
any manner draws into question the validity of or has a reasonable
possibility of impairing the ability of a Partnership to perform its
obligations under this Agreement or the Notes; or
(iv) a default by Xxxxxxx in any of its material obligations under
any Franchise or the filing of a complaint with, or an investigation
(pending, threatened or actual) by, the FTC or any enforcement agency
against Xxxxxxx or PFR pursuant to any state franchise laws, business
opportunity acts or trade practices acts which, individually or in the
aggregate, if determined adversely to Xxxxxxx or PFR, could reasonably be
expected to have a material adverse effect on the financial condition,
business, operations or prospects of Xxxxxxx or PFR;
the Partnerships will deliver to each Significant Holder to whom the financial
statements described in this paragraph 5A are required to be delivered, and
with respect to clause (i), the Partnerships will deliver to each holder of any
Note, an Officer's Certificate specifying the nature and period of existence
thereof and what action the Partnerships have taken, are taking or propose to
take with respect thereto.
5B. INSPECTION OF PROPERTY. Each Partnership covenants that it will
permit any Person designated by any Significant Holder in writing, at such
Significant Holder's expense, to visit and inspect any of the properties of
such Partnership and its Subsidiaries, to examine the books and financial
records of the Partnership and its Subsidiaries and make copies thereof or
extracts therefrom and to discuss the affairs, finances and accounts of any of
such Persons with the principal officers of the General Partner and the
independent public accountants of such Partnership, all at such reasonable
times and as often as such Significant Holder may reasonably request.
22
5C. COVENANT TO SECURE NOTES EQUALLY. Each Partnership covenants
that, if it or any Subsidiary shall create or assume any Lien upon any of its
properties or assets, whether now owned or hereafter acquired, other than
Liens permitted by the provisions of paragraph 6B(l) (unless prior written
consent to the creation or assumption thereof shall have been obtained
pursuant to paragraph 11C), it will make or cause to be made effective
provisionwhereby the Notes will be secured by such Lien equally and ratably
with any and all other Indebtedness thereby secured so long as any such other
Indebtedness shall be so secured.
5D. GUARANTEED OBLIGATIONS. Each Partnership covenants that if, at any
time after the date hereof, it or any of its Subsidiaries incurs or permits to
exist any obligation for borrowed money or for the deferred purchase price of
any property or assets (including Capitalized Lease Obligations) guaranteed or
collateralized in any manner by any Person (other than by a Partnership or a
Subsidiary), it will, unless the principal amount of Indebtedness being so
guaranteed or collateralized, when added to the Indebtedness described in
clauses (a) and (c) of paragraph 6B(2), does not exceed in aggregate principal
amount at any time, 10% of Consolidated Net worth, simultaneously cause such
Person to execute and deliver to each holder of any Note a guaranty agreement
in form and substance satisfactory to such holder guaranteeing payment of the
principal amount of the Notes and any Yield-Maintenance Amount and interest
thereon, which bears the same ratio to the total unpaid principal amount of the
Notes as the amount of such other obligation which is guaranteed bears to the
total unpaid principal amount of such other obligation, or if such other
obligation is collateralized, to collateralize the Notes equally and ratably
with such other obligation. Nothing in this paragraph 5D is intended to permit
a Partnership or a Subsidiary to guaranty or collateralize the obligations of
any other Partnership or Subsidiary unless and to the extent such guaranty or
collateral is expressly permitted by any other provision of this Agreement.
5E. MAINTENANCE OF INSURANCE. Each Partnership covenants that it
and each Subsidiary will maintain, with responsible insurers, insurance with
respect to their respective properties and businesses against such casualties
and contingencies (including, but not limited to, public liability, larceny,
embezzlement or other criminal misappropriation) and in such amounts as is
customary in the case of similarly situated Persons engaged in the same or
similar businesses.
5F. MAINTENANCE OF EXISTENCE/COMPLIANCE WITH LAW/PRESERVATION OF
PROPERTY. Except as allowed under paragraph 6B(4), each Partnership covenants
that it and each Subsidiary will do or cause to be done all things necessary to
preserve, renew and keep in full force and effect their existence and comply in
all respects with all laws and regulations (including, without limitation, (i)
Part 436, Subchapter D, Chapter I, Title 16 of the Code of Federal Regulations
(the "FTC RULE") and all applicable state franchise laws and regulations,
business opportunity acts and trade practices acts, (ii) laws and regulations
relating to equal employment opportunity and employee safety and (iii) laws
relating to the environment) applicable to any of them, the failure with which
to comply could reasonably be expected to have a material adverse effect on the
business, operations or financial condition of the Partnerships and the
Subsidiaries, taken as a whole. Except as expressly permitted by paragraph
6B(4), each Partnership further covenants that it and each Subsidiary will at
all times maintain (and if
23
registered with the United States Patent and Trademark Office and/or with any
state trademark authorities, maintain such registration), preserve and protect
all material intellectual property of such Partnership and Subsidiaries used in
the conduct of their respective businesses, including, without limitation, the
Marks, and preserve all the remainder of their material properties used or
useful in the conduct of their respective businesses and keep the same in good
repair, working order and condition, ordinary wear and tear excepted.
5G. COMPLIANCE WITH FRANCHISES. Xxxxxxx shall keep all of the
Franchises in full force and effect and shall perform all of its obligations
thereunder, except where the termination or cancellation of a Franchise or the
failure to perform its obligations could not reasonably be expected to have,
individually or in the aggregate, a material adverse effect upon its business,
operations, financial condition or prospects.
5H. NO INTEGRATION. Each Partnership covenants that it has taken and
will continue to take all necessary steps on its part to be performed so that
the issuance of the Notes will not require registration under the Securities
Act. Each Partnership covenants that no future offer and sale of debt
securities of such Partnership of any class will be made if, as a result of the
doctrine of "integration", such offer and sale would call into question the
entitlement of the Notes to an exemption from the registration requirements of
the Securities Act.
5I. PAYMENT OF TAXES AND CLAIMS. Each Partnership covenants that it and
each Subsidiary will pay all taxes, assessments and other governmental charges
imposed upon them or any of their respective properties or assets or in respect
of any of their respective franchises, businesses, income or profits before any
penalty or interest accrues thereon, and all claims (including, without
limitation, claims for labor, services, materials and supplies) for sums which
have become a Lien upon any of their respective properties or assets (other
than Liens permitted pursuant to paragraph 6B(l)), provided that no such tax,
assessment, charge or claim need be paid if being contested in good faith by
appropriate proceedings promptly initiated and diligently conducted and if such
reserves or other appropriate provision, if any, as shall be required by
generally accepted accounting principles shall have been made therefor.
6. NEGATIVE COVENANTS. Unless the Required Holder(s) otherwise agree
in writing, neither Partnership shall, nor shall it permit any Subsidiary to,
take any of the following actions or permit the occurrence or existence of any
of the following events or conditions:
6A. COVERAGE REQUIREMENTS. Each Partnership covenants that it will not
permit at any time the Fixed Charge Coverage Ratio of PFR and its Subsidiaries,
on a consolidated basis, to be less than 3.0 to 1.0.
6B. LIENS, DEBT AND OTHER RESTRICTIONS. Each Partnership covenants that
it will not and will not permit any Subsidiary to:
6B(l). LIENS. Create, assume or suffer to exist any Lien upon any of its
properties or assets, whether now owned or hereafter acquired (whether or not
provision is made
24
for the equal and ratable securing of the Notes in accordance with the
provisions of paragraph 5C), except:
(i) Liens for taxes (including ad valorem and property taxes),
assessments and other governmental charges or levies (excluding any Lien
imposed pursuant to any of the provisions of ERISA) if payment is not yet due
or such Liens are being actively contested in good faith by appropriate
proceedings, or the claims of materialmen, mechanics, carriers, warehousemen or
landlords for labor, materials, supplies or rentals incurred in the ordinary
course of business securing obligations not yet due and payable or which are
being actively contested in good faith by appropriate proceedings, and all such
Liens described in this clause (i), in the aggregate, do not materially
detract from the value of its properties or assets or impair the use thereof
in the operation of its business;
(ii) other Liens incidental to the conduct of its business or the
ownership of its properties and assets including, without limitation, pledges
or deposits in connection with workers' compensation and social security taxes,
assessments and charges or to secure (or to obtain letters of credit that
secure) the performance of tenders, statutory obligations, surety and appeal
bonds, bids, performance bonds, purchase, construction or sales contracts and
other similar obligations, provided that such Liens were not incurred in
connection with the borrowing of money or the obtaining of advances or credit
and do not, in the aggregate materially detract from the value of its
properties or assets or impair the use thereof in the operation of its
business;
(iii) such minor defects, irregularities, encumbrances, easements, rights
of way, zoning restrictions, variations from building laws and clouds on title
as normally exist with respect to similar properties which do not materially
impair the property affected thereby for the purpose for which it was acquired;
(iv) leases and subleases of property to others entered into in the
ordinary course of business or existing on property acquired in the ordinary
course of business;
(v) Liens on property owned by either of the Partnerships or any
Subsidiary constituting leasehold improvements on real estate not owned by such
Partnership or Subsidiary to the extent such property is affixed to the real
estate in such a manner as to be subjected to liens on the real estate to which
it is affixed;
(vi) provisions subordinating the interest of either of the Partnerships
or any Subsidiary, as a lessee, to an underlying lease or to a security
interest in the leased property granted or to be granted by the lessor; and
(vii) other Liens on the respective properties and assets of the
Partnerships and the Subsidiaries (excluding, however, any intercompany Liens
and any Lien on the limited partnership interest of PFR in Xxxxxxx) securing
Indebtedness of the Partnerships and the Subsidiaries which, together with
Indebtedness permitted by clauses (a) and (b) of paragraph 6B(2), does not
exceed in aggregate principal amount at any time, 10% of Consolidated Net
Worth.
25
6B(2). INDEBTEDNESS. Permit at any time the ratio of Indebtedness of PFR
and its Subsidiaries, on a consolidated basis, to Tangible Net Worth, to be
greater than 2.75 to 1.0. Notwithstanding the foregoing, no Restricted
Subsidiary may create, incur, assume or suffer to exist any Funded Debt, except
that a Restricted Subsidiary may create, incur, assume or suffer to exist
Funded Debt if permitted by the immediately preceding sentence and to the
extent the sum of
(a) such Funded Debt of a Restricted Subsidiary plus
(b) that portion of any Indebtedness of the Partnerships and the
Subsidiaries of the type described in paragraph 5D which is collateralized or
guaranteed in any manner by a Person other than a Partnership or Subsidiary, to
the extent the Notes are not also collateralized or guaranteed by such Person
as required by paragraph 5D (without giving effect to the exception in
paragraph 5D for third party guarantees and collateral that are permitted
without a corresponding guaranty or collateralization of the Notes), plus
(c) Indebtedness secured by Xxxxx permitted by paragraph 6B(l)(vii),
does not exceed in aggregate principal amount at any time, 10% of Consolidated
Net Worth.
6B(3). LOANS, ADVANCES, INVESTMENTS AND CONTINGENT LIABILITIES. Make or
permit to remain outstanding any Investment to, any Person, except that each
Partnership and each Subsidiary may:
(i) make or permit to remain outstanding loans or advances to any other
Partnership or Subsidiary (other than loans or advances by a Restricted
Subsidiary to a Partnership);
(ii) acquire and own stock, obligations or securities received in
settlement of debts (created in the ordinary course of business) owing to such
Partnership or Subsidiary;
(iii) own, purchase or acquire stock, obligations or securities or other
equity interests of a Subsidiary (except that no Subsidiary may own, purchase
or acquire stock, obligations or securities or other equity interests of
Xxxxxxx)or of a Person which immediately after such purchase or acquisition
will be a Subsidiary;
(iv) own, purchase or acquire prime commercial paper (rated A-1 or better
by Standard & Poor's Corporation or P-1 or better by Xxxxx'x Investors Service,
Inc.) and certificates of deposit in United States commercial banks (having
capital reserves in excess of $100,000,000), in each case due within one (1)
year from the date of purchase and payable in the United States in United
States dollars, direct obligations of the United States Government or any
agency thereof, and obligations guaranteed by the United States Government, and
repurchase agreements of such banks for terms of less than one (1) year in
respect of the foregoing certificates and obligations;
26
(v) make loans or advances to its employees in the ordinary course of
business and consistent with the practices of the Partnerships existing on the
Date of Closing for relocation, travel, investment in the Restricted Unit Plan
and other business expenses;
(vi) in the case of Xxxxxxx, make Investments in or to Franchisees;
(vii) in the case of the Partnerships, make or permit to remain
outstanding Guarantees by the Partnerships to the extent the Partnerships are
and continue to be in compliance with the debt to worth ratio set forth in
paragraph 6B(2); and
(viii) make any Investments other than Guarantees in or to any Person not
otherwise enumerated in clauses (i)-(vii) above in an aggregate amount for the
Partnerships and the Subsidiaries not to exceed $1,000,000 at any time
outstanding.
Notwithstanding the foregoing exceptions to the prohibition against
Investments, the Partnerships shall not at any time permit the aggregate amount
of Investments of the Partnerships and the Subsidiaries (excluding Guarantees
permitted by clause (vii) above), on a consolidated basis, to exceed 15% of
Tangible Gross Worth.
6B(4). CONSOLIDATION, MERGER AND SALE OF ASSETS. Merge, consolidate or
exchange shares (for cash, securities or other property) with any other Person
or sell, lease or transfer or otherwise dispose of all or a substantial part of
its assets (i.e., assets which, together with all Allocated Assets of
Restricted Subsidiaries and all other assets of the Partnerships and
Subsidiaries sold, leased, transferred or otherwise disposed of (other than in
the ordinary course of business) from and after the date of this Agreement,
constitute more than 10% of the consolidated assets of PFR and its
Subsidiaries, or assets which, together with all Allocated Assets of Restricted
Subsidiaries, shall have contributed more than 10% of Consolidated Net Earnings
for any of the three (3) fiscal years then most recently ended) to any Person
except that
(i) PFR and Xxxxxxx may merge with or into one another and may sell,
lease, transfer or otherwise dispose of their assets to one another;
(ii) any Restricted Subsidiary may merge with PFR or Xxxxxxx (provided
PFR or Xxxxxxx shall be the continuing or surviving Person), or any Restricted
Subsidiary may merge with or into any one or more other Restricted
Subsidiaries;
(iii) any Restricted Subsidiary may sell, lease, transfer or otherwise
dispose of any of its assets to PFR or Xxxxxxx, or any Restricted Subsidiary
may sell, lease, transfer or otherwise dispose of any of its assets to another
Restricted Subsidiary;
(iv) PFR and/or Xxxxxxx may merge or consolidate with any other Person,
provided that (a) PFR or Xxxxxxx, as applicable, shall be the continuing or
surviving Person and (b) PFR or Xxxxxxx, as applicable, as the continuing or
surviving Person shall not, immediately after such merger or consolidation, be
in default under this Agreement or on the Notes, including all covenants herein
and therein contained;
27
(v) any Restricted Subsidiary may merge or consolidate with any other
Person, provided that, immediately after giving effect to such merger or
consolidation (a) the continuing or surviving Person of such merger or
consolidation shall constitute a Restricted Subsidiary, and (b) no Event of
Default or Default shall exist; and
(vi) the Partnerships and Subsidiaries may effect a reorganization
(through merger, consolidation, exchange of shares and/or sale of assets and
whether or not any Partnership or Subsidiary shall be the surviving Person) in
conjunction with the application of Section 7704 of the Code to PFR; provided,
however., that such reorganization, in the good faith judgment of the Required
Holders, shall not adversely affect the holders of the Notes, andprovided,
further, that the Partnerships (or the surviving entity of any such
reorganization) shall enter into an amended and restated note facility
agreement with the holders of the Notes in form and substance satisfactory to
such holders but without change to the maturity date of any Note, the principal
amount of, or the rate or time of payment of interest or premium payable on,
any Note, or the time, amount or allocation of any required prepayments of the
Notes.
For purposes of this Agreement, the term "ALLOCATED ASSETS" shall mean, with
respect to any Restricted Subsidiary, those assets of such Restricted
Subsidiary underlying the equity interest of such Restricted Subsidiary being
issued, sold or otherwise disposed of (directly or indirectly) by such
Restricted Subsidiary. The value of the Allocated Assets of a Restricted
Subsidiary shall be determined by multiplying (a) the percentage dilution of
the ownership interest of the Partnerships in such Restricted Subsidiary
resulting from such Restricted Subsidiary's direct or indirect issuance, sale
or other disposition of its equity, times (b) the book value of the assets of
such Restricted Subsidiary as of the date of such issuance, sale or other
disposition of equity. Allocated Assets of a Restricted Subsidiary shall not
be deemed to be sold, leased, transferred or otherwise disposed of in the
ordinary course of business unless the corresponding equity interest of such
Restricted Subsidiary is issued, sold or otherwise disposed of to the
Partnerships or another Restricted Subsidiary.
The percentage of net earnings of a Restricted Subsidiary to which the
Allocated Assets of such Restricted Subsidiary shall have contributed shall be
determined by multiplying (a) the percentage dilution of the ownership interest
of the Partnerships in such Restricted Subsidiary resulting from such
Restricted Subsidiary's direct or indirect issuance, sale or other disposition
of its equity, times (b) the net earnings of such Restricted Subsidiary for the
fiscal year of such Restricted Subsidiary then being measured (i.e., each of
the three (3) fiscal years then most recently ended, measured separately). The
"net earnings" of a Restricted Subsidiary shall be determined in accordance
with generally accepted accounting principles.
For purposes of this paragraph 6B(4), the term "PERCENTAGE DILUTION" shall
mean the difference (expressed in a percentage) between the ownership interest
of the Partnerships in a Restricted Subsidiary immediately prior to and after
such Restricted Subsidiary's direct or indirect issuance, sale or other
disposition of its equity.
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6B(5). TRANSACTIONS WITH RELATED PARTY. Engage, directly or indirectly,
in any transaction or series of related transactions (including, without
limitation, the purchase, sale or exchange of assets or the rendering of any
service) in which the payment of money, receipt of other consideration or fair
market value of the assets involved, exceeds $10,000, with any Affiliate of any
of the Partnerships, the Subsidiaries or the General Partner, except in the
ordinary course of and pursuant to the reasonable requirements of such
Partnership's or such Subsidiary's business and upon fair and reasonable terms
that are no less favorable to such Partnership or such Subsidiary (as
determined by a special committee of the Board of Directors of the General
Partner in good faith), as the case may be, than those which might be obtained
in an arm's length transaction at the time from Persons which are not such an
Affiliate; provided, however, that for purposes of this paragraph 6B(5), PFR
and Xxxxxxx shall not be deemed to be Affiliates of one another.
6B(6). SALE OR DISCOUNT OF RECEIVABLES. Pledge, sell with recourse, or
discount or otherwise sell for less than the face value thereof, any of its
notes or accounts receivable, except that it may sell with recourse notes and
accounts receivable provided the face amount of all notes and accounts
receivable of the Partnerships and the Subsidiaries sold with recourse during
any fiscal year of the Partnerships shall not exceed an aggregate of $50,000.
6B(7). SALE AND LEASEBACK. Enter into any arrangement with any lender or
investor or to which such lender or investor is a party providing for the
leasing by such Partnership or Subsidiary of real or personal property which
has been or is to be sold or transferred by such Partnership or Subsidiary to
such lender or investor or to any Person to whom funds have been or are to be
advanced by such lender or investor on the security of such property or rental
obligations of such Partnership or Subsidiary, except that this paragraph 6B(7)
shall not be deemed to prohibit the sale or transfer and contemporaneous
leasing by such Partnership or Subsidiary of real property made within 180 days
after the completion of construction of improvements thereon.
6C. ERISA. Each Partnership covenants that neither it, the
Subsidiaries, the General Partner nor any ERISA Affiliate will:
(i) terminate or withdraw from any Plan so as to result in any liability
of such Partnership, Subsidiary or General Partner in an amount, individually
or in the aggregate, in excess of $1,000,000 to the Pension Benefit Guaranty
Corporation;
(ii) engage in or permit any Person to engage in any prohibited
transaction (as defined in Section 4975 of the Code) involving any Plan (other
than a Multiemployer Plan) which would subject such Partnership, Subsidiary or
General Partner to any tax, penalty or other liability in an amount,
individually or in the aggregate, in excess of $1,000,000; or
(iii) incur or suffer to exist any accumulated funding deficiency (as
defined in section 302 of ERISA and section 412 of the Code), whether or not
waived, involving any Plan (other than a Multiemployer Plan) in an amount,
individually or in the aggregate, in excess of $1,000,000.
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6D. FED REGULATIONS, ETC. Each Partnership covenants that it will not,
and will not permit any Subsidiary or any agent acting on behalf of such
Partnership or Subsidiary, to take any action which might cause this Agreement
or the Notes to violate Regulation G, Regulation T or any other regulation of
the Board of Governors of the Federal Reserve System or to violate the Exchange
Act, in each case as in effect now or as the same may hereafter be in effect.
6E. ENVIRONMENTAL MATTERS. Each Partnership covenants that it will
not, and will not permit any Third Party to, use, produce, manufacture, process,
generate, store, dispose of, manage at, or ship or transport to or from the
Properties any Hazardous Materials except for Hazardous materials used,
produced, manufactured, processed, generated, stored, disposed of, released or
managed in the ordinary course of business in compliance with all applicable
Environmental Requirements (except where failure to comply could not
reasonablybe expected to have a material adverse effect on the business,
operations or financial condition of PFR and its Subsidiaries, taken as a
whole).
6F. ISSUANCE OF SUBSIDIARY EQUITY. Each Partnership covenants that it
will not permit any Restricted Subsidiary to issue, sell or otherwise dispose
of any equity interest of such Restricted Subsidiary (either directly or
indirectly) except to the Partnerships or another Restricted Subsidiary or
unless the Allocated Assets of such Restricted Subsidiary could be sold
pursuant to paragraph 6B(4).
7. EVENTS OF DEFAULT.
7A. ACCELERATION. If any of the following events shall occur for any
reason whatsoever (and whether such occurrence shall be voluntary or
involuntary or come about or be effected by operation of law or otherwise) and
be continuing:
(i) the Partnerships (or either of them) default in the payment of any
principal or Yield-Maintenance Amount when the same shall become due, either by
the terms thereof or otherwise as herein provided; or the Partnerships (or
either of them) default in the payment of any interest on any Note for more
than five (5) Business Days after the date due; or
(ii) the Partnerships (or either of them) default in the payment of any
interest on any Note for more than (5) Business days after the date due; or
(iii) any of the Partnerships, the Subsidiaries or the General Partner
defaults in any payment of principal of or interest on any other obligation for
money borrowed (or any Capitalized Lease Obligation, any obligation under a
conditional sale or other title retention agreement, any obligation issued or
assumed as full or partial payment for property whether or not secured by a
purchase money mortgage or any obligation under notes payable or drafts
accepted representing extensions of credit) beyond any period of grace provided
with respect thereto, or any of the Partnerships, the Subsidiaries or the
General Partner fails to perform or observe any other agreement, term or
condition contained in any agreement under which any
30
such obligation is created (or if any other event thereunder or under any such
agreement shall occur and be continuing) and the effect of such failure or
other event is to cause, or to permit the holder or holders of such obligation
(or a trustee on behalf of such holder or holders) to cause, such obligation to
be accelerated, defeased, purchased or redeemed prior to any stated maturity;
provided, however, that the aggregate amount of all such obligations subject to
such acceleration, purchase or redemption exceeds $10,000,000; or
(iv) any representation or warranty made by or on behalf of the
Partnerships (or either of them) herein or in any writing furnished in
connection with or pursuant to this Agreement shall be false in any material
respect on the date as of which made or deemed made; or
(v) the Partnerships (or either of them) fail to perform or observe any
agreement, term or condition contained in paragraph 6; or
(vi) the Partnerships (or either of them) fail to perform or observe any
other agreement, term or condition contained herein and such failure shall not
be remedied within thirty (30) days after either Partnership or the General
Partner first obtains knowledge of such failure; or
(vii) any of the Partnerships, the Subsidiaries or the General Partner
makes an assignment for the benefit of creditors or is generally not paying its
debt as such debt becomes due; or
(viii) any of the Partnerships, the Subsidiaries or the General Partner
makes an assignment for the benefit of creditors or is generally not paying its
debts as such debts become due; or any decree or order for relief in respect of
any of the Partnerships, the Subsidiaries or the General Partner is entered
under any bankruptcy, reorganization, compromise, arrangement, insolvency,
readjustment of debt, dissolution or liquidation or similar law, whether now or
hereafter in effect (herein called the "BANKRUPTCY LAW"), of any jurisdiction;
or
(ix) any of the Partnerships, the Subsidiaries or the General Partner
petitions or applies to any tribunal for, or consents to, the appointment of,
or taking possession by, a trustee, receiver, custodian, liquidator or similar
official of such Partnership, Subsidiary or General Partner, or of any
substantial part of the assets of such Partnership, Subsidiary or General
Partner, or commences a voluntary case under the Bankruptcy Law of the United
States or any proceedings (other than proceedings for the voluntary liquidation
and dissolution of a Restricted Subsidiary as permitted in clause (xi) below)
relating to such Partnership, Subsidiary or General Partner under the
Bankruptcy Law of any other jurisdiction; or
(x) any such petition or application (referred to in clause (ix) above)
is filed, or any such proceedings are commenced, against any of the
Partnerships, the Subsidiaries or the General Partner and such Partnership,
Subsidiary or General Partner by any act indicates its approval thereof,
consent thereto or acquiescence therein, or an order, judgment or decree is
entered appointing any such trustee, receiver, custodian, liquidator or
similar official, or
31
approving the petition in any such proceedings, and such order, judgment or
decree remains unstayed and in effect for more than thirty (30) days; or
(xi) any event, action or inaction occurs (other than a reorganization
permitted by paragraph 6B(4)(vi)) which results or could reasonably be expected
to result in the dissolution of any of the Partnerships, the Subsidiaries or
the General Partner under or pursuant to the partnership agreement or other
governing document of such Partnership, Subsidiary or General Partner, by
operation of law, or otherwise; provided, however, that the voluntary
dissolution of a Restricted Subsidiary whose assets, immediately prior to the
dissolution, constituted less than 5% of the consolidated assets of PFR and its
Subsidiaries, and for each of the three (3) fiscal years immediately preceding
the date of dissolution, contributed less than 5% of Consolidated Net Earnings,
shall not constitute an Event of Default hereunder; or
(xii) any order, judgment or decree is entered in any proceedings against
any of the Partnerships, the Subsidiaries or the General Partner decreeing a
split-up of suchPartnership, Subsidiary or General Partner which requires the
divestiture of assets representing a substantial part, or the divestiture of
the stock or equity of a Subsidiary whose assets represent a substantial part,
of the consolidated assets of PFR and its Subsidiaries (determined in
accordance with generally accepted accounting principles) or which requires the
divestiture of assets, or stock or equity of a Subsidiary, which shall have
contributed a substantial part of the consolidated net income of PFR and its
Subsidiaries (determined in accordance with generally accepted accounting
principles) for the fiscal year then most recently ended, and such order,
judgment or decree remains unstayed and in effect for more than sixty (60)
days; or
(xiii) a final judgment in an amount in excess of $1,000,000 is rendered
against any of the Partnerships, the Subsidiaries or the General Partner
(excluding a judgment for which an independent insurance carrier has
acknowledged and advised such Partnership, Subsidiary or General Partner, as
applicable, in writing that such judgment is within the limits of and fully
covered by the insurance policy of such Partnership, Subsidiary or General
Partner, as applicable, and said judgment is being duly administered or
defended by said insurer under such policy without reservation of rights) and,
within sixty (60) days after entry thereof, such judgment is not discharged or
execution thereof stayed pending appeal, or within sixty (60) days after the
expiration of any such stay, such judgment is not discharged;
(xiv) (a) the Partnerships (or either of them), the General Partner or any
other Person who is a member of the Partnerships' or the General Partner's
"controlled group" (as such term is defined under section 4001(a)(14)(A) of
ERISA) fails to make all or any portion of a required installment payment under
section 302(e) of ERISA with respect to any Plan (other than a Multiemployer
Plan), (b) the aggregate unpaid balance of such installment together with the
unpaid balance of all prior installments and other payments due under section
302 of ERISA with respect to such Plan (including any accrued interest on such
amounts) exceeds $1,000,000, and (c) such amounts remain unpaid for more than
thirty (30) days after the due date of the installment referred to in clause
(a); or
32
(xv) the Partnerships (or either of them), the General Partner or any
other Person who is a member of the Partnerships' or the General Partner's
"controlled group" (as defined under section 4001(a)(14)(A) of ERISA) shall
have made a complete or partial withdrawal from a Multiemployer Plan pursuant
to which it incurs a withdrawal liability pursuant to section 4201 of ERISA in
an amount exceeding $1,000,000; or
(xvi) the General Partner shall create, assume or suffer to exist any Lien
upon its equity interest in either Partnership except to a Person who may
become a General Partner without triggering an Event of Default under clause
(xvii) below; or
(xvii) The Restaurant Company or any successor corporation permitted by
paragraph 6B(4)(vi) shall cease to own and control or be the beneficial owner
of and control, directly or indirectly, 100% of the issued and outstanding
Voting Stock of the General Partner;
then (a) if such event is an Event of Default specified in clause (i) or (ii)
of this paragraph 7A, any holder of any Note may at its option during the
continuance of such Event of Default, by notice in writing to the Partnerships,
declare all of the Notes held by such holder to be, and allof the Notes held by
such holder shall thereupon be and become, immediately due and payable at par
together with interest accrued thereon, without presentment, demand, protest or
notice of any kind, all of which are hereby waived by the Partnerships, (b) if
such event is an Event of Default specified in clause (viii), (ix) or (x) of
this paragraph 7A with respect to the Partnerships, all of the Notes at the
time outstanding shall automatically become immediately due and payable
together with interest accrued thereon and together with the Yield-Maintenance
Amount, if any, with respect to each Note, without presentment, demand, protest
or notice of any kind, all of which are hereby waived by the Partnerships, and
(c) with respect to any event constituting an Event of Default, the Required
Holder(s) of the Notes of any Series may at its or their option during the
continuance of such Event of Default, by notice in writing to the Partnerships,
declare all of the Notes of such Series to be, and all of the Notes of such
Series shall thereupon be and become, immediately due and payable together with
interest accrued thereon and together with the Yield-Maintenance Amount, if
any, with respect to each Note of such Series, without presentment, demand,
protest or notice of any kind, all of which are hereby waived by the
Partnerships.
7B. RESCISSION OF ACCELERATION. At any time after any or all of the
Notes of any Series shall have been declared immediately due and payable
pursuant to paragraph 7A, the Required Holder(s) of the Notes of such Series
may, by notice in writing to the Partnerships, rescind and annul such
declaration and its consequences if (i) the Partnerships shall have paid all
overdue interest on the Notes of such Series, the principal of and
Yield-Maintenance Amount, if any, payable with respect to any Notes of such
Series which have become due otherwise than by reason of such declaration, and
interest on such overdue interest and overdue principal and Yield-Maintenance
Amount at the rate specified in the Notes of such Series, (ii) the Partnerships
shall not have paid any amounts which have become due solely by reason of such
declaration, (iii) all Events of Default and Defaults, other than non-payment
of amounts which have become due solely by reason of such declaration, shall
have been cured or waived pursuant to paragraph 11C, and (iv) no judgment or
decree shall have been entered for the payment of any amounts due
33
pursuant to the Notes of such Series or this Agreement. No such rescission or
annulment shall extend to or affect any subsequent Event of Default or Default
or impair any right arising therefrom.
7C. NOTICE OF ACCELERATION OR RESCISSION. Whenever any Note shall be
declared immediately due and payable pursuant to paragraph 7A or any such
declaration shall be rescinded and annulled pursuant to paragraph 7B, the
Partnerships shall forthwith give written notice thereof to the holder of each
Note of each Series at the time outstanding.
7D. OTHER REMEDIES. If any Event of Default or Default shall occur and be
continuing, the holder of any Note may proceed to protect and enforce its
rights under this Agreement and such Note by exercising such remedies as are
available to such holder in respect thereof under applicable law, either by
suit in equity or by action at law, or both, whether for specific performance
of any covenant or other agreement contained in this Agreement or in aid of the
exercise of any power granted in this Agreement. No remedy conferred in this
Agreement upon the holder of any Note is intended to be exclusive of any other
remedy, and each and every such remedy shall be cumulative and shall be in
addition to every other remedy conferred herein or now or hereafter existing at
law or in equity or by statute or otherwise.
8. REPRESENTATIONS, COVENANTS AND WARRANTIES. The Partnerships represent,
covenant and warrant:
8A. ORGANIZATION AND OWNERSHIP.
(i) Each Partnership is a limited partnership duly organized and existing
in good standing under the laws of the State of Delaware, each Subsidiary is a
corporation or partnership duly organized and existing in good standing under
the laws of the jurisdiction in which it is organized, and each Partnership has
the partnership power and each Subsidiary has the corporate or partnership
power, as applicable, to own its properties and to carry on its business as now
being conducted and is duly qualified and authorized to do business and is in
good standing in each jurisdiction in which the character of its properties or
the nature of its business requires such qualification or authorization and
where the failure to be so qualified or authorized or to be in good standing
could not reasonably be expected to have a material adverse effect on its
financial condition, business, operations or prospects.
(ii) The General Partner is the sole general partner of each Partnership.
The General Partner is a corporation duly organized and existing in good
standing under the laws of the jurisdiction in which it is incorporated and is
duly qualified and authorized to do business as a foreign corporation and is in
good standing in each jurisdiction in which the character of its properties or
the nature of its business requires such qualification or authorization and
where the failure to be so qualified or authorized or to be in good standing
could not reasonably be expected to have a material adverse effect on its
financial condition, business, operations or prospects. The General Partner
has the corporate power to own its properties and to carry on its business as
now being conducted and is duly authorized and empowered to execute and deliver
this Agreement and the Notes on behalf of the Partnerships and to bind the
Partnerships thereby.
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(iii) Each Partnership is duly authorized and empowered to make, enter
into and perform under this Agreement and the Notes and has taken all necessary
and appropriate partnership action to authorize the execution, delivery and
performance of this Agreement and the issuance of the Notes.
(iv) The General Partner owns a one percent (1%) equity interest, as a
general partner, in each of the Partnerships; PFR owns the remaining 99% equity
interest in Perkins; Xxxxxxx Restaurants, Inc. owns a 48.1% equity interest in
PFR, the public owns a 49.8% equity interest in PFR, and PFR holds the
remaining 2.1% equity interest in PFR as "restricted Units" for redistribution
through PFR's Restricted Unit Plan to officers and key employees of the General
Partner, Xxxxxxx Restaurants, Inc. and their Affiliates and to certain members
of the board of directors of the General Partner or otherwise to the public;
Xxxxxxx Restaurants, Inc. owns 100% of the issued and outstanding capital stock
of the General Partner; and The Restaurant Company owns 100% of the issued and
outstanding capital stock of Xxxxxxx Restaurants, Inc.
8B. FINANCIAL STATEMENTS. The Partnerships have furnished to you the
following financial statements, identified by a principal financial officer of
the General Partner: (i) a consolidated balance sheet of PFR and its
Subsidiaries as at December 31 in eachof the five (5) fiscal years of PFR most
recently completed prior to the date as of which this representation is made or
repeated (other than fiscal years completed within ninety (90) days prior to
such date for which audited financial statements have not been released) and a
consolidated statement of income, statement of cash flows and statement of
changes in partners' capital of PFR and its Subsidiaries for each such year,
all certified by Xxxxxx Xxxxxxxx & Co.; and (ii) consolidated balance sheets of
PFR and its Subsidiaries as at the end of the quarterly period (if any) most
recently completed prior to such date and after the end of such fiscal year
(other than quarterly periods completed within forty-five (45) days prior to
such date for which financial statements have not been released) and the
comparable quarterly period in the preceding fiscal year and consolidated
statements of income, statements of cash flows and statements of changes in
partners' capital for the periods from the beginning of the fiscal years in
which such quarterly periods are included to the end of such quarterly periods,
prepared by the General Partner. Such financial statements (including any
related schedules and/or notes) are true and correct in all material respects
(subject, as to interim statements, to changes resulting from audits and normal
year-end adjustments), have been prepared in accordance with generally accepted
accounting principles consistently followed throughout the periods involved and
show all liabilities, direct and contingent, of PFR and its Subsidiaries
required to be shown in accordance with such principles. The balance sheets
fairly present the condition of PFR and its Subsidiaries as at the dates
thereof, and the statements of income, cash flows and changes in partners'
capital fairly present the results of the operations and the partners' capital
of PFR and its Subsidiaries for the periods indicated. There has been no
material adverse change in the business, financial condition, operations or
prospects of PFR and its Subsidiaries, taken as a whole, since the end of the
most recent fiscal year for which such audited financial statements have been
furnished.
35
8C. ACTIONS PENDING. There is no action, suit, investigation or
proceeding pending or, to the knowledge of either Partnership, threatened,
against either Partnership or any Subsidiary or the General Partner, or any
properties or rights of either Partnership or any Subsidiary or the General
Partner, by or before any court, arbitrator or administrative or governmental
body which could reasonably be expected to have a material adverse effect on
the business, financial condition, operations or prospects of PFR and its
Subsidiaries, taken as a whole.
8D. OUTSTANDING DEBT. No Partnership or Subsidiary has outstanding any
Indebtedness except in compliance with paragraph 6B(2). No Partnership or
Subsidiary is in default under the provisions of any instrument evidencing any
obligation for borrowed money or for the deferred purchase price of any
property or assets (including any Capitalized Lease Obligations) or other
material Indebtedness or of any agreement relating thereto.
8E. TITLE TO PROPERTIES. Each Partnership and each Subsidiary has good
and marketable fee title to its respective real properties and good title to
all of its other respective properties and assets, including the properties and
assets reflected in the most recent audited balance sheet referred to in
paragraph 8B (other than properties and assets disposed of in the ordinary
course of business), subject to no Lien of any kind except Liens permitted by
paragraph 6B(l). All leases necessary in any material respect for the conduct
of the respective businesses of the Partnerships and the Subsidiaries are valid
and subsisting and are in full force and effect.
8F. TAXES. Each Partnership and each Subsidiary has filed all federal,
state, local and foreign income tax returns which, to the knowledge of the
officers of the General Partner, are required to be filed, and each has paid
all taxes as shown on such returns and on all assessments received by it to the
extent that such taxes have become due, except such taxes and assessments as
are being contested in good faith by appropriate proceedings for which adequate
reserves have been established in accordance with generally accepted accounting
principles.
8G. CONFLICTING AGREEMENTS AND OTHER MATTERS. No Partnership or
Subsidiary is a party to any contract or agreement or subject to any governing
document or other partnership or corporate restriction which materially and
adversely affects its operations, business, property or assets, or financial
condition. Neither the execution nor delivery of this Agreement or the Notes,
nor the offering, issuance and sale of the Notes, nor fulfillment of nor
compliance with the terms and provisions hereof and of the Notes will conflict
with, or result in a breach of the terms, conditions or provisions of, or
constitute a default under, or result in any violation of, or result in the
creation of any Lien upon any of the properties or assets of either Partnership
or any Subsidiary pursuant to, the partnership agreement or certificate of
partnership of either Partnership or the charter or by-laws or the partnership
agreement or certificate of partnership, as applicable, of any Subsidiary, any
award of any arbitrator or any agreement (including any agreement with partners
or stockholders), instrument, order, judgment, decree, statute, law, rule or
regulation to which either Partnership or any Subsidiary is subject. Neither
Partnership is a party to, or otherwise subject to any provision contained in,
any instrument evidencing Indebtedness of such Partnership, any agreement
relating thereto or any other contract or agreement (including its partnership
agreement) which limits the amount of, or otherwise
36
imposes restrictions on the incurring of, Indebtedness of such Partnership of
the type to be evidenced by the Notes except as set forth in the agreements
listed in Exhibit H attached hereto.
8H. OFFERING OF NOTES. Neither Partnership or any agent acting on its
behalf has, directly or indirectly, offered the Notes or any similar security
of such Partnership for sale to, or solicited any offers to buy the Notes or
any similar security of such Partnership from, or otherwise approached or
negotiated with respect thereto with, any Person other than institutional
investors, and neither Partnership or any agent acting on its behalf has taken
any action which would subject the issuance or sale of the Notes to the
provisions of Section 5 of the Securities Act or to the provisions of any
securities or Blue Sky law of any applicable jurisdiction.
8I. REGULATION G, ETC. None of the proceeds of the sale of any Notes will
be used, directly or indirectly, for the purpose, whether immediate, incidental
or ultimate, of purchasing or carrying any "margin stock" as defined in
Regulation G (12 CFR Part 207) of the Board of Governors of the Federal Reserve
System (herein called "margin stock") or for the purpose of maintaining,
reducing or retiring any indebtedness which was originally incurred to purchase
or carry any stock that is currently a margin stock or for any other purpose
which might constitute the purchase of such Notes a "purpose credit" within the
meaning of such Regulation G. Neither Partnership or any agent acting on its
behalf has taken or will take any action which might cause this Agreement or
the Notes to violate Regulation G, Regulation T or any other regulation of the
Board of Governors of the Federal ReserveSystem or to violate the Exchange Act,
in each case as in effect now or as the same may hereafter be in effect.
8J. ERISA. No accumulated funding deficiency (as defined in section 302
of ERISA and section 412 of the Code), whether or not waived, exists with
respect to any Plan (other than a Multiemployer Plan). No liability to the
Pension Benefit Guaranty Corporation has been or is expected by either
Partnership to be incurred with respect to any Plan (other than a Multiemployer
Plan) by such Partnership, any Subsidiary, the General Partner or any ERISA
Affiliate which is or could reasonably be expected to be materially adverse to
the business, financial condition, operations or prospects of PFR and its
Subsidiaries, taken as a whole, or to the business, financial condition,
operations or prospects of the General Partner. None of the Partnerships, the
Subsidiaries, the General Partner or any ERISA Affiliate have incurred or
presently expect to incur any withdrawal liability under Title IV of ERISA with
respect to any Multiemployer Plan which is or could reasonably be expected to
be materially adverse to the business, financial condition, operations or
prospects of PFR and its Subsidiaries, taken as a whole, or to the business,
financial condition, operations or prospects of the General Partner. The
execution and delivery of this Agreement and the issuance and sale of the Notes
are not transactions which are subject to the prohibitions of section 406 of
ERISA or in connection with which a penalty could be imposed under Section
502(i) of ERISA or a tax could be imposed pursuant to section 4975 of the Code.
The representations by the Partnerships in the immediately preceding sentence
are made in reliance upon and subject to the accuracy of the Purchaser's
representation in paragraph 9 as to the source of funds to be used to pay the
purchase price of the Notes.
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8K. GOVERNMENTAL CONSENT. Neither the nature of any of the Partnerships
or Subsidiaries, nor any of their respective businesses or properties, nor any
relationship between any of the Partnerships or Subsidiaries and any other
Person, nor any circumstance in connection with the offering, issuance, sale or
delivery of the Notes (assuming the accuracy of the Purchaser's representations
in paragraph 9) is such as to require any authorization, consent, approval,
exemption or any action by or notice to or filing with any court or
administrative or governmental body (other than routine filings after the
Closing Day for any Notes with the Securities and Exchange Commission and/or
state Blue Sky authorities) in connection with the execution and delivery of
this Agreement, the offering, issuance, sale or delivery of the Notes or
fulfillment of or compliance with the terms and provisions hereof or of the
Notes.
8L. USE OF PROCEEDS. The proceeds of the sale of the Series A Notes shall
be used by the Partnerships for the prepayment of short-term indebtedness and
for other general corporate purposes. None of the proceeds of the sale of any
Notes will be used to finance a Hostile Tender Offer.
8M. COMPLIANCE WITH LAW/FRANCHISE MATTERS.
(i) Each Partnership and each Subsidiary is in compliance with all
federal, state, local and other governmental laws and regulations applicable to
or binding upon it or any of its property or assets or to which it or any of
its property or assets is subject, including, without limitation, (a) the FTC
Rule and all applicable state franchise laws and regulations,business
opportunity acts and trade practices acts, (b) all laws and regulations
relating to equal employment opportunity and employee safety, and (c) all laws
relating to the environment; except in each instance where noncompliance could
not reasonably be expected to have a material adverse effect on the business,
financial condition, operations or prospects of PFR and its Subsidiaries, taken
as a whole.
(ii) Neither Partnership has knowledge of any complaint filed with, any
pending or threatened investigation by, or any actual investigation conducted
by, the FTC or any enforcement agency against or affecting PFR or Perkins
pursuant to any state franchise laws, business opportunity acts or trade
practices acts.
(iii) Perkins is duly registered and authorized to offer and sell
restaurant franchises pursuant to the Franchises, in accordance with the state
franchise laws and business opportunity acts in all of the states in which
Perkins is required to be registered in order to offer and sell the Franchises,
and Perkins has effected all registration renewals and made all amendments to
state registrations as required under all such state franchise laws and state
business opportunity acts, except in each instance where the failure to be so
registered or authorized or to renew or amend state registrations could not
reasonably be expected to have a material adverse effect on the business,
financial condition, operations or prospects of Perkins.
(iv) All of the Franchises currently in existence are valid, binding and
in full force and effect, and except as set forth on Exhibit F attached hereto,
there are no existing defaults by Perkins or claims by Franchisees of defaults
under any of the Franchises or notices
38
received by Perkins of any Franchisee's intention to cancel, terminate or not
renew any of the Franchises.
8N. INTELLECTUAL PROPERTY. Perkins is the exclusive owner of all of the
patents, trademarks, service marks, trade names, copyrights, franchises and
licenses (collectively, the "MARKS"), and rights with respect thereto,
necessary for the conduct of its business as now conducted, including, without
limitation, the trade name "Xxxxxxx Family Restaurant", without any known
conflict with the rights of others and, in each case, subject to no Lien. Each
Mark and each registration of a Mark is in full force and effect and Perkins
has fulfilled and performed all its obligations with respect thereto
(including, without limitation, the filing of all appropriate renewals for
registered Marks). No event has occurred or exists which permits, or after
notice or lapse of time or both would permit, revocation or termination of any
Mark, or which materially and adversely affects or in the future may (so far as
each Partnership now foresees) materially and adversely affect, the rights of
Perkins with respect thereto. No other license or franchise is necessary to
the operations of the business of Perkins as now conducted or proposed to be
conducted.
80. HOLDING COMPANY AND INVESTMENT COMPANY STATUS. No Partnership or
Subsidiary is a "holding company", or a "subsidiary company" of a "holding
company", or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company", or a "public utility", within the meaning of the Public
Utility Holding Company Act of 1935, as amended, or a "public utility" within
the meaning of the Federal Power Act, as amended. No Partnership or Subsidiary
is an "investment company" or a company "controlled" by an"investment company"
within the meaning of the Investment Company Act of 1940, as amended.
8P. DISCLOSURE. Neither this Agreement nor any other document,
certificate or statement furnished to the Purchasers by or on behalf of the
Partnerships (or either of them) in connection herewith ("OFFERING MATERIALS")
contains any untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements contained herein and therein not
misleading. There is no fact peculiar to any of the Partnerships or
Subsidiaries which materially and adversely affects or in the future may (so
far as each Partnership now foresees) materially and adversely affect the
operations, business, property or assets, or financial condition of PFR and its
Subsidiaries, taken as a whole, and which has not been set forth in this
Agreement or in the Offering Materials furnished to you by or on behalf of the
Partnerships prior to the Closing Day.
9. REPRESENTATIONS OF THE PURCHASERS. Each Purchaser represents: (i)
that it is purchasing the Notes for its own account or for one or more separate
accounts maintained by it or for the account of one or more pension or trust
funds and not with a view to the distribution or sale thereof, provided that
the disposition of its property shall at all times be within its control; and
(ii) at least one of the following statements is an accurate representation as
to each source of funds (a "Source") to be used to pay the purchase price of
the Notes to be purchased by it hereunder:
39
(a) if an insurance company, the Source does not include assets
allocated to any separate account maintained by it in which any employee
benefit plan (or its related trust) has any interest, other than a
separate account that is maintained solely in connection with its fixed
contractual obligations under which the amounts payable, or credited, to
such plan and to any participant or beneficiary of such plan (including
any annuitant) are not affected in any manner by the investment
performance of the separate account; or
(b) the Source is either (i) an insurance company pooled separate
account, within the meaning of Prohibited Transaction Exemption ("PTE")
90-1 (issued January 29, 1990), (ii) a bank collective investment fund,
within the meaning of the PTE 91-38 (issued July 12, 1991) and, except as
such Purchaser shall have disclosed to the Company in writing pursuant to
this clause (b), no employee benefit plan or group of plans maintained by
the same employee organization beneficially owns more than 10% of all
assets allocated to such pooled separate account or collective investment
fund or (iii) the Source is an insurance company general account of which
the assets are such that if any of them are, or are deemed to be, assets
of any Plan, the acquisition of the Notes by such Purchaser pursuant
hereto is eligible for and satisfies the requirements of PTE 95-60
(issued July 12, 1995); or
(c) the Source constitutes assets of an "investment fund" (within
the meaning of Part V of PTE 84-14 managed by a "qualified professional
asset manager" or "QPAM" (within the meaning of Part V of PTE 84-14), no
employee benefit plan's assets that are included in such investment fund,
when combined with the assets of all other employee benefit plans
established or maintained by the same employer or by anaffiliate (within
the meaning of Section V(c)(1) of PTE 84-14) of such employer or by the
same employer or by the same employee organization and managed by such
QPAM, exceed 20% of the total client assets managed by such QPAM, the
conditions of Part I(c) and (g) of PTE 84-14 are satisfied, neither the
QPAM nor a person controlling or controlled by the QPAM (applying the
definition of "control" in Section V(e) of the PTE 84-14) owns a 5% or
more interest in the Company and (i) the identity of such QPAM and (ii)
the names of all employee benefit plans whose assets are included in such
investment fund have been disclosed to the Company in writing pursuant to
this paragraph (c); or
(d) the Source is a governmental plan; or
(e) the Source is one or more employee benefit plans, or a separate
account or trust fund comprised of one or more employee benefit plans,
each of which has been identified to the Company in writing pursuant to
this paragraph (e); or
(f) the Source does not include assets of any employee benefit plan,
other than a plan exempt from the coverage of ERISA.
40
As used in this paragraph, the terms "EMPLOYEE BENEFIT PLAN", "GOVERNMENTAL
PLAN", "PARTY IN INTEREST" and "SEPARATE ACCOUNT" shall have the respective
meanings assigned to such terms in Section 3 of ERISA.
10. DEFINITIONS; ACCOUNTING MATTERS. For the purpose of this Agreement,
the terms defined in paragraphs 10A and 10B (or within the text of any other
paragraph) shall have the respective meanings specified therein and all
accounting matters shall be subject to determination as provided in paragraph
10C.
10A. YIELD-MAINTENANCE TERMS.
"CALLED PRINCIPAL" shall mean, with respect to any Note, the principal of
such Note that is to be prepaid pursuant to paragraph 4C or is declared to be
immediately due and payable pursuant to paragraph 7A, as the context requires.
"DISCOUNTED VALUE" shall mean, with respect to the Called Principal of any
Note, the amount obtained by discounting all Remaining Scheduled Payments with
respect to such Called Principal from their respective scheduled due dates to
the Settlement Date with respect to such Called Principal, in accordance with
accepted financial practice and at a discount factor (as converted to reflect
the periodic basis on which interest on such Note is payable, if payable other
than on a semi-annual basis) equal to the Reinvestment Yield with respect to
such Called Principal.
"REINVESTMENT YIELD" shall mean, with respect to the Called Principal of
any Note, the yield to maturity implied by (i) the yields reported, as of 10:00
A.M. (New York City local time) on the Business Day next preceding the
Settlement Date with respect to such Called Principal, on the display
designated as "Page 678" on the Telerate Service (or such other display as may
replace page 678 on the Telerate Service) for actively traded U.S.
Treasurysecurities having a maturity equal to the Remaining Average Life of
such Called Principal as of such Settlement Date, or if such yields shall not
be reported as of such time or the yields reported as of such time shall not be
ascertainable, (ii) the Treasury Constant Maturity Series yields reported, for
the latest day for which such yields shall have been so reported as of the
Business Day next preceding the Settlement Date with respect to such Called
Principal, in Federal Reserve Statistical Release H.15 (519) (or any comparable
successor publication) for actively traded U.S. Treasury securities having a
constant maturity equal to the Remaining Average Life of such Called Principal
as of such Settlement Date. Such implied yield shall be determined, if
necessary, by (a) converting U.S. Treasury bill quotations to bond-equivalent
yields in accordance with accepted financial practice and (b) interpolating
linearly between yields reported for various maturities.
"REMAINING AVERAGE LIFE" shall mean, with respect to the Called Principal
of any Note, the number of years (calculated to the nearest one-twelfth year)
obtained by dividing (i) such Called Principal into (ii) the sum of the
products obtained by multiplying (a) each Remaining Scheduled Payment of such
Called Principal (but not of interest thereon) by (b) the number of years
(calculated to the nearest one-twelfth year) which will elapse between the
41
Settlement Date with respect to such Called Principal and the scheduled due
date of such Remaining Scheduled Payment.
"REMAINING SCHEDULED PAYMENTS" shall mean, with respect to the Called
Principal of any Note, all payments of such Called Principal and interest
thereon that would be due on or after the Settlement Date with respect to such
Called Principal if no payment of such Called Principal were made prior to its
scheduled due date.
"SETTLEMENT DATE" shall mean, with respect to the Called Principal of any
Note, the date on which such Called Principal is to be prepaid pursuant to
paragraph 4A or is declared to be immediately due and payable pursuant to
paragraph 7A, as the context requires.
"YIELD-MAINTENANCE AMOUNT" shall mean, with respect to any Note, an amount
equal to the excess, if any, of the Discounted Value of the Called Principal of
such Note over the sum of (i) such Called Principal plus (ii) interest accrued
thereon as of (including interest due on) the Settlement Date with respect to
such Called Principal. The Yield-Maintenance Amount shall in no event be less
than zero.
10B. OTHER TERMS.
"ACCEPTANCE" shall have the meaning specified in paragraph 2B(6).
"ACCEPTANCE DAY" shall have the meaning specified in paragraph 2B(6).
"ACCEPTANCE WINDOW" shall have the meaning specified in paragraph 2B(6).
"ACCEPTED NOTE" shall have the meaning specified in paragraph 2B(6).
"AFFILIATE" shall mean (i) any Person directly or indirectly controlling,
controlled by, or under direct or indirect common control with, PFR, Perkins,
any Subsidiary or the General Partner or (ii) any Person beneficially owning or
holding 5% or more of an equity interest in PFR, Perkins, any Subsidiary or the
General Partner or (iii) any Person of which 5% or more of any equity interest
is beneficially owned or held by PFR, Perkins, any Subsidiary or the General
Partner. A Person shall be deemed to control an entity if such Person
possesses, directly or indirectly, the power to direct or cause the direction
of the management and policies of such entity, whether through the ownership of
voting securities, partnership units, by contract or otherwise.
"AUTHORIZED OFFICER" shall mean (i) in the case of the Partnerships, the
chief executive officer, chief operating officer or chief financial officer of
the General Partner or any vice president of the General Partner designated as
an "Authorized Officer" of the Partnerships in the Information Schedule
attached hereto or any vice president of the Partnerships designated as an
"Authorized Officer" of the Partnerships for the purpose of this Agreement in
an Officer's Certificate executed by the Partnership's chief executive officer
or chief financial officer and delivered to Prudential, and (ii) in the case of
Prudential, any officer of Prudential designated as
42
its "Authorized Officer" in the Information Schedule or any officer of
Prudential designated as its "Authorized Officer" for the purpose of this
Agreement in a certificate executed by one of its Authorized Officers. Any
action taken under this Agreement on behalf of the Partnerships by any
individual who on or after the date of this Agreement shall have been an
Authorized Officer of the Partnerships and whom Prudential in good faith
believes to be an Authorized Officer of the Partnerships at the time of such
action shall be binding on the Partnerships even though such individual shall
have ceased to be an Authorized Officer of the Partnership, and any action
taken under this Agreement on behalf of Prudential by any individual who on or
after the date of this Agreement shall have been an Authorized Officer of
Prudential and whom the Partnerships in good faith believes to be an Authorized
Officer of Prudential at the time of such action shall be binding on Prudential
even though such individual shall have ceased to be an Authorized Officer of
Prudential.
"AVAILABLE FACILITY AMOUNT" shall have the meaning specified in paragraph
2B(1).
"BANKRUPTCY LAW" shall have the meaning specified in clause (viii) of
paragraph 7A.
"BUSINESS DAY" shall mean any day other than (i) a Saturday or a Sunday,
(ii) a day on which commercial banks in New York City are required or
authorized to be closed and (iii) for purposes of paragraph 2B(3) hereof only,
a day on which The Prudential Insurance Company of America is not open for
business.
"CANCELLATION DATE" shall have the meaning specified in paragraph
2B(9)(iii).
"CANCELLATION FEE" shall have the meaning specified in paragraph
2B(9)(iii).
"CAPITALIZED LEASE OBLIGATION" shall mean any rental obligation which,
under generally accepted accounting principles, is or will be required to be
capitalized on the books of PFR, Perkins or any Subsidiary, taken at the amount
thereof accounted for as indebtedness (net of interest expenses) in accordance
with such principles.
"CERCLA" means the Comprehensive Environmental Response Compensation and
Liability Act.
"CERCLIS" means the Comprehensive Environmental Response Compensation and
Liability Inventory System established pursuant to CERCLA.
"CLOSING DAY" shall mean, with respect to the Series A Notes, the Series A
Closing Day and, with respect to any Accepted Note, the Business Day specified
for the closing of the purchase and sale of such Accepted Note in the Request
for Purchase of such Accepted Note, provided that (i) if the Company and the
Purchaser which is obligated to purchase such Accepted Note agree on an earlier
Business Day for such closing, the "CLOSING DAY" for such Accepted Note shall
be such earlier Business Day, and (ii) if the closing of the purchase and sale
43
of such Accepted Note is rescheduled pursuant to paragraph 2B(8), the Closing
Day for such Accepted Note, for all purposes of this Agreement except
references to "original Closing Day" in paragraph 2B(9)(iii), shall mean the
Rescheduled Closing Day with respect to such Accepted Note.
"CODE" shall mean the Internal Revenue Code of 1986, as amended.
"CONFIDENTIAL INFORMATION" shall mean any information delivered or made
available by one or both of the Partnerships to a holder of Notes, which
information is either financial or clearly indicated to be confidential
information and does not include information which (i) was publicly known, or
otherwise known to such holder, at the time of disclosure, (ii) subsequently
becomes publicly known through no act of or omission by such holder, or (iii)
otherwise becomes known to such holder, other than through disclosure by either
Partnership.
"CONFIRMATION OF ACCEPTANCE" shall have the meaning specified in paragraph
2B(6).
"CONSOLIDATED NET EARNINGS" shall mean consolidated net income of PFR and
its Subsidiaries as determined in accordance with generally accepted accounting
principles, but not including the effect of any gains (net of expenses and
taxes applicable thereto) or losses (net of expenses and taxes applicable
thereto) resulting from the sale, conversion or other disposition of capital
assets (i.e., assets other than Current Assets), any gains resulting from the
write-up of assets, any equity of PFR or any Subsidiary in the unremitted
earnings of any Person which is not a Subsidiary, any earnings of any Person
acquired by PFR or any Subsidiary through purchase, merger or consolidation or
otherwise for any year prior to the year of acquisition, or any deferred credit
representing the excess of equity in any Subsidiary at the date of acquisition
over the cost of the investment in such Subsidiary; all determined in
accordance with generally accepted accounting principles.
"CONSOLIDATED NET WORTH" shall mean as of the time of any determination
thereof the excess of (a) the total assets of PFR and its Subsidiaries
appearing on a consolidated balance sheet of PFR and its Subsidiaries prepared
in accordance with generally accepted accounting principles as of the date of
determination, after eliminating all intercompany transactions and all amounts
properly attributable to minority interests, if any,in the equity and surplus
of Subsidiaries, over (b) Indebtedness of PFR and its Subsidiaries, on a
consolidated basis, after eliminating all intercompany transactions.
"CURRENT ASSETS" shall mean, as at any date of determination, the
consolidated current assets of PFR and its Subsidiaries after eliminating all
intercompany items, as determined in accordance with generally accepted
accounting principles and consistent with those followed in the preparation of
the financial statements referenced in paragraph 8B.
"DELAYED DELIVERY FEE" shall have the meaning specified in paragraph
2B(9)(ii).
44
"EBITDA" shall mean, for the four (4) fiscal quarters ending immediately
prior to the date of determination, Consolidated Net Earnings, plus the
aggregate amount of all interest expense, taxes, depreciation and amortization
for such period, to the extent such items were deducted in determining
Consolidated Net Earnings.
"ENVIRONMENTAL LIABILITIES" shall mean any liabilities, whether accrued or
contingent, arising from or relating in any way to any Environmental
Requirements.
"ENVIRONMENTAL REQUIREMENTS" shall mean any applicable local, state or
federal law, rule, regulation, permit, order, decision, determination or
requirement relating in any way to Hazardous Materials or to health, safety or
the environment.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA AFFILIATE" shall mean any corporation which is a member of the same
controlled group of corporations as the Company within the meaning of section
414(b) of the Code, or any trade or business which is under common control with
the Company within the meaning of section 414(c) of the Code.
"EVENT OF DEFAULT" shall mean any of the events specified in paragraph 7A,
provided that there has been satisfied any requirement in connection with such
event for the giving of notice, or the lapse of time, or the happening of any
further condition, event or act, and "DEFAULT" shall mean any of such events,
whether or not any such requirement has been satisfied.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended.
"FIXED CHARGES" shall mean, for the four (4) fiscal quarters ending
immediately prior to the date of determination, the sum of (i) the gross
interest accrued on Indebtedness of PFR and its Subsidiaries, on a consolidated
basis, after eliminating all intercompany transactions, during such preceding
four (4) fiscal quarters plus (ii) the rental expense under Operating Leases of
the Partnerships and the Subsidiaries during such preceding four (4) fiscal
quarters.
"FIXED CHARGE COVERAGE RATIO" shall mean, at any time, the ratio of (a)
EBITDA plus the rental expense under Operating Leases of the Partnerships and
the Subsidiaries during the four (4) fiscal quarters immediately preceding the
date of determination to (b) Fixed Charges.
"FRANCHISES" shall mean all present and future commitment agreements,
franchise agreements, development agreements, bakery agreements, asset
agreements, franchising lease agreements and real estate purchase agreements,
and all addenda thereto, entered into between Perkins and the Persons executing
such agreements for the purpose of becoming a licensee of the Xxxxxxx Family
Restaurant system, including but not limited to those agreements (identified by
name of Franchisee and store location only) described on Exhibit F.
45
"FRANCHISEES" shall mean the franchisees under the Franchises.
"FTC" shall mean the Federal Trade Commission and any successor entity
performing similar functions.
"FTC RULE" shall have the meaning specified in paragraph 5F.
"FUNDED DEBT" shall mean and include, without duplication:
(i) any obligation of any of the Partnerships or Subsidiaries (excluding
intercompany obligations) for borrowed money (including Capitalized Lease
Obligations and including any notes payable and drafts accepted representing
extensions of credit whether or not representing obligations for borrowed
money);
(ii) indebtedness which is secured by any Lien on property owned by any of
the Partnerships or Subsidiaries, whether or not the indebtedness secured
thereby shall have been assumed by such Partnership or Subsidiary;
(iii) Guarantees, endorsements (other than endorsements of negotiable
instruments for collection in the ordinary course of business) and other
contingent liabilities (whether direct or indirect) of any of the Partnerships
or Subsidiaries in connection with the obligations, stock or dividends of any
Person;
(iv) obligations of any of the Partnerships or Subsidiaries under any
contract providing for the making of loans, advances or capital contributions
to any Person, or for the purchase of any property from any Person, in each
case in order to enable such Person primarily to maintain working capital, net
worth or any other balance sheet condition or to pay debts, dividends or
expenses;
(v) obligations of any of the Partnerships or Subsidiaries under any
contract for the purchase of materials, supplies or other property or services
if such contract (or any related document) requires that payment for such
materials, supplies or other property or services shall be made regardless of
whether or not delivery of such materials, supplies or other property or
services is ever made or tendered;
(vi) obligations of any of the Partnerships or Subsidiaries under any
contract to rent or lease (as lessee) any real or personal property if such
contract (or any related document) provides that the obligation to make
payments thereunder is absolute and unconditional under conditions not
customarily found in commercial leases then in general use or requires that the
lessee purchase or otherwise acquire securities or obligations of the lessor;
(vii) obligations of any of the Partnerships or Subsidiaries under any
contract for the sale or use of materials, supplies or other property or
services if such contract (or any related document) requires that payment for
such materials, supplies or other property or services, or the use thereof,
shall be subordinated to any indebtedness (of the purchaser or user of
46
such materials, supplies or other property or the Person entitled to the
benefit of such services) owed or to be owed to any Person; and
(viii) the obligations of any of the Partnerships or Subsidiaries under
any other contract which, in economic effect, is substantially equivalent to a
Guarantee;
all as determined in accordance with generally accepted accounting principles.
"GENERAL PARTNER" shall mean Xxxxxxx Management Company, Inc., a Delaware
corporation, for so long as it is the general partner of the Partnerships, and
any successor general partner of the Partnerships.
"GUARANTEE" shall mean, with respect to any Person, any direct or indirect
liability, contingent or otherwise, of such Person with respect to any
indebtedness, lease, dividend or other obligation of another, including,
without limitation, any contingent reimbursement obligation of such Person in
connection with letters of credit issued for the account of such Person, or any
obligation directly or indirectly guaranteed, endorsed (otherwise than for
collection or deposit in the ordinary course of business) or discounted or sold
with recourse by such Person, or in respect of which such Person is otherwise
directly or indirectly liable, including, without limitation, any such
obligation in effect guaranteed by such Person through any agreement
(contingent or otherwise) to purchase, repurchase or otherwise acquire such
obligation or any security therefor, or to provide funds for the payment or
discharge of such obligation (whether in the form of loans, advances, stock
purchases, capital contributions or otherwise), or to maintain the solvency or
any balance sheet or other financial condition of the obligor of such
obligation, or to make payment for any products, materials or supplies or for
any transportation or services regardless of the non-delivery or non-furnishing
thereof, in any such case if the purpose or intent of such agreement is to
provide assurance that such obligation will be paid or discharged, or that any
agreements relating thereto will be complied with, or that the holders of such
obligation will be protected against loss in respect thereof. The amount of
any Guarantee shall be equal to the outstanding principal amount of the
obligation guaranteed or such lesser amount to which the maximum exposure of
the guarantor shall have been specifically limited.
"HAZARDOUS MATERIALS" shall mean and include, without limitation, (a)
hazardous waste as defined in the Resource Conservation and Recovery Act of
1976, or in any applicable state or local law or regulation, (b) hazardous
substances, as defined in the Comprehensive Environmental Response Compensation
and Liability Act, or in any applicablestate or local law or regulation, (c)
gasoline, or any other petroleum product or by-product, (d) toxic substances,
as defined in the Toxic Substances Control Act of 1976, or in any applicable
state or local law or regulation, (e) insecticides, fungicides, or
rodenticides, as defined in the Federal Insecticide, Fungicide, and Rodenticide
Act of 1975, or in any applicable state or local law or regulation, or (f) any
hazardous waste, hazardous substances, hazardous materials, toxic substances or
toxic pollutants, as those terms are used or defined in the Hazardous Materials
Transportation Act, the Clean Air Act or the Clean Water Act, as each such Act,
statute or regulation may be amended from time to time.
47
"HEDGE TREASURY NOTE(S)" shall mean, with respect to any Accepted Note,
the United States Treasury Note or Notes whose duration (as determined by
Prudential) most closely matches the duration of such Accepted Note.
"HOSTILE TENDER OFFER" shall mean, with respect to the use of proceeds of
any Note, any offer to purchase, or any purchase of, shares of capital stock of
any corporation or equity interests in any other entity, or securities
convertible into or representing the beneficial ownership of, or rights to
acquire, any such shares or equity interests, if such shares, equity interests,
securities or rights are of a class which is publicly traded on any securities
exchange or in any over-the-counter market, other than purchases of such
shares, equity interests, securities or rights representing less than 5% of the
equity interests or beneficial ownership of such corporation or other entity
for portfolio investment purposes, and such offer or purchase has not been duly
approved by the board of directors of such corporation or the equivalent
governing body of such other entity prior to the date on which the Partnerships
makes the Request for Purchase of such Note.
"INCLUDING" shall mean, unless the context clearly requires otherwise,
"including without limitation".
"INDEBTEDNESS" shall mean, with respect to any Person, without
duplication, (i) all items (excluding items of contingency reserves or of
reserves for deferred income taxes) which in accordance with generally accepted
accounting principles would be included in determining total liabilities as
shown on the liability side of a balance sheet of such Person as of the date on
which Indebtedness is to be determined, (ii) all indebtedness secured by any
Lien on any property or asset owned or held by such Person subject thereto,
whether or not the indebtedness secured thereby shall have been assumed, and
(iii) all indebtedness of others with respect to which such Person has become
liable by way of Guarantee.
"INVESTMENTS" as applied to any Person, shall mean any direct or indirect
purchase or other acquisition by such Person of stock or equity interests or
other securities of any other Person, or any Guarantee, endorsement (other than
endorsements of negotiable instruments for collection in the ordinary course)
or other obligations or contingent liabilities (whether direct or indirect) in
connection with the stock, other equity interests, dividends or obligations of
any Person or any direct or indirect loan, advance (other than advances to
employees for moving and travel expenses, drawing accounts and similar
expenditures in the ordinary course of business) or capital contribution by
such Person to any other Person, including all debt and accounts receivable
from such other Person which are not Current Assets or did not arise from sales
to such other Person in the ordinary course of business, and any direct or
indirect purchase or other acquisition by such Person of any assets other than
assets used in the ordinary course of business.
"ISSUANCE PERIOD" shall have the meaning specified in paragraph 2B(2).
"LIEN" shall mean any mortgage, pledge, security interest, encumbrance,
lien (statutory or otherwise) or charge of any kind (including any agreement to
give any of the
48
foregoing, any conditional sale or other title retention agreement, any lease
in the nature thereof, and the filing of or agreement to give any financing
statement under the Uniform Commercial Code of any jurisdiction) or any other
type of preferential arrangement for the purpose, or having the effect, of
protecting a creditor against loss or securing the payment or performance of an
obligation.
"MARKS" shall have the meaning specified in paragraph 8N.
"MULTIEMPLOYER PLAN" shall mean any Plan which is a "multiemployer plan"
(as such term is defined in section 4001(a)(3) of ERISA.
"NOTES" shall have the meaning specified in paragraph 1B.
"OFFICER'S CERTIFICATE" shall mean a certificate signed in the name of the
Company by an Authorized Officer of the Company.
"OPERATING LEASE" shall mean any lease of any property (whether real,
personal or mixed) for a term (including any renewals or extensions permitted)
greater than one (1) year, which is not a Capitalized Lease Obligation.
"PERKINS" shall have the meaning specified in the introductory paragraph
hereof.
"PERSON" shall mean and include an individual, a partnership, a joint
venture, a corporation, a trust, an unincorporated organization and a
government or any department or agency thereof.
"PLAN" shall mean any employee pension benefit plan (as such term is
defined in section 3 of ERISA) which is or has been established or maintained,
or to which contributions are or have been made, by the Company or any ERISA
Affiliate.
"PROPERTIES" shall mean all real property owned, leased or otherwise used
or occupied by any of the Partnerships or Subsidiaries, wherever located.
"PRUDENTIAL" shall mean The Prudential Insurance Company of America.
"PRUDENTIAL AFFILIATE" shall mean any corporation or other entity all of
the Voting Stock (or equivalent voting securities or interests) of which is
owned by Prudential either directly or through Prudential Affiliates.
"PURCHASERS" shall mean Prudential with respect to the Series A Notes and,
with respect to any Accepted Notes, Prudential and/or the Prudential
Affiliate(s), which are purchasing such Accepted Notes.
"REQUEST FOR PURCHASE" shall have the meaning specified in paragraph
2B(3).
49
"REQUIRED HOLDER(S)" shall mean the holder or holders of at least 66
2/3%of the aggregate principal amount of the Notes or of a Series of Notes, as
the context may require, from time to time outstanding.
"RESCHEDULED CLOSING DAY" shall have the meaning specified in paragraph
2B(7).
"RESPONSIBLE OFFICER" shall mean the chief executive officer, chief
operating officer, chief financial officer or chief accounting officer of the
Company, general counsel of the Company or any other officer of the Company
involved principally in its financial administration or its controllership
function.
"RESTRICTED SUBSIDIARIES", shall mean and include all of the Subsidiaries
other than Perkins.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
"SERIES" shall have the meaning specified in paragraph 1B.
"SERIES A CLOSING DAY" shall have the meaning specified in paragraph 2A.
"SERIES A NOTE(S)" shall have the meaning specified in paragraph 1A.
"SIGNIFICANT HOLDER" shall mean (i) Prudential, so long as Prudential or
any Prudential Affiliate shall hold (or be committed under this Agreement to
purchase) any Note, or (ii) any other holder of at least 5% of the aggregate
principal amount of the Notes from time to time outstanding.
"SUBSIDIARY" shall mean any entity organized under the laws of any state
of the United States of America, Canada, or any province of Canada, which
conducts the major portion of its business in and makes the major portion of
its sales to Persons located in the United States of America or Canada, and (a)
if such entity is a corporation, at least 51% of the total combined voting
power of all classes of Voting Stock of which shall, at the time as of which
any determination is being made, be owned by the Partnerships (or either of
them) either directly or through Subsidiaries, and (b) if such entity is a
partnership, (i) the general partner (or one of the general partners) of which
shall, at the time as of which any determination is being made, be PFR, Perkins
or any Subsidiary or (ii) at least 51% of the limited partnership interest of
which shall, at the time as of which any determination is being made, be owned
by the Partnerships (or either of them) either directly or through
Subsidiaries.
"TANGIBLE GROSS WORTH" shall mean the excess of (a) the gross book value
of the Consolidated assets of PFR and its Subsidiaries over (b) goodwill,
patents, trademarks, trade, names, service marks, organization expense,
treasury stock, "Restricted Units" issued under the Restricted Unit Plan,
unamortized debt discount and expense and other like intangible assets of PFR
and its Subsidiaries.
50
"TANGIBLE NET WORTH" shall mean the excess of (a) the sum of (i) the gross
book value of the consolidated assets of PFR and its Subsidiaries (exclusive of
good will, patents, trademarks, trade names, service marks, organization
expense, treasury stock, "restricted Units" issued under the Restricted Unit
Plan, unamortized debt discount and expense and other like intangibles) plus
(ii) restructuring charges in the amount of $4,338,000 recorded in 1993
relating to certain underperforming assets over (b) Indebtedness of PFR and its
Subsidiaries, on a consolidated basis, after eliminating all intercompany
transactions.
"TRANSFEREE" shall mean any direct or indirect transferee of all or any
part of any Note purchased by any Purchaser under this Agreement.
"VOTING STOCK" shall mean, with respect to any corporation, any shares of
stock of such corporation whose holders are entitled under ordinary
circumstances to vote for the election of directors of such corporation
(irrespective of whether at the time stock of any other class or classes shall
have or might have voting power by reason of the happening of any contingency).
10C. ACCOUNTING PRINCIPLES, TERMS AND DETERMINATIONS. All references in
this Agreement to "generally accepted accounting principles" shall be deemed to
refer to generally accepted accounting principles in effect in the United
States at the time of application thereof. Unless otherwise specified herein,
all accounting terms used herein shall be interpreted, all determinations with
respect to accounting matters hereunder shall be made, and all unaudited
financial statements and certificates and reports as to financial matters
required to be furnished hereunder shall be prepared, in accordance with
generally accepted accounting principles, applied on a basis consistent with
(a) as to all matters and determinations respecting PFR and/or its
Subsidiaries, the most recent audited consolidated financial statements of PFR
and its Subsidiaries delivered pursuant to clause (ii) of paragraph 5A or, if
no such statements have been so delivered, the most recent audited financial
statements referred to in clause (i) of paragraph 8B, and (b) as to all matters
and determinations respecting the General Partner, the most recent financial
statements of the General Partner delivered pursuant to clauses (iii) and (iv)
of paragraph 5A.
11. MISCELLANEOUS.
11A. NOTE PAYMENTS. Each Partnership agrees that, so long as any
Purchaser holds any Note, it will make payments of principal thereof and
Yield-Maintenance Amount, if any, and interest thereon, which comply with the
terms of this Agreement, by wire transfer of immediately available funds for
credit to the account or accounts, if any, as are specified in the Purchaser
Schedule attached hereto (or in the case of any Shelf Note, on the Purchaser
Schedule attached to the Confirmation of Acceptance in respect of such Notes),
or such other account or accounts in the United States as such Purchaser may
from time to time designatein writing, notwithstanding any contrary provision
herein or in any Note with respect to the place of payment. Each Purchaser
agrees that, before disposing of any Note, it will make a notation thereon (or
on a schedule attached thereto) of all principal payments previously made
thereon
51
and of the date to which interest thereon has been paid. Each Partnership
agrees to afford the benefits of this paragraph 11A to any Transferee which
shall have made the same agreement as the Purchasers have made in this
paragraph 11A.
11B. EXPENSES. Each Partnership agrees, whether or not the transactions
contemplated hereby shall be consummated, to pay, and save Prudential, each
Purchaser and any Transferee harmless against liability for the payment of, all
(i) out-of-pocket expenses incurred in connection with the negotiation,
preparation, execution, delivery and administration of this Agreement and the
Notes, including all stamp, intangibles, recording and other taxes, together in
each case with interest and penalties, if any, payable by Prudential, each
Purchaser and/or any Transferee (other than any tax measured by the net income
of you or any Transferee) with respect to this Agreement and the Notes, (ii)
fees and disbursements of any special counsel and of each local counsel
retained by Prudential, each Purchaser and/or any Transferee and all
out-of-pocket expenses incurred by Prudential, each Purchaser and/or any
Transferee in connection with the preparation, negotiation, execution and
delivery of any waiver, amendment or consent relating to this Agreement and the
Notes (whether such waiver, amendment or consent is ever executed or
effective); and (iii) costs and expenses, including attorneys' fees and
disbursements of any special counsel and of each local counsel, incurred by
Prudential, each Purchaser and/or any Transferee in connection with the
restructuring, refinancing or "workout" of this Agreement or the Notes or the
transactions contemplated hereby or in enforcing any rights under this
Agreement or the Notes or in responding to any subpoena or other legal process
issued in connection with this Agreement or the transactions contemplated
hereby or by reason of any Purchaser or any Transferee having acquired any
Note, including without limitation costs and expenses incurred in any
bankruptcy case. The obligations of each Partnership under this paragraph 11B
shall survive the transfer of any Note or portion thereof or interest therein
by you or any Transferee and the payment, in whole or in part, of any Note.
11C. CONSENT TO AMENDMENTS. This Agreement may be amended, and the
Partnership may take any action herein prohibited, or omit to perform any act
herein required to be performed by it, if the Partnerships shall obtain the
written consent to such amendment, action or omission to act, of the Required
Holder(s) of the Notes of each Series except that, (i) with the written consent
of the holders of all Notes of a particular Series, and if an Event of Default
shall have occurred and be continuing, of the holders of all Notes of all
Series, at the time outstanding (and not without such written consents), the
Notes of such Series may be amended or the provisions thereof waived to change
the maturity thereof, to change or affect the principal thereof, or to change
or affect the rate or time of payment of interest on or any Yield-Maintenance
Amount payable with respect to the Notes of such Series, (ii) without the
written consent of the holder or holders of all Notes at the time outstanding,
no amendment to or waiver of the provisions of this Agreement shall change or
affect the provisions of paragraph 7A or this paragraph 11C insofar as such
provisions relate to proportions of the principal amount of the Notes of any
Series, or the rights of any individual holder of Notes, required with respect
to any declaration of Notes to be due and payable or with respect to any
consent, amendment, waiver or declaration, (iii) with the written consent of
Prudential (andnot without the written consent of Prudential) the provisions of
paragraph 2B may be amended or waived (except insofar as any such amendment or
waiver would affect any rights or obligations with respect to the
52
purchase and sale of Notes which shall have become Accepted Notes prior to such
amendment or waiver), and (iv) with the written consent of all of the
Purchasers which shall have become obligated to purchase Accepted Notes of any
Series (and not without the written consent of all such Purchasers), any of the
provisions of paragraphs 2B and 3 may be amended or waived insofar as such
amendment or waiver would affect only rights or obligations with respect to the
purchase and sale of the Accepted Notes of such Series or the terms and
provisions of such Accepted Notes. Each holder of any Note at the time or
thereafter outstanding shall be bound by any consent authorized by this
paragraph 11C, whether or not such Note shall have been marked to indicate such
consent, but any Notes issued thereafter may bear a notation referring to any
such consent. No course of dealing between the Partnership and the holder of
any Note nor any delay in exercising any rights hereunder or under any Note
shall operate as a waiver of any rights of any holder of such Note. As used
herein and in the Notes, the term "THIS AGREEMENT" and references thereto shall
mean this Agreement as it may from time to time be amended or supplemented.
11D. FORM, REGISTRATION, TRANSFER AND EXCHANGE OF NOTES; LOST NOTES. The
Notes are issuable as registered notes without coupons in denominations of at
least $1,000,000 and any greater integral multiple of $100,000. The
Partnerships shall keep at their principal office a register in which the
Partnerships shall provide for the registration of Notes and of transfers of
Notes. No holder of any Notes may make any transfer (other than pursuant to
paragraph 11E) to any Person of Notes in any principal amount not equal to an
authorized denomination. Upon surrender for registration of transfer of any
Note at the principal office of the Partnerships, the Partnerships shall, at
their expense, execute and deliver one or more new Notes, in authorized
denominations, of like tenor and of a like aggregate principal amount,
registered in the name of such Transferee or Transferees. At the option of the
holder of any Note, such Note may be exchanged for other Notes of like tenor
and of any authorized denominations, of a like aggregate principal amount, upon
surrender of the Note to be exchanged at the principal office of the
Partnerships. Whenever any Notes are so surrendered for exchange, the
Partnerships shall, at their expense, execute and deliver the Notes which the
holder making the exchange is entitled to receive. Each installment of
principal payable on each installment date upon each new Note issued upon any
such transfer or exchange shall be in the same proportion to the unpaid
principal amount of such new Note as the installment of principal payable on
such date on the Note surrendered for registration of transfer or exchange bore
to the unpaid principal amount of such Note. No reference need be made in any
such new Note to any installment or installments of principal previously due
and paid upon the Note surrendered for registration of transfer or exchange.
Every Note surrendered for registration of transfer or exchange shall be duly
endorsed, or be accompanied by a written instrument of transfer duly executed,
by the holder of such Note or such holder's attorney duly authorized in
writing. Any Note or Notes issued in exchange for any Note or upon transfer
thereof shall carry the rights to unpaid interest and interest to accrue which
were carried by the Note so exchanged or transferred, so that neither gain nor
loss of interest shall result from any such transfer or exchange. Upon receipt
of written notice from the holder of any Note of the loss, theft, destruction
or mutilation of such Note and, in the case of any such loss, theft or
destruction, upon receipt of such holder's indemnity agreement in a form
acceptable to the Partnerships; provided, however, that if such holder shall be
Prudential or any Person directlyor indirectly controlling, controlled by or
under
53
direct common control with Prudential, such indemnity agreement shall be
unsecured, or in the case of any such mutilation upon surrender and
cancellation of such Note, the Partnerships will make and deliver a new Note,
of like tenor, in lieu of the lost, stolen, destroyed or mutilated Note.
11E. PERSONS DEEMED OWNERS; PARTICIPATIONS. Prior to due presentment for
registration of transfer in accordance with the terms of this Agreement, the
Partnerships may treat the Person in whose name any Note is registered as the
owner and holder of such Note for the purpose of receiving payment of principal
of and premium, if any, and interest on such Note and for all other purposes
whatsoever, whether or not such Note shall be overdue, and the Partnerships
shall not be affected by notice to the contrary. Subject to the preceding
sentence, the holder of any Note may from time to time grant participations in
all or any part of such Note to any Person on such terms and conditions as may
be determined by such holder in its sole and absolute discretion.
11F. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT. All
representations and warranties contained herein or made in writing by or on
behalf of the Partnerships (or either of them) or by any Purchaser or any
Transferee in connection herewith shall survive the execution and delivery of
this Agreement and the Notes, the transfer of any Note or portion thereof or
interest therein and the payment of any Note, and such representations and
warranties of the Partnerships may be relied upon by any Transferee, regardless
of any investigation made at any time by you or on your behalf or on behalf of
any Transferee. Subject to the preceding sentence, this Agreement and the
Notes embody the entire agreement and understanding between the parties hereto
with respect to the subject matter hereof and supersede all prior agreements
and understandings relating to such subject matter.
11G. SUCCESSORS AND ASSIGNS. All covenants and other agreements in this
Agreement contained by or on behalf of any of the parties hereto shall bind and
inure to the benefit of the respective successors and assigns of the parties
hereto (including, without limitation, any Transferee) whether so expressed or
not.
11H. CONFIDENTIALITY; DISCLOSURE TO OTHER PERSONS. Each holder of a Note
agrees to exercise its best efforts to hold in confidence and not to disclose
Confidential Information except as permitted below. Each Partnership
acknowledges that each holder of any Note may deliver copies of Confidential
Information and other documents delivered to it, and disclose any other
information disclosed to it, by or on behalf of such Partnership or any
Subsidiary or the General Partner in connection with or pursuant to this
Agreement to (i) its directors, officers, employees, agents and professional
consultants, (ii) any Purchaser or any other holder of any Note, (iii) any
Person to which it offers to sell any Note or any part thereof (subject to such
future holder's agreement to protect the Confidential Information in accordance
with this paragraph 11H), (iv) any Person to which it sells or offers to sell a
participation in all or any part of any Note (subject to such participant's
agreement to protect the Confidential Information in accordance with this
paragraph 11H), (v) any federal or state regulatory authority having
jurisdiction over it, (vi) the National Association of Insurance Commissioners
or any similar organization, (vii) any other Person to which such delivery or
disclosure may be
54
necessary or appropriate (a) in compliance with any law, rule, regulationor
order applicable to it, (b) in response to any subpoena or other legal process,
(c)in connection with any litigation to which it is a party or(d) in order to
protect the investment of any holder in any Note.
11I. NOTICES. All written communications provided for hereunder (other
than communications provided for under paragraph 2) shall be sent by first
class mail or nationwide overnight delivery service (with charges prepaid) and
(i) if to any Purchaser, addressed as specified for such communications in the
Purchaser Schedule attached hereto (in the case of the Series A Notes) or the
Purchaser Schedule attached to the applicable Confirmation of Acceptance (in
the case of any Shelf Notes) or at such other address as any such Purchaser
shall have specified to the Company in writing, (ii) if to any other holder of
any Note, addressed to it at such address as it shall have specified in writing
to the Partnership or, if any such holder shall not have so specified an
address, then addressed to such holder in care of the last holder of such Note
which shall have so specified an address to the Company and (iii) if to the
Partnerships, addressed to them at 0000 Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxx
00000, attention: Xxxxxxx X. Xxxxxxx, Chief Financial Officer, with a copy to
Xxxxxx X. Xxxxxxx, Esq., General Counsel; provided, however, that any such
communication to the Partnerships may also, at the option of the Person sending
such communication, be delivered by any other means either to the Partnerships
at its address specified above or to any Authorized Officer of the
Partnerships. Any communication pursuant to paragraph 2 shall be made by the
method specified for such communication in paragraph 2, and shall be effective
to create any rights or obligations under this Agreement only if, in the case
of a telephone communication, an Authorized Officer of the party conveying the
information and of the party receiving the information are parties to the
telephone call, and in the case of a telecopier communication, the
communication is signed by an Authorized Officer of the party conveying the
information, addressed to the attention of an Authorized Officer of the party
receiving the information, and in fact received at the telecopier terminal the
number of which is listed for the party receiving the communication in the
Information Schedule or at such other telecopier terminal as the party
receiving the information shall have specified in writing to the party sending
such information.
11J. DESCRIPTIVE HEADINGS. The descriptive headings of the several
paragraphs of this Agreement are inserted for convenience only and do not
constitute a part of this Agreement.
11K. SATISFACTION REQUIREMENT. If any agreement, certificate or other
writing, or any action taken or to be taken, is by the terms of this Agreement
required to be satisfactory to you, to any holder of Notes or to the Required
Holder(s), the determination of such satisfaction shall be made by you, such
holder or the Required Holder(s), as the case may be, in the sole and exclusive
judgment (exercised in good faith) of the Person or Persons making such
determination.
11L. PAYMENTS DUE ON NON-BUSINESS DAYS. Anything in this Agreement or the
Notes to the contrary notwithstanding, any payment of principal of or interest
on any Note that is due on a date other than a Business Day shall be made on
the next succeeding Business Day. If the date for any payment is extended to
the next succeeding Business Dayby reason of
55
the preceding sentence, the period of such extension shall be included in the
computation of the interest payable on such Business Day.
11M. COUNTERPARTS. This Agreement may be executed simultaneously in two
(2) or more counterparts, each of which shall be deemed an original, and it
shall not be necessary in making proof of this Agreement to produce or account
for more than one such counterpart.
11N. SEVERABILITY. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
110. INDEPENDENCE OF COVENANTS. All covenants of the Partnerships
hereunder shall be of independent effect so that if a particular action or
condition is not permitted by any one of such covenants, the fact that it would
be permitted by an exception to, or otherwise be within the limitations of,
another covenant, shall not avoid the occurrence of an Event of Default if such
action is taken or condition exists.
11P. JOINT AND SEVERAL OBLIGATIONS. Each of PFR and Perkins agrees that
all representations, warranties, covenants, agreements and obligations under
this Agreement, including, without limitation, the obligations with respect to
payment of the Notes, constitute the joint and several representations,
warranties, covenants, agreements and obligations of PFR and Perkins.
11Q. GOVERNING LAW/JURISDICTION. THIS AGREEMENT IS INTENDED TO BE
PERFORMED IN THE STATE OF NEW YORK AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAW OF SUCH STATE. EACH OF THE PARTNERSHIPS HEREBY SUBMITS
TO THE JURISDICTION OF THE SUPREME COURT OF NEW YORK COUNTY, NEW YORK AND THE
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND
IRREVOCABLY AGREES THAT, SUBJECT TO YOUR ELECTION IN YOUR SOLE AND ABSOLUTE
DISCRETION, ALL ACTIONS OR PROCEEDINGS RELATING TO THIS AGREEMENT OR THE NOTES
SHALL BE LITIGATED IN SUCH COURTS, AND EACH OF THE PARTNERSHIPS WAIVES ANY
OBJECTION WHICH IT MAY HAVE BASED ON IMPROPER VENUE OR FORUM NON CONVENIENS TO
THE CONDUCT OF ANY PROCEEDING IN ANY SUCH COURT.
(Signatures on Following Page)
56
Very truly yours,
XXXXXXX FAMILY RESTAURANTS,
L.P., BY ITS SOLE GENERAL
PARTNER, XXXXXXX MANAGEMENT
COMPANY, INC.
By:
-------------------------------
Title
ATTEST:
By:
-------------------------------
Title
PERKINS RESTAURANTS
OPERATING COMPANY, L.P.,
BY ITS SOLE GENERAL PARTNER,
XXXXXXX MANAGEMENT COMPANY, INC.
By:
-------------------------------
Title
ATTEST:
By:
-------------------------------
Title
The foregoing Agreement is
hereby agreed to and accepted
as of the date first above written.
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
By:
-------------------------------
Vice President
57
PURCHASER SCHEDULE
Aggregate
Principal
Amount of
Notes to be Note
Purchase Denomination(s)
----------- ---------------
THE PRUDENTIAL INSURANCE COMPANY $20,000,000 $17,000,000
OF AMERICA $ 3,000,000
(1) All payments on account of Notes held by
such purchaser shall be made by wire transfer of
immediately available funds for credit to:
Account No. 000-00-000 in respect of the Note
in the principal amount of $17,000,000, and
Account No. 000-00-000 in respect of the
Note in the principal amount of $3,000,000
Xxxxxx Guaranty Trust Company of New York
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
(ABA No.: 021-000-238)
Each such wire transfer shall set forth the name
of the Company, a reference to "7.19% Senior Notes
due 2005, !Inv. 5286!" in the case of the Note in the
principal amount of $17,000,000 and !Inv. 5287!" in
the case of the Note in the principal amount of $3,000,000
and the due date and application (as among principal,
interest and Yield-Maintenance Amount) of the payment
being made.
(2) Address for all notices relating to payments:
The Prudential Insurance Company of America
c/o Prudential Capital Group
Four Gateway Center
000 Xxxxxxxx Xxxxxx
58
Newark, New Jersey 07102-4077
Attention: Manager, Investment Operations Group
(3) Address for all other communications and notices:
The Prudential Insurance Company of America
c/o Prudential Capital Group
4900 Renaissance Tower
0000 Xxx Xxxxxx
Xxxxxx, Xxxxx 00000
Attention: Managing Director
(4) Recipient of telephonic prepayment notices:
Manager, Investment Operations Group
(000) 000-0000
(5) Tax Identification No.: 00-0000000
59
INFORMATION SCHEDULE
AUTHORIZED OFFICERS FOR PRUDENTIAL
Xx Xxxxxx
Xxxxxx X. Xxxx
Prudential Capital Group
4900 Renaissance Tower
0000 Xxx Xxxxxx
Xxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Xxxxxx Xxxxx
Prudential Capital Group
Four Gateway Center
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
AUTHORIZED OFFICERS FOR THE COMPANY
Xxxxxxx X. Xxxxxxx
Vice President, Accounting
and Controller
Xxxxxx X. Xxxxxxx
Vice President and General Counsel
Xxxxxxx Family Restaurants, L.P.
0000 Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxx 00000
Telephone: (000) 000-0000
60
EXHIBIT A-1
FORM OF SERIES A NOTE
THIS NOTE HAS NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 AND MAY NOT BE OFFERED
OR SOLD IN VIOLATION OF SUCH ACT
XXXXXXX FAMILY RESTAURANTS, X.X.
XXXXXXX RESTAURANTS OPERATING COMPANY, L.P.
____% SENIOR SERIES A NOTE DUE _________________
No. _____ [Date]
$20,000,000
FOR VALUE RECEIVED, the undersigned, Xxxxxxx Family Restaurants, L.P., a
limited partnership organized and existing under the laws of the State of
Delaware, and Xxxxxxx Restaurants Operating Company, L.P., a limited
partnership organized and existing under the laws of the State of Delaware,
(herein called the "Company"), hereby jointly and severally promise to pay to
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, or registered assigns, the
principal sum of TWENTY MILLION DOLLARS ($20,000,000) on __________________,
with interest (computed on the basis of a 360-day year--30-day month) (a) on
the unpaid balance thereof at the rate of _____% per annum from the date
hereof, payable quarterly on the ____________ day of __________, __________,
__________ and __________ in each year, commencing with the __________,
__________, __________ or __________ next succeeding the date hereof, until the
principal hereof shall have become due and payable, and (b) on any overdue
payment (including any overdue prepayment) of principal, any overdue payment of
Yield Maintenance Amount and any overdue payment of interest, payable quarterly
as aforesaid (or, at the option of the registered holder hereof, on demand), at
a rate per annum from
61
time to time equal to the greater of (i)___*(1)___% or (ii) 2% over the rate of
interest publicly announced by Xxxxxx Guaranty Trust Company of New York from
time to time in New York City as its Prime Rate.
Payments of principal, Yield Maintenance Amount, if any, and interest are
to be made at the main office of Xxxxxx Guaranty Trust Company of New York in
New York City or at such other place as the holder hereof shall designate to
the Partnerships in writing, in lawful money of the United States of America.
This Note is one of a series of Senior Notes (herein called the "Notes")
issued pursuant to a Note Purchase and Private Shelf Agreement, dated as of
December __, 1995 (herein called the "Agreement"), between the Partnerships, on
the one hand, and The Prudential Insurance Company of America [insert names of
any other Purchasers of Series A Notes] and each Prudential Affiliate which
becomes party thereto, on the other hand, and is entitled to the benefits
thereof. As provided in the Agreement, this Note is subject to prepayment, in
whole or from time to time in part, in certain cases without Yield Maintenance
Amount and in other cases with the Yield Maintenance Amount specified in the
Agreement.
----------------
(1) *2% over coupon
A-61
62
This Note is a registered Note and, as provided in the Agreement, upon
surrender of this Note for registration of transfer, duly endorsed, or
accompanied by a written instrument of transfer duly executed, by the
registered holder hereof or such holder's attorney duly authorized in writing,
a new Note for the then outstanding principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Partnerships may treat the person in whose name
this Note is registered as the owner hereof for the purpose of receiving
payment and for all other purposes, and the Partnerships shall not be affected
by any notice to the contrary.
The Company agrees to make prepayments of principal of this Note on the
dates and in the amounts specified in the Agreement.
In case an Event of Default shall occur and be continuing, the principal
of this Note may be declared or otherwise become due and payable in the manner
and with the effect provided in the Agreement.
Capitalized terms used and not otherwise defined herein shall have the
meanings (if any) provided in the Agreement.
This Note is intended to be performed in the State of New York and shall
be construed and enforced in accordance with the internal law of such State.
XXXXXXX FAMILY RESTAURANTS,
L.P., BY ITS SOLE GENERAL
PARTNER, XXXXXXX MANAGEMENT
COMPANY, INC.
By:
------------------------------
Title
ATTEST:
By:
------------------------------
Title
XXXXXXX RESTAURANTS
A-62
63
OPERATING COMPANY, L.P.,
BY ITS SOLE GENERAL PARTNER,
XXXXXXX MANAGEMENT COMPANY, INC.
By:
------------------------------
Title
ATTEST:
By:
------------------------------
Title
A-63
64
EXHIBIT A-2
FORM OF SHELF NOTE
THIS NOTE HAS NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 AND MAY NOT BE OFFERED
OR SOLD IN VIOLATION OF SUCH ACT
XXXXXXX FAMILY RESTAURANTS, X.X.
XXXXXXX RESTAURANTS OPERATING COMPANY, L.P.
SENIOR SERIES ___ NOTE
No.
-----
ORIGINAL PRINCIPAL AMOUNT:
ORIGINAL ISSUE DATE:
INTEREST RATE:
INTEREST PAYMENT DATES:
FINAL MATURITY DATE:
PRINCIPAL PREPAYMENT DATES AND AMOUNTS:
FOR VALUE RECEIVED, the undersigned, Xxxxxxx Family Restaurants, L.P., a
limited partnership organized and existing under the laws of the State of
Delaware, and Xxxxxxx Restaurants Operating Company, L.P., a limited
partnership organized and existing under the laws of the State of Delaware,
(herein called the "Company"), hereby jointly and severally promise to pay to
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, or registered assigns, the
principal sum of ___________________ [on the Final Maturity Date specified
above] [, payable on the Principal Prepayment Dates and in the amounts
specified above, and on the Final Maturity Date specified above in an amount
equal to the unpaid balance of the principal hereof,] with interest (computed
on the basis of a 360-day year--30-day month) (a) on the unpaid balance thereof
at the Interest Rate per annum specified above, payable on each Interest
Payment Date specified above and on the Final Maturity Date specified above,
commencing with the Interest Payment Date next succeeding the date hereof,
until the principal hereof shall have become due and payable, and (b) on any
overdue payment (including any overdue prepayment) of principal, any overdue
payment of Yield Maintenance Amount and any overdue payment of interest,
payable on each Interest Payment Date as aforesaid (or, at the option of the
registered holder hereof, on
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demand), at a rate per annum from time to time equal to the greater of (i) 2%
over the Interest Rate specified above or (ii) 2% over the rate of interest
publicly announced by Xxxxxx Guaranty Trust Company of New York from time to
time in New York City as its Prime Rate.
Payments of principal, Yield Maintenance Amount, if any, and interest are
to be made at the main office of Xxxxxx Guaranty Trust Company of New York in
New York City or at such other place as the holder hereof shall designate to
the Company in writing, in lawful money of the United States of America.
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This Note is one of a series of Senior Notes (herein called the "Notes") issued
pursuant to a Note Purchase and Private Shelf Agreement, dated as of December
__, 1995 (herein called the "Agreement"), between the Partnerships, on the one
hand, and The Prudential Insurance Company of America [insert names of any
other Purchasers of Series A Notes] and each Prudential Affiliate (as defined
in the Agreement) which becomes party thereto, on the other hand, and is
entitled to the benefits thereof.
This Note is subject to optional prepayment, in whole or from time to time
in part, on the terms specified in the Agreement.
This Note is a registered Note and, as provided in the Agreement, upon
surrender of this Note for registration of transfer, duly endorsed, or
accompanied by a written instrument of transfer duly executed, by the
registered holder hereof or such holder's attorney duly authorized in writing,
a new Note for the then outstanding principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Partnerships may treat the person in whose name
this Note is registered as the owner hereof for the purpose of receiving
payment and for all other purposes, and the Partnerships shall not be affected
by any notice to the contrary.
In case an Event of Default shall occur and be continuing, the principal
of this Note may be declared or otherwise become due and payable in the manner
and with the effect provided in the Agreement.
Capitalized terms used and not otherwise defined herein shall have the
meanings (if any) provided in the Agreement.
This Note is intended to be performed in the State of New York and shall
be construed and enforced in accordance with the internal law of such State.
XXXXXXX FAMILY RESTAURANTS,
L.P., BY ITS SOLE GENERAL
PARTNER, XXXXXXX MANAGEMENT
COMPANY, INC.
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By:
------------------------------
Title
ATTEST:
By:
------------------------------
Title
XXXXXXX RESTAURANTS
OPERATING COMPANY, L.P.,
BY ITS SOLE GENERAL PARTNER,
XXXXXXX MANAGEMENT COMPANY, INC.
By:
------------------------------
Title
ATTEST:
By:
------------------------------
Title
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EXHIBIT B
FORM OF REQUEST FOR PURCHASE
XXXXXXX FAMILY RESTAURANTS, X.X.
XXXXXXX RESTAURANTS OPERATING COMPANY, L.P.
Reference is made to the Note Purchase and Private Shelf Agreement (the
"Agreement"), dated as of December 13, 1995 between Xxxxxxx Family Restaurants,
L.P. and Xxxxxxx Restaurants Operating Company, L.P. (collectively, the
"Partnerships"), on the one hand, and The Prudential Insurance Company of
America ("Prudential") and each Prudential Affiliate which becomes party
thereto, on the other hand. Capitalized terms used and not otherwise defined
herein shall have the respective meanings specified in the Agreement.
Pursuant to Paragraph 2B (4) of the Agreement, the Company hereby makes
the following Request for Purchase.
1. Aggregate principal amount of the Notes covered
hereby (the "Notes") ....................$_______________
2. Individual specifications of the Notes:
Principal Interest
Amount Principal Payment
Minimum Final Prepayment Period
principal amount Maturity Dates and Specify quarterly
of $5,000,000. Date Amounts or semi-annually.
---------------- ---- ------- -----------------
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3. Use of proceeds of the Notes:
4. Proposed day for the closing of the purchase and sale of the Notes:
5. The purchase price of the Notes is to be transferred to:
Name, Address
and ABA Routing Number of
Number of Bank Account
--------------- ---------
6. The Company certifies (a) that the representations and warranties
contained in paragraph 8 of the Agreement are true on and as of the date
of this Request for Purchase except to the extent of changes caused by
the transactions contemplated in the Agreement and, (b) that there exists
on the date of this Request for Purchase no Event of Default or Default.
7. The Issuance Fee to be paid pursuant to the Agreement will be paid by
the Company on the closing date.
XXXXXXX FAMILY RESTAURANTS,
L.P., BY ITS SOLE GENERAL
PARTNER, XXXXXXX MANAGEMENT
COMPANY, INC.
By:
------------------------------
Title
ATTEST:
By:
------------------------------
Title
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XXXXXXX RESTAURANTS
OPERATING COMPANY, L.P.,
BY ITS SOLE GENERAL PARTNER,
XXXXXXX MANAGEMENT COMPANY, INC.
By:
------------------------------
Title
ATTEST:
By:
------------------------------
Title
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71
EXHIBIT C
FORM OF CONFIRMATION OF ACCEPTANCE
XXXXXXX FAMILY RESTAURANTS, X.X.
XXXXXXX RESTAURANTS OPERATING COMPANY, L.P.
Reference is made to the Note Purchase and Private Shelf Agreement (the
"Agreement"), dated as of December 13, 1995, between Xxxxxxx Family
Restaurants, L.P. and Xxxxxxx Restaurants Operating Company, L.P.
(collectively, the "Partnerships"), on the one hand, and The Prudential
Insurance Company of America and each Prudential Affiliate which becomes a
party thereto, on the other hand. All terms used herein that are defined in
the Agreement have the respective meanings specified in the Agreement.
Pursuant to paragraph 2B(6) of the Agreement, an Acceptance with respect
to the following Accepted Notes is hereby confirmed:
I. Aggregate principal amount $_________
(A) (a) Name of Purchaser:
(b) Principal Amount:
(c) Final maturity date:
(d) Principal installment dates and amounts:
(e) Interest rate:
(f) Interest payment period:
(B) (a) Name of Purchaser:
(b) Principal Amount:
(c) Final maturity date:
(d) Principal installment dates and amounts:
(e) Interest rate:
(f) Interest payment period:
[(C), (D).....: same information as to any other Purchaser]
II. Closing Day: _____________________
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72
XXXXXXX FAMILY RESTAURANTS,
L.P., BY ITS SOLE GENERAL
PARTNER, XXXXXXX MANAGEMENT
COMPANY, INC.
By:
------------------------------
Title
ATTEST:
By:
------------------------------
Title
XXXXXXX RESTAURANTS OPERATING
COMPANY, L.P., BY ITS SOLE GENERAL
PARTNER, XXXXXXX MANAGEMENT
COMPANY, INC.
By:
------------------------------
Title
ATTEST:
By:
------------------------------
Title
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
By:
--------------------------
Vice President
[Signature block for each named purchaser other than Prudential]
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EXHIBIT D-1
[FORM OF OPINION OF COMPANY'S COUNSEL]
[Letterhead of ________________]
[Date of Closing]
The Prudential Insurance Company of America
c/o Prudential Capital Group
Four Gateway Center
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000
Ladies and Gentlemen:
As General Counsel of Xxxxxxx Family Restaurants, L.P. and Xxxxxxx
Restaurants Operating Company, L.P. (collectively, the "Partnerships") and
Xxxxxxx Management Company, Inc. (the "General Partner"), I am familiar with
the Note Purchase and Private Shelf Agreement, dated as of December __, 1995
(the "Agreement") between the Partnerships, on the one hand, and The Prudential
Insurance Company of America and each Prudential Affiliate which becomes a
party thereto, on the other hand, pursuant to which the Partnerships have
issued to you today their Senior Series A Notes in the aggregate principal
amount of $20,000,000 (the "Notes"). Capitalized terms used and not otherwise
defined herein shall have the meanings provided in the Agreement. This letter
is being delivered to you in satisfaction of the condition set forth in
paragraph 3A(v) of the Agreement and with the understanding you are purchasing
the Notes in reliance on the opinions expressed herein.
In this connection, I have examined such certificates of public officials,
certificates of officers of the General Partner and copies certified to my
satisfaction of documents and records of the General Partner and the
Partnerships and of other papers, and have made such other investigations, as I
have deemed relevant and necessary as a basis for my opinion hereinafter set
forth. I have relied upon such certificates of public officials
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74
and of officers of the General Partner and the Partnerships with respect to the
accuracy of material factual matters contained therein which were not
independently established. With respect to the opinion expressed in paragraph
4 below, I have also relied upon the representation made by you in paragraph 9
of the Agreement.
Based on the foregoing, it is my opinion that:
1. Each Partnership is a limited partnership duly organized and validly
existing in good standing under the laws of the State of Delaware and is duly
qualified as a foreign limitedpartnership and in good standing in each
jurisdiction where its ownership of property or the nature of the business
transacted by it makes such qualification necessary except where the failure to
so qualify would not have a material adverse effect on the business, financial
condition or operations of Partnerships and the Subsidiaries taken as a whole.
Each Partnership has the General Partner as its sole general partner. Each
Partnership has the corporate power to carry on their respective businesses as
now being conducted. Neither Partnership has any Restricted Subsidiaries.
2. The General Partner is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware and is duly
qualified as a foreign corporation and in good standing in each jurisdiction
where its ownership of property or the nature of the business transacted by it
makes such qualifications necessary, except where the failure so to qualify
would not have a material adverse effect on its business, financial condition
or operations. The General Partner is a wholly-owned indirect subsidiary of
The Restaurant Company. The General Partner has the corporate power and
authority to carry on its business as now being conducted.
3. The Agreement and the Notes have been duly authorized by all requisite
corporate action and duly executed and delivered by authorized officers of the
General Partner, and are valid joint and several obligations of the
Partnerships, legally binding upon and enforceable against the Partnerships in
accordance with their respective terms, except as such enforceability may be
limited by (a) bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights generally and (b) general
principles of equity (regardless of whether such enforceability is considered
in a
D-1-74
75
proceeding in equity or at law). No approval of the limited partners of the
Partnerships in connection with the execution and delivery of the Notes is
required by law or by the partnership agreements or the certificates of limited
partnership of the Partnerships.
4. It is not necessary in connection with the offering, issuance, sale
and delivery of the Notes under the circumstances contemplated by the Agreement
to register the Notes under the Securities Act or to qualify an indenture in
respect of the Notes under the Trust Indenture Act of 1939, as amended.
5. The extension, arranging and obtaining of the credit represented by
the Notes do not result in any violation of regulation G, T or X of the Board
of Governors of the Federal Reserve System.
6. The execution and delivery of the Agreement and the Notes, the
offering, issuance and sale of the Notes and fulfillment of and compliance with
the respective provisions of the Agreement and the Notes do not conflict with,
or result in a breach of the terms, conditions or provisions of, or constitute
a default under, or result in any violation of, or result in the creation of
any Lien upon any of the properties or assets of either of the Partnerships
pursuant to, or require any authorization, consent, approval, exemption, or
other action by or notice to or filing with any court, administrative or
governmental body or other Person (other than routine filings after the date
hereof with the Securities and Exchange Commission and/or state Blue Sky
authorities) pursuant to, the charter or by-laws of the Company or any of its
Subsidiaries, any
D-1-75
76
applicable law (including any securities or Blue Sky law), statute, rule or
regulation or (insofar as is known to us after having made due inquiry with
respect thereto) any agreement (including, without limitation, any agreement
listed in Exhibit E to the Agreement), instrument, order, judgment or decree to
which either of the Partnerships or any of its Subsidiaries is a party or
otherwise subject.
7. A state of federal court sitting in, or applying the law of, the State
of Tennessee would uphold the choice of New York law as the governing law of
the Notes.
Very truly yours,
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77
EXHIBIT D-2
[FORM OF OPINION OF COMPANY'S COUNSEL]
[Letterhead of ________________]
[Date of Closing]
The Prudential Insurance Company of America
c/o Prudential Capital Group
Four Gateway Center
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000
Ladies and Gentlemen:
As General Counsel of Xxxxxxx Family Restaurants, L.P. and Xxxxxxx
Restaurants Operating Company, L.P. (collectively, the "Partnerships") and
Xxxxxxx Management Company, Inc. (the "General Partner"), I am familiar with
the Note Purchase and Private Shelf Agreement, dated as of December __, 1995
(the "Agreement") between the Partnerships, on the one hand, and The Prudential
Insurance Company of America and each Prudential Affiliate which becomes a
party thereto, on the other hand, pursuant to which the Partnerships have
issued to you today their Senior Series ___ Notes in the aggregate principal
amount of $_________ (the "Notes"). Capitalized terms used and not otherwise
defined herein shall have the meanings provided in the Agreement. This letter
is being delivered to you in satisfaction of the condition set forth in
paragraph 3A(v) of the Agreement and with the understanding you are purchasing
the Notes in reliance on the opinions expressed herein.
In this connection, I have examined such certificates of public officials,
certificates of officers of the General Partner and copies certified to my
satisfaction of documents and records of the General Partner and the
Partnerships and of other papers, and have made such other investigations, as I
have deemed relevant and necessary as a basis for my opinion hereinafter set
forth. I have relied upon such certificates of public officials
D-1-77
78
and of officers of the General Partner and the Partnerships with respect to the
accuracy of material factual matters contained therein which were not
independently established. With respect to the opinion expressed in paragraph
4 below, I have also relied upon the representation made by you in paragraph 9
of the Agreement.
Based on the foregoing, it is my opinion that:
1. Each Partnership is a limited partnership duly organized and validly
existing in good standing under the laws of the State of Delaware and is duly
qualified as a foreign limitedpartnership and in good standing in each
jurisdiction where its ownership of property or the nature of the business
transacted by it makes such qualification necessary except where the failure to
so qualify would not have a material adverse effect on the business, financial
condition or operations of Partnerships and the Subsidiaries taken as a whole.
Each Partnership has the General Partner as its sole general partner. Each
Partnership has the corporate power to carry on their respective businesses as
now being conducted. Neither Partnership has any Restricted Subsidiaries.
2. The General Partner is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware and is duly
qualified as a foreign corporation and in good standing in each jurisdiction
where its ownership of property or the nature of the business transacted by it
makes such qualifications necessary, except where the failure so to qualify
would not have a material adverse effect on its business, financial condition
or operations. The General Partner is a wholly-owned indirect subsidiary of
The Restaurant Company. The General Partner has the corporate power and
authority to carry on its business as now being conducted.
3. The Agreement and the Notes have been duly authorized by all requisite
corporate action and duly executed and delivered by authorized officers of the
General Partner, and are valid joint and several obligations of the
Partnerships, legally binding upon and enforceable against the Partnerships in
accordance with their respective terms, except as such enforceability may be
limited by (a) bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights generally and (b) general
principles of equity (regardless of whether such enforceability is considered
in a
D-2-78
79
proceeding in equity or at law). No approval of the limited partners of the
Partnerships in connection with the execution and delivery of the Notes is
required by law or by the partnership agreements or the certificates of limited
partnership of the Partnerships.
4. It is not necessary in connection with the offering, issuance, sale
and delivery of the Notes under the circumstances contemplated by the Agreement
to register the Notes under the Securities Act or to qualify an indenture in
respect of the Notes under the Trust Indenture Act of 1939, as amended.
5. The extension, arranging and obtaining of the credit represented by
the Notes do not result in any violation of regulation G, T or X of the Board
of Governors of the Federal Reserve System.
6. The execution and delivery of the Agreement and the Notes, the
offering, issuance and sale of the Notes and fulfillment of and compliance with
the respective provisions of the Agreement and the Notes do not conflict with,
or result in a breach of the terms, conditions or provisions of, or constitute
a default under, or result in any violation of, or result in the creation of
any Lien upon any of the properties or assets of either of the Partnerships
pursuant to, or require any authorization, consent, approval, exemption, or
other action by or notice to or filing with any court, administrative or
governmental body or other Person (other than routine filings after the date
hereof with the Securities and Exchange Commission and/or state Blue Sky
authorities) pursuant to, the charter or by-laws of the Company or any of its
Subsidiaries, any
D-2-79
80
applicable law (including any securities or Blue Sky law), statute, rule or
regulation or (insofar as is known to us after having made due inquiry with
respect thereto) any agreement (including, without limitation, any agreement
listed in Exhibit E to the Agreement), instrument, order, judgment or decree to
which either of the Partnerships or any of its Subsidiaries is a party or
otherwise subject.
7. A state of federal court sitting in, or applying the law of, the State
of Tennessee would uphold the choice of New York law as the governing law of
the Notes.
Very truly yours,
D-2-80
81
EXHIBIT E
1. Amended and Restated Revolving Credit Agreement dated as of June 29,
1994 among the Partnerships, The First National Bank of Boston, the Bank of
Tokyo, Ltd. and First American National Bank, as amended by Amendment No. 1
dated as of November 3, 1995.
2. Note Facility Agreement dated as of May 29, 1992 among the Partnerships
and the Prudential Insurance Company of America.
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EXHIBIT F
FRANCHISES
AND
DEFAULTS UNDER FRANCHISES
A. List of Franchisees and Locations
See Attached schedule F-1
B. Defaults Under Franchises
Name Location
---- --------
Xxxxx and Xxxxx Xxxxxxxxx Xxxxxx, WA
D-2-82
