Exhibit 10.46
PURCHASE AGREEMENT
This purchase agreement (the "Agreement") is made and entered into as of
the 7th day of November, 1997 by and between Xxxxx X. Xxxx and Xxxx X. Xxxxxx
(each a "Seller" and collectively, the "Sellers"), and Boston Chicken, Inc., a
Delaware corporation (the "Purchaser" or "BCI").
Recitals
Progressive Food Concepts, Inc., a Delaware corporation formerly known as
HFMI Acquisition Corporation ("PFCI") was organized in January 1997. On August
27, 1997, each of the Sellers entered into a purchase agreement (the "Original
Purchase Agreement") with BCI pursuant to which BCI, among other things,
acquired from Sellers (i) a portion of the shares of common stock of PFCI held
by them and (ii) an option to acquire the remaining shares of PFCI held by
Sellers. Part of the consideration for the purchase under the Original Purchase
Agreement was the execution and delivery by BCI to each of the Sellers a
promissory note, each dated August 27, 1997, and each in the principal amount of
$3,181,480 (individually, a "Note" and collectively, the "Notes"). The Notes
are payable September 26, 1998 and are payable, at BCI's option, in cash or
shares of BCI.
Each of the Sellers desires to sell to the Purchaser, and the Purchaser
desires to purchase from each of the Sellers, on the terms and conditions
hereinafter set forth, the remaining shares of common stock of PFCI held by
them.
Covenants
In consideration of the mutual representations, warranties and covenants
and subject to the conditions herein contained, the parties hereto agree as
follows:
1.0 Purchase and Sale of Shares
1.1 Each of the Sellers severally agrees to sell, transfer, assign
and deliver to the Purchaser at the Closing (as defined herein), and the
Purchaser agrees to purchase and accept from each of the Sellers, on the terms
and subject to the conditions set forth in this Agreement, 333.3335 shares of
common stock of PFCI, for a total of 666.667 shares (the "Shares"), free and
clear of all liens, claims, charges, security interests, restrictions on
transfer (other than restrictions under federal and state securities laws),
options, warrants, voting trusts and any other encumbrances of any kind
whatsoever ("Encumbrances").
1.2 As consideration for the Shares (the "Purchase Price"), the
Purchaser agrees, on the terms and subject to the conditions set forth in this
Agreement, to pay to or for the account of each Seller $354,147.17 in cash. In
addition, Purchaser agrees to prepay at Closing a portion of the Notes equal to
one-half of the principal amount of such Notes plus all interest accrued thereon
through the Closing Date. Upon such prepayment, the Sellers will cancel the
Notes and accept, in their place and stead, amended and restated promissory
notes in the form shown on Exhibit A attached hereto.
2.0 Closing
2.1 The closing of the purchase and sale of the Shares shall take
place at the offices of BCI in Golden, Colorado at 10:00 A.M., local time, on
November 7, 1997, or at such other place or on such other date as may be
mutually agreed by the Sellers and Purchaser. Throughout this Agreement, such
event is referred to as the "Closing" and such date and time are referred to as
the "Closing Date."
2.2 At the Closing:
2.2.1 The Sellers shall deliver to the Purchaser:
2.2.1.1 a copy of the amended and restated certificate of
incorporation of PFCI (the "Certificate of Incorporation"),
certified as of a date not more than ten business days prior to
the Closing Date by the Secretary of State of Delaware, and a
copy of the bylaws of PFCI (the "Bylaws"), certified as of the
Closing Date by the Secretary or Assistant Secretary of PFCI; and
2.2.1.2 certificates evidencing the Shares, each of which
shall have the assignment provisions appearing on the reverse
thereof completed and executed in favor of BCI and accompanied by
stock powers duly executed in blank.
2.2.2 The Purchaser shall deliver to the Sellers:
2.2.2.1 the Purchase Price, by wire transfer of
immediately available funds to accounts designated by the
respective Sellers; and
2.2.2.2 a resolution of the Board of Directors of BCI
authorizing BCI to enter into this Agreement and to consummate
the transactions contemplated hereby.
2.3 Within 10 days after Closing, Sellers shall deliver to Purchaser
a certificate of good standing of PFCI, certified as of a date not more than ten
business days after the Closing Date by the Secretary of State of Delaware.
3.0 Representations and Warranties of the Sellers
In order to induce the Purchaser to enter into this Agreement and to
purchase the Shares, each of the Sellers severally represents and warrants to
the Purchaser as follows:
3.1 This Agreement has been duly executed and delivered by such
Seller. This Agreement is a valid and legally binding obligation of such
Seller, enforceable in accordance with its terms.
3.2 The authorized capital stock of PFCI consists of 100,000 shares
of common stock, $.01 par value, 8,666,667 shares of which are issued and
outstanding, and 50,000 shares of preferred stock, $.01 par value, none of which
are issued and outstanding. There are no outstanding warrants, options or
rights of any kind to acquire from PFCI or such Seller any stock or securities
of any kind, and there are no pre-emptive rights with respect to the issuance or
sale
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of shares of PFCI. To the knowledge of the Sellers, PFCI has no obligation to
acquire any of its issued and outstanding stock or any other security issued by
it from any holder thereof. All of the Shares owned by such Seller will be
fully paid and nonassessable and delivery of the Shares by such Seller will vest
title to all of such Shares in the Purchaser, free and clear of all Encumbrances
(other than restrictions under federal and state securities laws and
Encumbrances created by the Purchaser).
3.3 Neither the execution, delivery and performance of this Agreement
by such Seller, nor the consummation by it of the transactions contemplated
hereby, will, to the knowledge of such Seller, violate any applicable law or
regulation, or any order, writ, injunction, or decree of the United States or
any court, arbitrator, or governmental or regulatory official, body,
subdivision, instrumentality, agency or authority, whether federal, state or
local ("Governmental Body"), or will conflict or be inconsistent with or result
in any breach of any of the terms, covenants, conditions or provisions of, or
constitute a default under, any agreement to which such Seller is a party or by
which he is bound. To the knowledge of the Seller, no permit, consent,
approval, or authorization of, or declaration to or filing with, any
Governmental Body or any other person, except for the consent of PFCI (which was
granted August 27, 1997), is necessary for the execution and delivery by such
Seller of this Agreement or for the consummation by such Seller of the
transactions contemplated hereby.
3.4 Such Seller has no obligation to pay any fees or commissions to
any investment banker, broker, finder or agent with respect to the transactions
contemplated by this Agreement.
4.0 Representations and Warranties of the Purchaser
In order to induce each of the Sellers to enter into this Agreement
and to sell the Shares, the Purchaser represents and warrants as follows:
4.1 The Purchaser is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware. The Purchaser has
the power to execute, deliver and perform its obligations under the terms of
this Agreement and has taken all necessary corporate action to authorize the
execution, delivery and performance of this Agreement.
4.2 This Agreement has been duly executed and delivered by the
Purchaser. This Agreement is a valid and legally binding obligation of the
Purchaser, enforceable in accordance with its terms. Neither the execution and
delivery of this by the Purchaser nor the consummation by it of the transactions
contemplated hereby, will, to the knowledge of the Purchaser, violate any
applicable law or regulation, or any order, writ, injunction, or decree of any
Governmental Body, or will conflict or be inconsistent with or result in any
breach of any of the terms, covenants, conditions or provisions of, or
constitute a default under, any agreement to which the Purchaser is a party or
by which it is bound. To the knowledge of the Purchaser, no permit, consent,
approval or authorization of, or declaration to or filing with, any Governmental
Body or any other person is required in connection with the execution and
delivery of this Agreement by the Purchaser and the consummation by it of the
transactions contemplated hereby.
4.3 The Purchaser has no obligation to pay any fees or commissions to
any investment banker, broker, finder or agent with respect to the transactions
contemplated by this Agreement.
4.4 The Purchaser understands that the Shares have not been
registered under the 1933 Act and, therefore, cannot be sold or transferred
unless either they are subsequently registered under such Act (as well as under
any applicable state securities laws) or an exemption
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from such registration is available. The Purchaser understands that any
certificate or certificates representing the Shares shall bear a legend to such
effect. The Shares are being acquired by the Purchaser not with a view to any
distribution or resale thereof in any transaction which would be in violation of
the 1933 Act and the rules promulgated thereunder, or any state securities
statute.
4.5 The Purchaser is an accredited investor within the meaning of
Regulation D under the Securities Act of 1933.
5.0 Indemnification
5.1 Each of the Sellers severally agrees to indemnify, defend and
hold harmless the Purchaser, its officers, employees and agents, (collectively,
the "Purchaser Indemnified Persons"), from and against all losses, claims,
damages, liabilities, expenses (including legal fees and expenses), judgments,
fines, settlements and other amounts incurred or suffered by the Purchaser or
the Purchaser Indemnified Persons and arising out of the inaccuracy of any of
the representations and warranties made by such Seller in this Agreement or any
breach by such Seller of this Agreement. The Purchaser agrees that neither it
nor the Purchaser Indemnified Persons shall seek against the Seller, nor shall
the Sellers be liable for, any consequential, punitive, special or exemplary
damages for any breach of this Agreement or the agreements and transactions
contemplated hereby.
5.2 The Purchaser agrees to indemnify, defend and hold harmless each
of the Sellers from and against all losses, claims, damages, liabilities,
expenses (including legal fees and expenses), judgments, fines, settlements and
other amounts incurred or suffered by the Sellers and arising out of the
inaccuracy of any of the representations and warranties made by the Purchaser in
this Agreement or any breach by the Purchaser of this Agreement. Each of the
Sellers agrees that he shall not seek against the Purchaser or the Purchaser
Indemnified Persons, nor shall the Purchaser or the Purchaser Indemnified
Persons be liable for, any consequential, punitive, special or exemplary damages
for any breach of this Agreement or the agreements and transactions contemplated
hereby.
5.3 Any person entitled to indemnification hereunder will give prompt
written notice to the indemnifying person of any claim with respect to which it
seeks indemnification and, unless in such indemnified person's reasonable
judgment a conflict of interest between such indemnified and indemnifying
persons may exist with respect to such claim, permit such indemnifying person to
assume the defense of such claim with counsel reasonably satisfactory to the
indemnified person. If such defense is assumed, the indemnifying person will
not be subject to any liability for any settlement made by the indemnified
person without its or his consent (but such consent will not be unreasonably
withheld). An indemnifying person who is not entitled to, or elects not to,
assume the defense of a claim will not be obligated to pay the fees and expenses
of more than one counsel for all parties indemnified by such indemnifying person
with respect to such claim, unless in the reasonable judgment of such counsel a
conflict of interest may exist between such indemnified person and any other of
such indemnified persons with respect to such claim.
6.0 Conditions
6.1 The obligations of the parties to consummate the purchase and
sale of the Shares shall be subject to the satisfaction or waiver of the
following conditions:
6.1.1 The respective deliveries of the parties contemplated by
Section 2.2 shall have occurred at or prior to the Closing.
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7.0 Miscellaneous
7.1 The representations, warranties, covenants and indemnification
agreements contained herein are continuing in nature and the representations and
warranties of the parties shall survive until the first anniversary of the date
hereof except the representations and warranties in the last two sentences of
Section 3.2, which shall survive until the third anniversary of the date hereof,
regardless of any investigation made by or on behalf of any party to this
Agreement.
7.2 The parties hereto may amend, modify and supplement this
Agreement in such manner as may be agreed upon by them in writing.
7.3 Each party to this Agreement shall pay all of the expenses
incurred by it in connection with this Agreement, including without limitation
its legal and accounting fees and expenses, and the commissions, fees and
expenses of any person employed or retained by it to bring about, or to
represent it in, the transactions contemplated hereby.
7.4 This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns.
7.5 This instrument and the exhibits and schedules attached hereto
contain the entire agreement of the parties hereto with respect to the purchase
of the Shares, and supersede all prior understandings and agreements of the
parties with respect to the subject matter hereof.
7.6 The descriptive headings in this Agreement are inserted for
convenience only and do not constitute a part of this Agreement.
7.7 This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original.
7.8 All notices provided for in this Agreement shall be in writing,
duly signed by the party giving such notice, and shall be sent by Federal
Express or other reliable overnight courier, sent by fax or mailed by registered
or certified mail, return receipt requested, as follows:
If to one of the Sellers, addressed to such party at:
Xxxxx X. Xxxx
c/o Boston Chicken, Inc.
00000 Xxxxxx Xxxx Xxxxxxx
Xxxxxx, XX 00000
Xxxx X. Xxxxxx
c/o Boston Chicken, Inc.
00000 Xxxxxx Xxxx Xxxxxxx
Xxxxxx, XX 00000
If to the Purchaser, addressed to:
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Boston Chicken, Inc.
00000 Xxxxxx Xxxx Xxxxxxx
Xxxxxx, XX 00000
or at such other address as the recipient may specify from time to
time in writing. Each notice shall be deemed to have been given upon the
earlier of the receipt of such notice by the intended recipient thereof, two
days after it is sent by Federal Express or other reliable overnight courier or
sent by fax, or five days after it is mailed by registered or certified mail,
return receipt requested.
7.9 The Company agrees to use reasonable best efforts to assist each
of the Sellers in connection with any proposal of such Seller to transfer any of
the Notes, including by providing appropriate certifications as to factual
matters and similar actions, provided that the Company shall not be obligated to
pay any money or incur any additional monetary obligation or liability
hereunder.
7.10 This Agreement shall be governed by and construed in accordance
with the laws of the State of Colorado applicable to contracts made and to be
performed therein.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the day and year first above written.
/s/ Xxxxx X. Xxxx
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Xxxxx X. Xxxx
/s/ Xxxx X. Xxxxxx
----------------------------------------------
Xxxx X. Xxxxxx
Boston Chicken, Inc.
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------------
Name: Xxxxxxx X. Xxxxxx
-----------------------------------------
Its: Vice President
------------------------------------------
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Exhibit A
NEITHER THIS PROMISSORY NOTE NOR THE SHARES DESCRIBED IN THIS PROMISSORY
NOTE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT") OR UNDER
THE SECURITIES LAWS OF ANY STATE AND THEY MAY NOT BE SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF EXCEPT IN ACCORDANCE WITH THIS PROMISSORY NOTE AND UNLESS
EITHER (A) THEY ARE REGISTERED UNDER THE ACT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT OR (B) BOSTON CHICKEN, INC. HAS RECEIVED EVIDENCE
SATISFACTORY TO IT THAT SUCH PROPOSED DISPOSITION IS EXEMPT FROM SUCH
REGISTRATION.
THE UNDERSIGNED WAIVES THE RIGHT TO ASSERT AGAINST ANY ASSIGNEE OF THE
HOLDER, OR ANY SUBSEQUENT ASSIGNEE, ANY DEFENSE, COUNTERCLAIM, OR SETOFF THAT
THE UNDERSIGNED COULD ASSERT AGAINST THE HOLDER IN AN ACTION BROUGHT BY THE
HOLDER UPON THIS NOTE OTHER THAN ANY DEFENSE, COUNTERCLAIM, OR SETOFF TO WHICH A
HOLDER IN DUE COURSE WOULD BE SUBJECT UNDER THE COLORADO UNIFORM COMMERCIAL
CODE.
AMENDED AND RESTATED PROMISSORY NOTE
$1,590,740 November 7, 1997
Golden, Colorado
For value received, the undersigned hereby promises to pay to the order of
Xxxxx X. Xxxx (the "Holder"), on March 21, 1999, the principal amount of one
million five hundred ninety thousand seven hundred forty dollars ($1,590,740),
together with interest thereon as provided herein.
This Note is issued in exchange of and replacement for, and evidences the
same indebtedness incurred to the date hereof, under that certain Promissory
Note, dated August 27, 1997, from the undersigned in favor of Holder.
This Note shall bear interest from August 27, 1997 at a rate of 9.5% per
annum. Interest shall be payable quarterly on March 31, June 30, September 30
and December 31 of each year and at maturity. Interest shall be calculated for
actual days elapsed on the basis of a 360-day year. If any payment of principal
of, or interest on, or any other amount owed by the undersigned under this Note
becomes due and payable on other than a Business Day (as defined below), the
maturity thereof shall be extended to the next succeeding Business Day. The term
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"Business Day" means any day that is not a Saturday, Sunday or legal holiday in
Golden, Colorado on which banks are not authorized or required to be closed.
This Note shall be payable at the offices of Boston Chicken, Inc. (the
"Company"), 00000 Xxxxxx Xxxx Xxxxxxx, Xxxxxx, Xxxxxxxx, or such other place in
the United States of America as the lawful holder hereof may from time to time
in writing designate.
The principal amount of this Note and any accrued interest due on the
payment date or otherwise may be paid at the Company's option in (x) lawful
money of the United States of America in immediately available funds (the
"Cash"), (y) shares (the "Shares") of common stock, $.01 par value per share, of
the Company (the "Common Stock") valued at the average of the closing sales
prices per share of the Common Stock quoted on the Nasdaq National Market, or,
in the event the Common Stock is not quoted on the Nasdaq National Market, on
such other securities exchange on which the Common Stock is then traded, as
reported in the Wall Street Journal (Western Edition), for the five (5) trading
days immediately prior to the second Business Day before the date of payment
(the "Average Price"), freely transferable by such Holder for a period of at
least 30 days from the date on which the Shares are delivered to or for the
account of the Holder (the "Date of Payment"), if such Holder is not an
Affiliate (as hereinafter defined) of the Company, or for a period of 365 days
from the Date of Payment, if such Holder is an Affiliate of the Company,
pursuant to an effective registration statement under the Act covering the
resale by such Holder of the Shares (the "Registration Statement") and approved
for listing on the Nasdaq National Market or such other securities exchange on
which the Common Stock is then listed or traded or (z) a combination of Cash and
Shares, determined with reference to the preceding clauses (x) and (y).
If during the 30-day period or 365-day period, as applicable, after the
Date of Payment there occurs any development or event which requires an
amendment to the Registration Statement or a supplement to the related
prospectus (the "Resale Prospectus") (in each case as amended or supplemented)
so that they will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements contained therein, in light of the circumstances under which they
were made, not misleading: (i) the Company shall immediately notify the Holder
of the occurrence of such development or event; (ii) upon receipt of such
notice, the Holder shall discontinue dispositions of the Shares until the Holder
shall have received copies of the amended or supplemented Resale Prospectus
contemplated above or been advised by the Company in writing that use of the
Resale Prospectus may be resumed; (iii) as promptly as practicable, but not
later than one hundred twenty (120) days after such notice, the Company shall
take such action as is necessary to amend the Registration Statement or
supplement the prospectus to permit sales of the Shares to be made thereunder
and shall furnish such amended or supplemented Resale Prospectus in reasonable
quantities (as thereafter deliverable to the purchasers of Shares) to the Holder
so that such Resale Prospectus will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements contained therein, in light of the
circumstances under which they were made, not misleading; and (iv) the 30-day
period or 365-day period, as applicable, shall be extended by the number of days
during which the Holder is
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required to discontinue dispositions of the Shares, but such extension shall not
increase the respective periods beyond a total of 30 days or 365 days, as the
case may be.
In the event (i) the Holder is not an Affiliate of the Company and the
Holder sells all of the Shares delivered to the Holder in connection with any
payment of principal and/or interest as provided in the fourth paragraph of this
Note within the first ten (10) trading days on which the Nasdaq National Market
is open for business immediately following the Date of Payment (the "Guarantee
Period") for cash in one or more bona fide broker's or market maker transactions
in accordance with Rule 145 under the 1933 Act, through or to Xxxxxxx Lynch,
Pierce, Xxxxxx and Xxxxx Incorporated ("Xxxxxxx Xxxxx"), to one or more persons
not affiliated with, related to, or associated with the Holder, in which the
Holder has instructed Xxxxxxx Xxxxx to make a good faith effort to maximize the
selling price; (ii) the average price per share received in such sales, net of
broker's commissions, is less than the Average Price (such difference being
referred to herein as the "Per-Share Shortfall"); and (iii) the Company receives
notice from the Holder within five (5) days of the expiration of the Guarantee
Period of the amount of the Per-Share Shortfall, the Company shall pay to the
Holder, within five (5) business days of receipt of the applicable confirmation
slips, an amount, in cash or Shares of Common Stock (valued as provided in the
following paragraph) at the Company's option, equal to the Per-Share Shortfall
multiplied by the number of Shares sold during the Guarantee Period (the
"Shortfall Amount").
In the event the Company elects to pay the Shortfall Amount under the
preceding paragraph in Shares of Common Stock (the "Shortfall Shares"), the
number of Shortfall Shares to be delivered to the Holder shall be determined by
dividing the Shortfall Amount by the average closing sales price per share of
the Common Stock quoted on the Nasdaq National Market, as reported in the Wall
Street Journal (Western Edition), for the five (5) trading days immediately
prior to the last business day before the date on which the Company delivers the
Shortfall Shares to the Holder. Any Shortfall Shares so delivered shall also be
freely transferable for a period of 30 days from the date of their payment by
such Holder pursuant to an effective registration statement under the Act
covering the resale by such Holder of the Shares and approved for listing on the
Nasdaq National Market or the securities exchange on which the Common Stock is
then listed or traded. The provisions of the fourth and fifth paragraphs of
this Promissory Note shall apply, mutatis mutandis, to the registration under
the Act of such Shortfall Shares.
The Company agrees to reimburse, to the extent permitted by law, the
Holder, its directors, officers, employees and agents, and each person, if any,
who controls the Holder within the meaning of the Act, for any and all losses,
claims, damages, expenses and liabilities to which they or any of them may
become subject under the Act or any other statute or common law or otherwise by
reason of its offer and sale of the Shares or Shortfall Shares, and to reimburse
the Holder for any reasonable legal or other expenses actually and reasonably
incurred in connection with investigating any claims and defending any actions,
insofar as such losses, claims, damages, expenses, liabilities, or actions arise
out of, or are based upon:
(i) any untrue statement of a material fact or any alleged untrue
statement of a material fact contained in or incorporated by reference in the
Registration Statement or any post-effective amendment thereto, or the omission
or alleged omission to state therein a material fact
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required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading; or
(ii) any untrue statement of a material fact or any alleged untrue
statement of a material fact contained or incorporated by reference in the
Resale Prospectus (as amended or supplemented if the Company shall have filed
with the Securities and Exchange Commission any amendment or supplement
thereto), if used within the period during which the Company is required to keep
the Registration Statement and Resale Prospectus current, or the omission or
alleged omission to state therein a material fact necessary in order to make the
statements contained therein, in light of the circumstances under which they
were made, not misleading;
provided, however, that the Company's obligations contained herein shall not
apply to losses, claims, damages, expenses, liabilities, or actions arising out
of, or based upon any such untrue statement or any such omission or alleged
omission, if such statement or omission was made in reliance upon, and in
conformity with, information relating to the Holder furnished to the Company by
the Holder expressly for use in connection with the preparation of the
Registration Statement or any Resale Prospectus or any such amendment or
supplement thereto.
The Holder, by its acceptance of this Promissory Note, shall (in the same
manner and to the same extent as set forth in the preceding paragraph),
reimburse, to the extent permitted by law, the Company, its directors, officers,
employees and agents, and each person, if any, who controls the Company within
the meaning of the Act, if such statement or omission was made in reliance upon
and in conformity with information relating to the Holder furnished to the
Company by the Holder expressly for use in connection with the preparation of
the Registration Statement or the Resale Prospectus or any amendment or
supplement thereto.
Any person entitled to reimbursement hereunder will (i) give written notice
to the reimbursing party of any claim with respect to which it seeks
reimbursement within 14 days of the person entitled to reimbursement receiving
notice thereof (provided, however, that any failure by a person entitled to
reimbursement hereunder to give such prompt written notice shall not adversely
affect such person's rights hereunder unless and then only to the extent that
such failure prejudices the rights of the reimbursing party hereunder) and (ii)
unless in such party's reasonable judgment a conflict or interest between such
party and the reimbursing parties may exist with respect to such claim, permit
such reimbursing party to assume the defense of such claim with counsel
reasonably satisfactory to the party being reimbursed. If such defense is
assumed, the reimbursing party will not be subject to any liability for any
settlement made by the party being reimbursed without its consent (but such
consent will not be unreasonably withheld). A reimbursing party who is not
entitled to, or elects not to, assume the defense of a claim will not be
obligated to pay the fees and expenses of more than one counsel for all parties
being reimbursed by such reimbursing party with respect to such claim, unless in
the reasonable judgment of such counsel a conflict of interest may exist between
such party being reimbursed and any other of such reimbursed parties with
respect to such claim.
If the reimbursement provided for herein is unavailable to or insufficient
to hold harmless the party being reimbursed under the second and third preceding
paragraphs in respect of any
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losses, claims, damages, expenses or liabilities referred to therein, then each
applicable reimbursing party, in lieu of reimbursing such party, shall
contribute to the amount paid or payable by such party being reimbursed as a
result of such losses, claims, damages, expenses, or liabilities in such
proportion as is appropriate to reflect the relative fault of the Holder and the
Company in connection with the statements or omissions which resulted in such
losses, claims, damages, expenses, or liabilities. The relative fault of the
Holder and the Company shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the Holder
or by the Company, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The amount paid or payable by a party as a result of the losses, claims,
damages, expenses, and liabilities referred to above shall be deemed to include
any legal or other fees or expenses reasonably incurred by such party in
connection with investigating or defending any action or claim. The Holder, by
its acceptance hereof, and the Company agree that it would not be just and
equitable if contribution pursuant hereto were determined by pro rata allocation
or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the 0000 Xxx) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.
As used herein, the term "Affiliate" means, with respect to any specified
person, any other person directly or indirectly controlling or controlled by or
under direct or indirect common control with such specified person, for the
purposes of this definition, "control" when used with respect to any person
means the power to direct the management and policies of such person, directly
or indirectly, whether through the ownership of voting securities, by contract
or otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
The occurrence of any one of the following events shall constitute an event
of default ("Event of Default") under this Note: (a) if the undersigned fails to
pay the principal of this Note at the time and place when the same is due and
payable, (b) if the undersigned fails to pay any interest payment or Shortfall
Amount on this Note at the time and place when the same is due and such default
continues for a period of five days following receipt of notice of non-payment,
(c) if the undersigned breaches any covenant contained in this Note other than
the covenants to pay principal, and interest or the Shortfall Amount and such
breach is not cured within 10 business days of written notice thereof, or (d) if
the undersigned shall file a voluntary petition in bankruptcy, or shall be
adjudicated a bankrupt or insolvent, or shall file any petition or answer
seeking for itself any reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any present or future statute,
law or regulation, or shall file any answer admitting the material allegations
of a petition filed against it in any such proceeding, or if, within 60 days
after the commencement of any proceeding against the undersigned seeking any
reorganization, arrangement, composition, readjustment, liquidation, dissolution
or similar relief under any present or future statute, law or regulation, such
proceeding shall not have been dismissed or if, within 60 days after the
appointment without the consent or acquiescence of the
5
undersigned of any trustee, receiver or liquidator of the undersigned or of all
or any substantial part of its properties, such appointment shall not have been
vacated.
If an Event of Default has occurred (whether or not it is continuing),
then the holder of this Note shall have the right at its sole option and in
addition to any other available remedy, to declare this Note to be due and
payable, whereupon the same shall forthwith mature and become due and payable
without presentment, demand, protest or notice, all of which are hereby waived.
In the case of an Event of Default, all payments of principal, interest, the
Shortfall Amount or other payments under this Note, shall be made in Cash. In
case of a default in the payment of any principal of, or interest on, this Note,
the undersigned will pay the holder hereof such further amount as shall be
sufficient to cover the reasonable cost and expense of collection, including
without limitation reasonable attorneys' fees. No course of dealing and no
delay on the part of the holder hereof in exercising any right shall operate as
a waiver thereof or otherwise prejudice such holder's rights. The rights and
remedies of the holder hereof are cumulative and are not exclusive of any rights
or remedies it would otherwise have.
The Company covenants and agrees, and each holder of this Promissory Note,
whether upon original issue or upon transfer or assignment hereof, by such
holder's acceptance hereof likewise covenants and agrees, that upon the payment
or distribution of the assets of the Company of any kind or character, whether
in cash, property or securities, to creditors upon any dissolution, winding-up,
total or partial liquidation or reorganization of the Company (whether voluntary
or involuntary, or in bankruptcy, insolvency, reorganization, liquidation,
receivership proceedings, or upon an assignment for the benefit of creditors, or
any other marshaling of the assets and liabilities of the Company, or
otherwise), all Senior Indebtedness shall first be paid in full, in cash, or
have provision made for such payment, before any payment (other than in Shares
of Common Stock) is made other than in Shares of Common Stock on account of the
principal of or interest or Shortfall Amount on or other amounts due in respect
of the indebtedness evidenced by this Promissory Note. As used herein, the term
"Senior Indebtedness" means the principal of and premium, if any, and interest
(including, without limitation, any interest accruing subsequent to the filing
of a petition or other action concerning bankruptcy or other similar
proceedings, whether or not constituting an allowed claim in any such
proceedings) on, and fees, costs, enforcement expenses (including legal fees and
disbursements), collateral protection expenses and other reimbursement or
indemnity obligations in respect of, all indebtedness or obligations of the
Company to banks and other lending institutions for money borrowed or in respect
of credit or other banking or lease financing facilities, whether presently
outstanding or hereafter incurred or created and including any extensions,
renewals, modifications or amendments thereof, including, without limitation,
under (i) the Secured Revolving Credit Agreement dated as of December 9, 1996
among the Company, Bankers Trust Company, as Documentation Agent, Bank of
America Illinois, as Agent, and the Lenders named therein, (ii) the Facilities
Agreement dated as of December 9, 1996 among the Company, Bank of America
Illinois, as Agent for Certain Lenders and General Electric Capital Corporation,
(iii) Master Lease Agreement dated as of September 27, 1995 between the Company
and General Electric Capital Corporation, for itself and as agent for other
participants, as amended, and (iv) Master Lease Agreement No. 2 dated as of
December 9, 1996, between the Company and General Electric Capital Corporation,
for itself and as agent for other participants, and (v) any renewals,
6
extensions, refundings, restructurings, amendments or modifications of the
facilities referred to in (i), (ii), (iii) or (iv).
Upon the happening of a default in payment (whether at maturity or at a
date fixed for prepayment or by acceleration or otherwise) of the principal of
or interest on any Senior Indebtedness, as such default is defined under or in
respect of such senior Indebtedness or in any agreement pursuant to which such
Senior Indebtedness has been incurred (the relevant "Senior Debt Agreement"),
then, unless and until the amount of such Senior Indebtedness then due shall
have been paid in full or provision made therefor in a manner satisfactory to
the holders of such Senior Indebtedness, or such default shall have been cured
or waived or shall have ceased to exist, the Company shall not pay principal of
or interest or the Shortfall Amount on this Promissory Note and shall not
repurchase, redeem or otherwise retire this Promissory Note, in either case
other than in or for Shares of Common Stock (collectively, "payment of this
Promissory Note").
Upon the happening of an event of default with respect to any Senior
Indebtedness (other than under circumstances described in the immediately
preceding paragraph of this Promissory Note are applicable), as such event of
default is defined under the relevant Senior Debt Agreement, permitting the
holders thereof to immediately accelerate the maturity thereof, and upon written
notice thereof given to the Company and the Holder by any holders of such Senior
Indebtedness or their representative or any trustee therefor (a "Default
Notice"), then, unless and until such event of default shall have been cured or
waived in writing by the holders of such Senior Indebtedness or shall have
ceased to exist, no direct or indirect payment of this Promissory Note shall be
made; provided, however, that this paragraph shall not prevent the making of any
such payment (which is not otherwise prohibited by the immediately preceding
paragraph of this Promissory Note) for more than 89 days after the Default
Notice shall have been given unless the Senior Indebtedness in respect of which
such event of default exists has been declared due and payable in its entirety,
in which case no such payment may be made until such acceleration has been
waived, rescinded or annulled, or such Senior Indebtedness shall have been paid
in full, or payment thereof shall be duly provided for in cash or in any other
manner than one Default Notice shall be given with respect to the same issue of
Senior Indebtedness within a period 360 consecutive days, and no event of
default which existed or was continuing on the date of any Default Notice and
was known to the holders of such issue of Senior Indebtedness shall be made the
basis for the giving of a subsequent Default Notice by the holders of such issue
of Senior Indebtedness.
In the event that, notwithstanding the foregoing three paragraphs of this
Promissory Note, any payment of this Promissory Note shall be made or on behalf
of the Company and received by the Holder, then, unless and until the amount of
such Senior Indebtedness then due shall have been paid in full or provision made
therefor or such default shall have been cured or waived, such payment shall be
held in trust for the benefit of, and shall be immediately paid over to, the
holders of Senior Indebtedness or their representative or any trustee therefor
ratably according to the aggregate amounts remaining unpaid on account of the
principal of and interest on, and fees and other charges in respect of, the
Senior Indebtedness held or represented by each, for application to the payment
of all Senior Indebtedness remaining unpaid to the extent necessary to
7
pay all Senior Indebtedness in accordance with its terms, after giving effect to
any concurrent payment or distribution to or for the benefit of the holders of
Senior Indebtedness.
The undersigned shall have the right to prepay in whole or in part, and
from time to time, the remaining unpaid principal balance hereunder, without
penalty.
The undersigned hereby waives presentment for payment, notice of dishonor,
protest and notice of protest.
This Note shall be governed by and construed in accordance with the laws of
the State of Colorado.
BOSTON CHICKEN, INC.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------
Its: Vice President
8
NEITHER THIS PROMISSORY NOTE NOR THE SHARES DESCRIBED IN THIS PROMISSORY
NOTE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT") OR UNDER
THE SECURITIES LAWS OF ANY STATE AND THEY MAY NOT BE SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF EXCEPT IN ACCORDANCE WITH THIS PROMISSORY NOTE AND UNLESS
EITHER (A) THEY ARE REGISTERED UNDER THE ACT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT OR (B) BOSTON CHICKEN, INC. HAS RECEIVED EVIDENCE
SATISFACTORY TO IT THAT SUCH PROPOSED DISPOSITION IS EXEMPT FROM SUCH
REGISTRATION.
THE UNDERSIGNED WAIVES THE RIGHT TO ASSERT AGAINST ANY ASSIGNEE OF THE
HOLDER, OR ANY SUBSEQUENT ASSIGNEE, ANY DEFENSE, COUNTERCLAIM, OR SETOFF THAT
THE UNDERSIGNED COULD ASSERT AGAINST THE HOLDER IN AN ACTION BROUGHT BY THE
HOLDER UPON THIS NOTE OTHER THAN ANY DEFENSE, COUNTERCLAIM, OR SETOFF TO WHICH A
HOLDER IN DUE COURSE WOULD BE SUBJECT UNDER THE COLORADO UNIFORM COMMERCIAL
CODE.
AMENDED AND RESTATED PROMISSORY NOTE
$1,590,740 November 7, 1997
Golden, Colorado
For value received, the undersigned hereby promises to pay to the order of
Xxxx X. Xxxxxx (the "Holder"), on March 21, 1999, the principal amount of one
million five hundred ninety thousand seven hundred forty dollars ($1,590,740),
together with interest thereon as provided herein.
This Note is issued in exchange of and replacement for, and evidences the
same indebtedness incurred to the date hereof, under that certain Promissory
Note, dated August 27, 1997, from the undersigned in favor of Holder.
This Note shall bear interest from August 27, 1997 at a rate of 9.5% per
annum. Interest shall be payable quarterly on March 31, June 30, September 30
and December 31 of each year and at maturity. Interest shall be calculated for
actual days elapsed on the basis of a 360-day year. If any payment of principal
of, or interest on, or any other amount owed by the undersigned under this Note
becomes due and payable on other than a Business Day (as defined below), the
maturity thereof shall be extended to the next succeeding Business Day. The term
"Business Day" means any day that is not a Saturday, Sunday or legal holiday in
Golden, Colorado on which banks are not authorized or required to be closed.
1
This Note shall be payable at the offices of Boston Chicken, Inc. (the
"Company"), 00000 Xxxxxx Xxxx Xxxxxxx, Xxxxxx, Xxxxxxxx, or such other place in
the United States of America as the lawful holder hereof may from time to time
in writing designate.
The principal amount of this Note and any accrued interest due on the
payment date or otherwise may be paid at the Company's option in (x) lawful
money of the United States of America in immediately available funds (the
"Cash"), (y) shares (the "Shares") of common stock, $.01 par value per share, of
the Company (the "Common Stock") valued at the average of the closing sales
prices per share of the Common Stock quoted on the Nasdaq National Market, or,
in the event the Common Stock is not quoted on the Nasdaq National Market, on
such other securities exchange on which the Common Stock is then traded, as
reported in the Wall Street Journal (Western Edition), for the five (5) trading
days immediately prior to the second Business Day before the date of payment
(the "Average Price"), freely transferable by such Holder for a period of at
least 30 days from the date on which the Shares are delivered to or for the
account of the Holder (the "Date of Payment"), if such Holder is not an
Affiliate (as hereinafter defined) of the Company, or for a period of 365 days
from the Date of Payment, if such Holder is an Affiliate of the Company,
pursuant to an effective registration statement under the Act covering the
resale by such Holder of the Shares (the "Registration Statement") and approved
for listing on the Nasdaq National Market or such other securities exchange on
which the Common Stock is then listed or traded or (z) a combination of Cash and
Shares, determined with reference to the preceding clauses (x) and (y).
If during the 30-day period or 365-day period, as applicable, after the
Date of Payment there occurs any development or event which requires an
amendment to the Registration Statement or a supplement to the related
prospectus (the "Resale Prospectus") (in each case as amended or supplemented)
so that they will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements contained therein, in light of the circumstances under which they
were made, not misleading: (i) the Company shall immediately notify the Holder
of the occurrence of such development or event; (ii) upon receipt of such
notice, the Holder shall discontinue dispositions of the Shares until the Holder
shall have received copies of the amended or supplemented Resale Prospectus
contemplated above or been advised by the Company in writing that use of the
Resale Prospectus may be resumed; (iii) as promptly as practicable, but not
later than one hundred twenty (120) days after such notice, the Company shall
take such action as is necessary to amend the Registration Statement or
supplement the prospectus to permit sales of the Shares to be made thereunder
and shall furnish such amended or supplemented Resale Prospectus in reasonable
quantities (as thereafter deliverable to the purchasers of Shares) to the Holder
so that such Resale Prospectus will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements contained therein, in light of the
circumstances under which they were made, not misleading; and (iv) the 30-day
period or 365-day period, as applicable, shall be extended by the number of days
during which the Holder is required to discontinue dispositions of the Shares,
but such extension shall not increase the respective periods beyond a total of
30 days or 365 days, as the case may be.
2
In the event (i) the Holder is not an Affiliate of the Company and the
Holder sells all of the Shares delivered to the Holder in connection with any
payment of principal and/or interest as provided in the fourth paragraph of this
Note within the first ten (10) trading days on which the Nasdaq National Market
is open for business immediately following the Date of Payment (the "Guarantee
Period") for cash in one or more bona fide broker's or market maker transactions
in accordance with Rule 145 under the 1933 Act, through or to Xxxxxxx Lynch,
Pierce, Xxxxxx and Xxxxx Incorporated ("Xxxxxxx Xxxxx"), to one or more persons
not affiliated with, related to, or associated with the Holder, in which the
Holder has instructed Xxxxxxx Xxxxx to make a good faith effort to maximize the
selling price; (ii) the average price per share received in such sales, net of
broker's commissions, is less than the Average Price (such difference being
referred to herein as the "Per-Share Shortfall"); and (iii) the Company receives
notice from the Holder within five (5) days of the expiration of the Guarantee
Period of the amount of the Per-Share Shortfall, the Company shall pay to the
Holder, within five (5) business days of receipt of the applicable confirmation
slips, an amount, in cash or Shares of Common Stock (valued as provided in the
following paragraph) at the Company's option, equal to the Per-Share Shortfall
multiplied by the number of Shares sold during the Guarantee Period (the
"Shortfall Amount").
In the event the Company elects to pay the Shortfall Amount under the
preceding paragraph in Shares of Common Stock (the "Shortfall Shares"), the
number of Shortfall Shares to be delivered to the Holder shall be determined by
dividing the Shortfall Amount by the average closing sales price per share of
the Common Stock quoted on the Nasdaq National Market, as reported in the Wall
Street Journal (Western Edition), for the five (5) trading days immediately
prior to the last business day before the date on which the Company delivers the
Shortfall Shares to the Holder. Any Shortfall Shares so delivered shall also be
freely transferable for a period of 30 days from the date of their payment by
such Holder pursuant to an effective registration statement under the Act
covering the resale by such Holder of the Shares and approved for listing on the
Nasdaq National Market or the securities exchange on which the Common Stock is
then listed or traded. The provisions of the fourth and fifth paragraphs of
this Promissory Note shall apply, mutatis mutandis, to the registration under
the Act of such Shortfall Shares.
The Company agrees to reimburse, to the extent permitted by law, the
Holder, its directors, officers, employees and agents, and each person, if any,
who controls the Holder within the meaning of the Act, for any and all losses,
claims, damages, expenses and liabilities to which they or any of them may
become subject under the Act or any other statute or common law or otherwise by
reason of its offer and sale of the Shares or Shortfall Shares, and to reimburse
the Holder for any reasonable legal or other expenses actually and reasonably
incurred in connection with investigating any claims and defending any actions,
insofar as such losses, claims, damages, expenses, liabilities, or actions arise
out of, or are based upon:
(i) any untrue statement of a material fact or any alleged untrue
statement of a material fact contained in or incorporated by reference in the
Registration Statement or any post-effective amendment thereto, or the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; or
3
(ii) any untrue statement of a material fact or any alleged untrue
statement of a material fact contained or incorporated by reference in the
Resale Prospectus (as amended or supplemented if the Company shall have filed
with the Securities and Exchange Commission any amendment or supplement
thereto), if used within the period during which the Company is required to keep
the Registration Statement and Resale Prospectus current, or the omission or
alleged omission to state therein a material fact necessary in order to make the
statements contained therein, in light of the circumstances under which they
were made, not misleading;
provided, however, that the Company's obligations contained herein shall not
apply to losses, claims, damages, expenses, liabilities, or actions arising out
of, or based upon any such untrue statement or any such omission or alleged
omission, if such statement or omission was made in reliance upon, and in
conformity with, information relating to the Holder furnished to the Company by
the Holder expressly for use in connection with the preparation of the
Registration Statement or any Resale Prospectus or any such amendment or
supplement thereto.
The Holder, by its acceptance of this Promissory Note, shall (in the same
manner and to the same extent as set forth in the preceding paragraph),
reimburse, to the extent permitted by law, the Company, its directors, officers,
employees and agents, and each person, if any, who controls the Company within
the meaning of the Act, if such statement or omission was made in reliance upon
and in conformity with information relating to the Holder furnished to the
Company by the Holder expressly for use in connection with the preparation of
the Registration Statement or the Resale Prospectus or any amendment or
supplement thereto.
Any person entitled to reimbursement hereunder will (i) give written notice
to the reimbursing party of any claim with respect to which it seeks
reimbursement within 14 days of the person entitled to reimbursement receiving
notice thereof (provided, however, that any failure by a person entitled to
reimbursement hereunder to give such prompt written notice shall not adversely
affect such person's rights hereunder unless and then only to the extent that
such failure prejudices the rights of the reimbursing party hereunder) and (ii)
unless in such party's reasonable judgment a conflict or interest between such
party and the reimbursing parties may exist with respect to such claim, permit
such reimbursing party to assume the defense of such claim with counsel
reasonably satisfactory to the party being reimbursed. If such defense is
assumed, the reimbursing party will not be subject to any liability for any
settlement made by the party being reimbursed without its consent (but such
consent will not be unreasonably withheld). A reimbursing party who is not
entitled to, or elects not to, assume the defense of a claim will not be
obligated to pay the fees and expenses of more than one counsel for all parties
being reimbursed by such reimbursing party with respect to such claim, unless in
the reasonable judgment of such counsel a conflict of interest may exist between
such party being reimbursed and any other of such reimbursed parties with
respect to such claim.
If the reimbursement provided for herein is unavailable to or
insufficient to hold harmless the party being reimbursed under the second and
third preceding paragraphs in respect of any losses, claims, damages, expenses
or liabilities referred to therein, then each applicable reimbursing party, in
lieu of reimbursing such party, shall contribute to the amount paid or payable
by such party being reimbursed as a result of such losses, claims, damages,
expenses, or
4
liabilities in such proportion as is appropriate to reflect the relative fault
of the Holder and the Company in connection with the statements or omissions
which resulted in such losses, claims, damages, expenses, or liabilities. The
relative fault of the Holder and the Company shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission to state a material fact relates to information
supplied by the Holder or by the Company, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The amount paid or payable by a party as a result of the
losses, claims, damages, expenses, and liabilities referred to above shall be
deemed to include any legal or other fees or expenses reasonably incurred by
such party in connection with investigating or defending any action or claim.
The Holder, by its acceptance hereof, and the Company agree that it would not be
just and equitable if contribution pursuant hereto were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
No person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the 0000 Xxx) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.
As used herein, the term "Affiliate" means, with respect to any specified
person, any other person directly or indirectly controlling or controlled by or
under direct or indirect common control with such specified person, for the
purposes of this definition, "control" when used with respect to any person
means the power to direct the management and policies of such person, directly
or indirectly, whether through the ownership of voting securities, by contract
or otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
The occurrence of any one of the following events shall constitute an
event of default ("Event of Default") under this Note: (a) if the undersigned
fails to pay the principal of this Note at the time and place when the same is
due and payable, (b) if the undersigned fails to pay any interest payment or
Shortfall Amount on this Note at the time and place when the same is due and
such default continues for a period of five days following receipt of notice of
non-payment, (c) if the undersigned breaches any covenant contained in this Note
other than the covenants to pay principal, and interest or the Shortfall Amount
and such breach is not cured within 10 business days of written notice thereof,
or (d) if the undersigned shall file a voluntary petition in bankruptcy, or
shall be adjudicated a bankrupt or insolvent, or shall file any petition or
answer seeking for itself any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under any present or
future statute, law or regulation, or shall file any answer admitting the
material allegations of a petition filed against it in any such proceeding, or
if, within 60 days after the commencement of any proceeding against the
undersigned seeking any reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any present or future statute,
law or regulation, such proceeding shall not have been dismissed or if, within
60 days after the appointment without the consent or acquiescence of the
undersigned of any trustee, receiver or liquidator of the undersigned or of all
or any substantial part of its properties, such appointment shall not have been
vacated.
5
If an Event of Default has occurred (whether or not it is continuing), then
the holder of this Note shall have the right at its sole option and in addition
to any other available remedy, to declare this Note to be due and payable,
whereupon the same shall forthwith mature and become due and payable without
presentment, demand, protest or notice, all of which are hereby waived. In the
case of an Event of Default, all payments of principal, interest, the Shortfall
Amount or other payments under this Note, shall be made in Cash. In case of a
default in the payment of any principal of, or interest on, this Note, the
undersigned will pay the holder hereof such further amount as shall be
sufficient to cover the reasonable cost and expense of collection, including
without limitation reasonable attorneys' fees. No course of dealing and no delay
on the part of the holder hereof in exercising any right shall operate as a
waiver thereof or otherwise prejudice such holder's rights. The rights and
remedies of the holder hereof are cumulative and are not exclusive of any rights
or remedies it would otherwise have.
The Company covenants and agrees, and each holder of this Promissory Note,
whether upon original issue or upon transfer or assignment hereof, by such
holder's acceptance hereof likewise covenants and agrees, that upon the payment
or distribution of the assets of the Company of any kind or character, whether
in cash, property or securities, to creditors upon any dissolution, winding-up,
total or partial liquidation or reorganization of the Company (whether voluntary
or involuntary, or in bankruptcy, insolvency, reorganization, liquidation,
receivership proceedings, or upon an assignment for the benefit of creditors, or
any other marshaling of the assets and liabilities of the Company, or
otherwise), all Senior Indebtedness shall first be paid in full, in cash, or
have provision made for such payment, before any payment (other than in Shares
of Common Stock) is made other than in Shares of Common Stock on account of the
principal of or interest or Shortfall Amount on or other amounts due in respect
of the indebtedness evidenced by this Promissory Note. As used herein, the term
"Senior Indebtedness" means the principal of and premium, if any, and interest
(including, without limitation, any interest accruing subsequent to the filing
of a petition or other action concerning bankruptcy or other similar
proceedings, whether or not constituting an allowed claim in any such
proceedings) on, and fees, costs, enforcement expenses (including legal fees and
disbursements), collateral protection expenses and other reimbursement or
indemnity obligations in respect of, all indebtedness or obligations of the
Company to banks and other lending institutions for money borrowed or in respect
of credit or other banking or lease financing facilities, whether presently
outstanding or hereafter incurred or created and including any extensions,
renewals, modifications or amendments thereof, including, without limitation,
under (i) the Secured Revolving Credit Agreement dated as of December 9, 1996
among the Company, Bankers Trust Company, as Documentation Agent, Bank of
America Illinois, as Agent, and the Lenders named therein, (ii) the Facilities
Agreement dated as of December 9, 1996 among the Company, Bank of America
Illinois, as Agent for Certain Lenders and General Electric Capital Corporation,
(iii) Master Lease Agreement dated as of September 27, 1995 between the Company
and General Electric Capital Corporation, for itself and as agent for other
participants, as amended, and (iv) Master Lease Agreement No. 2 dated as of
December 9, 1996, between the Company and General Electric Capital Corporation,
for itself and as agent for other participants, and (v) any renewals,
extensions, refundings, restructurings, amendments or modifications of the
facilities referred to in (i), (ii), (iii) or (iv).
6
Upon the happening of a default in payment (whether at maturity or at a
date fixed for prepayment or by acceleration or otherwise) of the principal of
or interest on any Senior Indebtedness, as such default is defined under or in
respect of such senior Indebtedness or in any agreement pursuant to which such
Senior Indebtedness has been incurred (the relevant "Senior Debt Agreement"),
then, unless and until the amount of such Senior Indebtedness then due shall
have been paid in full or provision made therefor in a manner satisfactory to
the holders of such Senior Indebtedness, or such default shall have been cured
or waived or shall have ceased to exist, the Company shall not pay principal of
or interest or the Shortfall Amount on this Promissory Note and shall not
repurchase, redeem or otherwise retire this Promissory Note, in either case
other than in or for Shares of Common Stock (collectively, "payment of this
Promissory Note").
Upon the happening of an event of default with respect to any Senior
Indebtedness (other than under circumstances described in the immediately
preceding paragraph of this Promissory Note are applicable), as such event of
default is defined under the relevant Senior Debt Agreement, permitting the
holders thereof to immediately accelerate the maturity thereof, and upon written
notice thereof given to the Company and the Holder by any holders of such Senior
Indebtedness or their representative or any trustee therefor (a "Default
Notice"), then, unless and until such event of default shall have been cured or
waived in writing by the holders of such Senior Indebtedness or shall have
ceased to exist, no direct or indirect payment of this Promissory Note shall be
made; provided, however, that this paragraph shall not prevent the making of any
such payment (which is not otherwise prohibited by the immediately preceding
paragraph of this Promissory Note) for more than 89 days after the Default
Notice shall have been given unless the Senior Indebtedness in respect of which
such event of default exists has been declared due and payable in its entirety,
in which case no such payment may be made until such acceleration has been
waived, rescinded or annulled, or such Senior Indebtedness shall have been paid
in full, or payment thereof shall be duly provided for in cash or in any other
manner than one Default Notice shall be given with respect to the same issue of
Senior Indebtedness within a period 360 consecutive days, and no event of
default which existed or was continuing on the date of any Default Notice and
was known to the holders of such issue of Senior Indebtedness shall be made the
basis for the giving of a subsequent Default Notice by the holders of such issue
of Senior Indebtedness.
In the event that, notwithstanding the foregoing three paragraphs of this
Promissory Note, any payment of this Promissory Note shall be made or on behalf
of the Company and received by the Holder, then, unless and until the amount of
such Senior Indebtedness then due shall have been paid in full or provision made
therefor or such default shall have been cured or waived, such payment shall be
held in trust for the benefit of, and shall be immediately paid over to, the
holders of Senior Indebtedness or their representative or any trustee therefor
ratably according to the aggregate amounts remaining unpaid on account of the
principal of and interest on, and fees and other charges in respect of, the
Senior Indebtedness held or represented by each, for application to the payment
of all Senior Indebtedness remaining unpaid to the extent necessary to pay all
Senior Indebtedness in accordance with its terms, after giving effect to any
concurrent payment or distribution to or for the benefit of the holders of
Senior Indebtedness.
7
The undersigned shall have the right to prepay in whole or in part, and
from time to time, the remaining unpaid principal balance hereunder, without
penalty.
The undersigned hereby waives presentment for payment, notice of dishonor,
protest and notice of protest.
This Note shall be governed by and construed in accordance with the laws of
the State of Colorado.
BOSTON CHICKEN, INC.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------
Its: Vice President
8
