EXHIBIT (s)(1)
SHOWBIZ PIZZA TIME, INC.
Floating Rate Series C Senior Notes due 1997
____________________
NOTE PURCHASE AGREEMENT
____________________
Dated as of October 10, 1995
Table of Contents
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Page
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1. THE NOTES........................................ 1
1.1. Authorization of Notes....................... 1
1.2. Interest Rates on the Notes; Reset Procedures
for Series C Notes........................... 1
1.3. Extension.................................... 4
1.4. Optional Redemption.......................... 4
1.5. Withholding Taxes............................ 5
1.6. Withholding Tax Exemption for Obligations
Targeted to Foreign Markets................. 5
2. SALE AND PURCHASE OF NOTES........................ 6
3. CLOSING........................................... 6
4. CONDITIONS TO CLOSING............................. 7
4.1. Representations and Warranties............... 7
4.2. Performance; No Default...................... 7
4.3. Compliance Certificates...................... 7
4.4. Opinions of Counsel.......................... 7
4.5. Purchase Permitted By Applicable Law, etc.... 8
4.6. Sale of Notes to Other Purchasers............ 8
4.7. Changes in Corporate Structure............... 8
4.8. Proceedings and Documents.................... 8
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY..... 8
5.1. Organization; Power and Authority............ 9
5.2. Authorization, etc........................... 9
5.3. Disclosure................................... 9
5.4. Organization and Ownership of Shares of
Subsidiaries; Affiliates................... 10
5.5. Financial Statements......................... 10
5.6. Compliance with Laws, Other Instruments, etc. 11
5.7. Governmental Authorizations, etc............. 11
5.8. Litigation; Observance of Agreements,
Statutes and Orders........................ 11
5.9. Taxes........................................ 11
5.10. Title to Property; Leases...................... 12
5.11. Licenses, Permits, etc......................... 12
5.12. Compliance with ERISA.......................... 13
5.13. Private Offering by the Company................ 13
5.14. Use of Proceeds; Margin Regulations............ 14
5.15. Existing Indebtedness; Future Liens............ 14
5.16. Foreign Assets Control Regulations, etc........ 14
5.17. Status under Certain Statutes.................. 15
5.18. Environmental Matters.......................... 15
5.19. Status under the Internal Revenue Code of 1986. 15
6. REPRESENTATIONS OF THE PURCHASER................... 16
6.1. Purchase of Notes............................. 16
6.2. Source of Funds............................... 16
6.3. Independent Analysis.......................... 16
6.4. Brokers and Finders........................... 16
6.5. Representations Relating to U.S. Tax Withholding
Obligations.................................. 16
7. INFORMATION AS TO COMPANY.......................... 17
7.1. Financial and Business Information............ 17
7.2. Officer's Certificate......................... 20
7.3. Inspection.................................... 21
8. PREPAYMENT OF THE NOTES............................ 21
8.1. Prepayment in Connection with a Change of
Control...................................... 21
8.2. Allocation of Partial Prepayments............. 22
8.3. Maturity; Surrender, etc...................... 22
8.4. Purchase or Optional Redemption of Notes...... 22
9. AFFIRMATIVE COVENANTS.............................. 23
9.1. Compliance with Law........................... 23
9.2. Insurance..................................... 23
9.3. Maintenance of Properties..................... 23
9.4. Payment of Taxes and Claims................... 24
9.5. Corporate Existence, etc...................... 24
9.6. Lines of Business............................. 24
10. NEGATIVE COVENANTS................................. 24
10.1. Liens........................................... 24
10.2. Maintenance of Financial Conditions............. 26
10.3. Asset Sales..................................... 27
10.4. Merger, Consolidation, etc...................... 28
10.5. Subsidiary Indebtedness......................... 29
10.6. Transactions with Affiliates.................... 30
11. EVENTS OF DEFAULT.................................. 30
12. REMEDIES ON DEFAULT, ETC........................... 31
12.1. Acceleration.................................... 31
12.2. Other Remedies.................................. 31
12.3. Rescission...................................... 32
12.4. No Waivers or Election of Remedies, Expenses,
etc........................................... 32
13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES...... 32
13.1. Registration of Notes........................... 32
13.2. Transfer and Exchange of Notes.................. 33
13.3. Replacement of Notes............................ 33
14. PAYMENTS ON NOTES.................................. 34
14.1. Place of Payment................................ 34
14.2. Home Office Payment............................. 34
15. EXPENSES, ETC...................................... 34
15.1. Transaction Expenses............................ 34
15.2. LIBOR Funding Losses............................ 35
15.3. Survival........................................ 35
16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
ENTIRE AGREEMENT................................... 35
17. AMENDMENT AND WAIVER............................... 36
17.1. Requirements.................................... 36
17.2. Solicitation of Holders of Notes................ 36
17.3. Binding Effect, etc............................. 36
17.4. Notes held by Company, etc...................... 37
18. NOTICES............................................ 37
19. REPRODUCTION OF DOCUMENTS.......................... 37
20. CONFIDENTIAL INFORMATION........................... 38
21. SUBSTITUTION OF PURCHASER.......................... 39
22. MISCELLANEOUS...................................... 39
22.1. Successors and Assigns.......................... 39
22.2. Construction.................................... 39
22.3. Jurisdiction and Process........................ 39
22.4. Indemnification................................. 40
22.5. Accounting Terms................................ 41
22.6. Payments Due on Non-Business Days............... 41
22.7. Severability.................................... 41
22.8. Counterparts.................................... 41
22.9.Governing Law.................................... 42
Schedule A - - Names and Addresses of Purchasers
Schedule B - - Defined Terms
Exhibit 1.1(a) - - Form of Floating Rate Series C Senior
Note due 1997
Exhibit 1.6-- Form of Certificate in Lieu of Form W-8
Exhibit 4.4(a) - - Form of Opinion of Counsel for the Company
Exhibit 4.4(b) - - Form of Opinion of Special Counsel
for the Company
Schedule 5.3 - - Disclosure Documents
Schedule 5.4 - - Subsidiaries
Schedule 5.5 - - Financial Statements
Schedule 5.8 - - Litigation
Schedule 5.11 - - Licenses, Etc.
Schedule 5.15 - - Existing Indebtedness
SHOWBIZ PIZZA TIME, INC.
0000 Xxxx Xxxxxxx Xxxxxxx
Xxxxxx, XX 00000
Floating Rate Series C Senior Notes due 1997
As of October 10, 1995
TO Neue Bank AG
Ladies and Gentlemen:
SHOWBIZ PIZZA TIME, INC., a Kansas corporation (the "Company"),
agrees with you as follows:
(7) THE NOTES
(8) Authorization of Notes.
The Company has duly authorized the issue and sale of up to
$5,000,000 aggregate principal amount of its Floating Rate Series C
Senior Notes due 1997 (the "Series C Notes"), substantially in the
respective forms set out in Exhibit 1.1(a). As used herein, the term
"Notes" shall mean all notes originally delivered pursuant to this
Agreement and the Other Agreements referred to below and all notes
delivered in substitution or exchange for any such note and, where
applicable, shall include the singular number as well as the plural.
Certain capitalized terms used in this Agreement are defined in Schedule
B; references to a "Schedule" or an "Exhibit" are, unless otherwise
specified, to a Schedule or an Exhibit attached to this Agreement. The
terms "Note", and "Series C Note" shall mean one of the Notes, and
Series C Notes, respectively.
(b) Interest Rates on the Notes; Reset Procedures for Series C Notes.
(a) Series C Notes. Each Series C Note shall bear interest,
payable quarterly on each Interest Payment Date in each year, at a rate
per annum (computed on the basis of actual days elapsed and a year of
360 days) equal to 3.5% plus the LIBOR Rate for the Interest Period
commencing on the date of the Closing (which shall be a period of six
months), and from time to time thereafter at a rate per annum (so
computed) equal to 3.5% plus the LIBOR Rate as in effect from time to
time for the applicable Interest Period until the principal thereof
shall become due and payable and shall bear interest on demand on any
overdue principal or premium, if any, and on any overdue installment of
interest at the default rate specified therein. If you are purchasing
Series C Notes under this Agreement, at least one Business Day before
the date of the Closing, the Company will give notice to you, specifying
the initial LIBOR Rate, which shall be determined with respect to the
date of the Closing as if that date were a Reset Date, and the resulting
applicable interest rate on the Series C Notes for the Interest Period
commencing on the date of the Closing.
The Company will give written notice to each Holder of a Series C
Note at least three Business Days prior to each Reset Date (a "Reset
Notice") specifying the duration of the Interest Period commencing on
that Reset Date. If for any reason the Company fails to give a Reset
Notice with respect to any Reset Date, the Interest Period commencing on
such Reset Date shall be deemed a six-month period (or a three-month
period in the case of the final Interest Period if the Reset Date is
three months prior to the final maturity of the Series C Notes). On
each Reset Date the Company shall determine the LIBOR Rate for the
Interest Period then commencing and will give notice (by telephone or
facsimile) to the Calculation Holder (by telephone or facsimile to such
person as the Calculation Holder may from time to time specify for such
purpose) specifying the LIBOR Rate as so determined. If for any reason
the Calculation Holder, by notice to the Company (which notice shall be
given within two Business Days after the Reset Date), objects to such
determination, the LIBOR Rate as determined by the Calculation Holder
shall be final and binding upon the Company absent manifest error.
Forthwith and in any event within two Business Days after each Reset
Date the Company will give written notice to the Holders of the Series C
Notes specifying the LIBOR Rate and the resulting applicable interest
rate on the Series C Notes for the Interest Period commencing on that
Reset Date and stating whether the Calculation Holder determined (or
confirmed the Company's determination of) the LIBOR Rate for that
Interest Period. If for any reason neither the Company nor the
Calculation Holder determines the LIBOR Rate for any Interest Period,
the determination of the LIBOR Rate by any other Institutional Investor
Holder of a Series C Note (acting in place of the Calculation Holder if
necessary) and specified in a written notice to the Company shall be
final and binding upon the Company and the Holders of the Series C Notes
absent manifest error, provided that in case more than one such
Institutional Investor Holder gives such a written notice and the LIBOR
Rate in such notices is not the same rate, the LIBOR Rate shall be the
rate agreed upon by such other Institutional Investor Holders as
specified in a subsequent notice to the Company, which rate shall be
final and binding as aforesaid.
(b) Certain Defined Terms and Procedures. For purposes of
determining the applicable interest rate on the Series C Notes, the
following terms have the following meanings (and certain matters will be
determined in accordance with procedures as specified below):
"Calculation Holder" means the Institutional Investor holding
the highest unpaid principal amount of Series C Notes at the time
outstanding and willing to serve in such capacity.
"Designated Maturity" means for any Reset Date a period of
three or six months, as the case may be, corresponding to the
Interest Period commencing on such Reset Date.
"Interest Period" means a period commencing on and including
the date of the Closing or a Reset Date, as the case may be, and
ending on the Interest Payment Date that is three or six months
thereafter, as set forth in respect of the Interest Period
commencing on the date of the Closing in Section 1.2(a) and as set
forth in respect of each Reset Date in the Reset Notice for such
period. Notwithstanding the foregoing if the Interest Payment
Date in the appropriate month is not a Business Day such Interest
Period shall be extended to the next day that is a Business Day
and if there is no numerically corresponding date in the
appropriate month, such Interest Period shall end on the last
Business Day of such month.
"LIBOR Rate" means for the Interest Period commencing on the
date of the Closing, the rate specified in notice from the Company
given pursuant to Section 1.2(a); and means for any Reset Date the
rate for deposits in U.S. Dollars for a period of the Designated
Maturity which appears on the display designated as "Page 3750"
on Telerate Access Service (or such other display as may replace
Page 3750 on Telerate Access Service) as of 11:00 a.m., London
time, on the date that is two London Banking Days preceding that
Reset Date; and if such rate does not appear on Telerate Page 3750
(or such other display), the rate for that Reset Date will be
determined on the basis of rates on which deposits in U.S. dollars
are offered by the Reference Banks at approximately 11:00 a.m.,
London time, on the day that is two London Banking Days preceding
that Reset Date to prime banks in the London interbank market for
a period of the Designated Maturity commencing on that Reset Date
and in a Representative Amount. The Company will cause the
Calculation Holder to request the principal London office of each
of the Reference Banks to provide a quotation of its rate. If at
least two such quotations are provided, the rate for that Reset
Date will be the arithmetic means of the quotations. If fewer
than two quotations are provided as requested, the rate for that
Reset Date will be the arithmetic mean of the rates quoted by
major banks in New York City, selected by the Calculation Holder,
at approximately 11:00 a.m., New York City time, on that Reset
Date for loans in U.S. dollars to leading European banks for a
period of the Designated Maturity commencing on that Reset Date
and in a Representative Amount.
"London Banking Day" means any day other than Saturday or
Sunday or a day on which commercial banks are required or
authorized by law to be closed in London, England.
"Reference Banks" means four major banks in the London
interbank market.
"Representative Amount" means an amount that is comparable to
the unpaid principal amount of the Series C Notes at the relevant
time.
"Reset Date" means any Interest Payment Date corresponding to
the first day of an Interest Period.
"Reset Notice" is defined in Section 1.2(a).
(c) Extension.
Upon notice to the Company by the Holder of any Note, given not
less than ninety (90) nor more than one hundred twenty (120) days prior
to each annual anniversary date of the Notes, the Holder may, at its
sole and absolute discretion, elect to extend the maturity date on a
Note for an additional year. If a Holder extends the maturity date of
a Note, the Company shall, upon surrender of any such Note at the
principal executive office of the Company, execute and deliver a new
Note reflecting the extended maturity date in exchange therefor.
Notwithstanding anything herein, no extension of the maturity of the
Notes under this Section 1.3 shall extend the maturity of any of the
Notes beyond October 10, 2000.
(d) Optional Redemption.
(a) The Company shall have the right, at its option, to redeem the
Notes in whole or in part at any time and from time to time, as provided
herein and in the Notes. At least 30 days but not more than 60 days
before a Redemption Date, the Company shall mail a notice of redemption
by first class mail to the Holder at such Holder's registered address.
Each notice for redemption shall identify the principal amount of the
Note to be redeemed and shall state:
1. the Redemption Date;
2. the Redemption Price;
3. the name and address of the Paying Agent;
4. that the Note called for redemption must be surrendered
to the Paying Agent to collect the Redemption Price;
5. that, unless the Company defaults in making the
redemption payment, interest on the principal amount of the Notes
called for redemption ceases to accrue on and after the Redemption
Date, and the only remaining right of the Holders of such Notes
is to receive payment of the Redemption Price upon surrender to
the Paying Agent of the Notes redeemed;
6. if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the
Redemption Date, and upon surrender of such Note, a new Note or
Notes in aggregate principal amount equal to the unredeemed
portion thereof will be issued; and
7. if fewer than all the Notes are to be redeemed, the
identification of the particular Notes (or portion thereof) to be
redeemed, as well as the aggregate principal amount of Notes to
be redeemed and the aggregate principal amount of Notes to be
outstanding after such partial redemption.
(b) Once notice of redemption is mailed in accordance with Section
1.4(a), Notes (or any part thereof) called for redemption become due and
payable on the Redemption Date and at the Redemption Price. Upon
surrender to the Paying Agent, such Notes (or any part thereof) called
for redemption shall be paid at the Redemption Price.
(c) On or before the Redemption Date, the Company shall deposit with
the Paying Agent United States dollars sufficient to pay the Redemption
Price of all Notes (or part thereof) to be redeemed on that date (other
than Notes or any part thereof called for redemption on that date which
have been delivered to the Paying Agent for cancellation). The Paying
Agent shall promptly return to the Company any United States dollars so
deposited which are not required for that purpose upon the written
request of the Company.
(d) If the Company complies with the preceding paragraph, then, unless
the Company defaults in the payment of such Redemption Price, interest
on the Notes (or any part thereof) to be redeemed will cease to accrue
on and after the applicable Redemption Date, whether or not such Notes
are presented for payment.
(d) Upon surrender of a Note that is to be redeemed in part, the
Company shall issue to the Holder, at the expense of the Company, a new
Note or Notes equal in principal amount to the unredeemed portion of the
Note surrendered.
(e) Withholding Taxes.
All payments by the Company of principal of and interest on the
Notes are payable without deduction for or on account of any present or
future taxes, duties or other charges levied or imposed by the United
States of America or by the government of any jurisdiction outside the
United States of America or by any political subdivision or taxing
authority of or in any of the foregoing through withholding or deduction
with respect to any such payments. If any such taxes, duties or other
charges are so levied or imposed, the Company will pay additional
interest or will make additional payments in such amounts so that every
net payment of principal of and interest on the Notes, after withholding
or deduction for or on account of any such present or future taxes,
duties or other charges, will not be less than the amount provided for
herein or therein, provided that the Company shall have no obligation to
pay such additional amounts to any Holder to the extent that such taxes,
duties, or other charges are levied or imposed by reason of the failure
of such Holder to comply with the provisions of Section 1.6. The
Company shall furnish promptly to each Holder official receipts
evidencing any such withholding or reduction.
(f) Withholding Tax Exemption for Obligations Targeted to Foreign
Markets.
Each Holder agrees that it will deliver to the Company a
certificate not more than 90 days prior to the first Interest Payment
Date, and annually thereafter on January 15 of each year signed under
oath (subject to penalty for perjury) by such Holder and certifying that
(A) the beneficial owners of the Notes are foreign (non-U.S.) persons
and have not been U.S. persons on any Interest Payment Date, (B) during
all periods while the Holder holds the Notes, the beneficial owners of
the Notes on each Interest Payment Date will not be a U.S. person, and
(C) the Holder will provide a statement to the Company if the Notes are
transferred to a U.S. Person, notifying the Company of such event. Such
certificate shall be substantially in the form attached hereto as
Exhibit 1.6, which form complies with the requirements of Treasury
Regulation S 35a.999-5(b) (question and answer 14).
(8) SALE AND PURCHASE OF NOTES.
Subject to the terms and conditions of this Agreement, the Company
will issue and sell to you, as record holder on behalf of the Beneficial
Owner, and you, as record holder on behalf of the Beneficial Owner, will
purchase from the Company, at the Closing provided for in Section 3,
Series C Notes in the principal amount or amounts specified opposite
your name in Schedule A at the purchase price of 100% of the principal
amount thereof, and in the aggregate principal amount of not more than
Five Million Dollars ($5,000,000). Contemporaneously with entering into
this Agreement, the Company is entering into separate Note Purchase
Agreements (the "Other Agreements") identical with this Agreement
(except for the principal amounts of Notes to be purchased) with each of
the other purchasers named in Schedule A (the "Other Purchasers"),
providing for the sale at such Closing to each of the Other Purchasers
of Notes in the principal amount or amounts specified opposite its name
in Schedule A. Your obligation hereunder and the obligations of the
Other Purchasers under the Other Agreements are several and not joint
obligations and you shall have no obligation under any Other Agreement
and no liability to any Person for the performance or non-performance by
any Other Purchaser thereunder. The aggregate principal amount of Notes
issued and sold by the Company under this Agreement and the Other
Agreements shall not exceed U.S. $5,000,000.
(9) CLOSING.
The sale and purchase of the Notes to be purchased by you and the
Other Purchasers shall occur at the offices of Banque Financiere de la
Cite, at 9:00 a.m., Dallas, Texas time, at a closing (the "Closing") on
October 10, 1995 or on such other Business Day thereafter on or prior to
October 24, 1995 as may be agreed upon by the Company and you and the
Other Purchasers. At the Closing the Company will deliver to you the
Notes to be purchased by you, as record holder on behalf of the
Beneficial Owner, in the form of a single Note so to be purchased (or
such greater number of Notes in denominations of at least U.S. $100,000
as you may request) dated the date of the Closing and registered in your
name (or in the name of your nominee), against delivery by you to the
Company or its order of immediately available funds in the amount of the
purchase price therefor by wire transfer of immediately available funds
(in U.S. Legal Tender) for the account of the Company to account number
501-33529 at Bank of Boston, Boston, Massachusetts, ABA# 000000000
(Attention: Xxxxx X'Xxxxxx at 617-434-7996).
If at the Closing the Company shall fail to tender such Notes to
you as provided above in this Section 3, or any of the conditions
specified in Section 4 shall not have been fulfilled to your
satisfaction, you shall, at your election, be relieved of all further
obligations under this Agreement, without thereby waiving any rights you
may have by reason of such failure or such nonfulfillment.
(10) CONDITIONS TO CLOSING.
Your obligation to purchase and pay for the Notes to be sold to
you at the Closing is subject to the fulfillment to your satisfaction,
prior to or at the Closing, of the following conditions:
(a) Representations and Warranties.
The representations and warranties of the Company in this
Agreement shall be correct when made and at the time of the Closing.
(b) Performance; No Default.
The Company shall have performed and complied with all agreements
and conditions contained in this Agreement required to be performed or
complied with by it prior to or at the Closing and after giving effect
to the issue and sale of the Notes (and the application of the proceeds
thereof) no Default or Event of Default shall have occurred and be
continuing.
(c) Compliance Certificates.
(a) Officer's Certificate. The Company shall have delivered to
you an Officer's Certificate, dated the date of the Closing, certifying
that the conditions specified in Sections 4.1, 4.2 and 4.9 have been
fulfilled.
(b) Secretary's Certificate. The Company shall have delivered
to you a certificate of the Secretary or an Assistant Secretary of the
Company certifying as to the resolutions attached thereto and other
corporate proceedings relating to the authorization, execution and
delivery of the Notes and this Agreement and the Other Agreements.
(d) Opinions of Counsel.
You shall have received opinions in form and substance
satisfactory to you, dated the date of the Closing and addressed to you
and the Beneficial Owner from Xxxxxxxx Xxxxx, Esq., Counsel of the
Company, and Xxxxxxxx Xxxxxxxx & Xxxxxx P.C., special counsel for the
Company, substantially in the respective forms set forth in Exhibits
4.4(a) and 4.4(b) and covering such other matters incident to the
transactions contemplated hereby as you or your counsel may reasonably
request.
(e) Purchase Permitted By Applicable Law, etc.
On the date of the Closing your purchase of Notes as record holder
on behalf of the Beneficial Owner shall (a) be permitted by the laws and
regulations of each jurisdiction to which you and the Beneficial Owner
are subject, (b) not violate any applicable law or regulation (including
without limitation Regulation G, T, U or X of the Board of Governors of
the Federal Reserve System) and (c) not subject you to any tax, penalty
or liability under or pursuant to any applicable law or regulation,
which law or regulation was not in effect on the date hereof. If
requested by you, you shall have received an Officer's Certificate
certifying as to such matters of fact as you may reasonably specify to
enable you to determine whether such purchase is so permitted.
(f) Sale of Notes to Other Purchasers.
The Company shall sell to the Other Purchasers and the Other
Purchasers shall purchase the Notes to be purchased by them at the
Closing as specified in Schedule A.
(g) Changes in Corporate Structure.
The Company shall not have changed its jurisdiction of
incorporation or been a party to any merger or consolidation and shall
not have succeeded to all or any substantial part of the liabilities of
any other entity at any time following the date of the most recent
financial statements referred to in Schedule 5.5. There has been no
event, condition, or occurrence since December 31, 1994 which,
individually or in the aggregate, has had a Material Adverse Effect and
no condition exists or event has occurred, individually or in the
aggregate, that could reasonably be expected to have a Material Adverse
Effect.
(h) Proceedings and Documents.
All corporate and other proceedings in connection with the
transactions contemplated by this Agreement and all documents and
instruments incident to such transactions shall be satisfactory to you
and your special counsel, and you and your special counsel shall have
received all such counterpart originals or certified or other copies of
such documents as you or they may reasonably request.
(11) REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to you that the following are
true and correct as of the date hereof and will be true and correct
through the date of the Closing as if made on such date.
(a) Organization; Power and Authority.
The Company is a corporation duly organized, validly existing and
in good standing under the laws of its jurisdiction of incorporation,
and is duly qualified as a foreign corporation and is in good standing
in each jurisdiction in which such qualification is required by law,
other than those jurisdictions as to which the failure to be so
qualified or in good standing could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
The Company has the corporate power and authority to own or hold under
lease the properties it purports to own or hold under lease, to transact
the business it transacts and proposes to transact, to execute and
deliver this Agreement and the Other Agreements and the Notes and to
perform the provisions hereof and thereof.
(b) Authorization, etc.
This Agreement and the Other Agreements and the Notes have been
duly authorized by all necessary corporate action on the part of the
Company, and this Agreement constitutes, and upon execution and delivery
thereof each Note will constitute, a legal, valid and binding obligation
of the Company, enforceable against the Company in accordance with its
terms, except as such enforceability may be limited by (a) applicable
bankruptcy, insolvency, reorganization, moratorium 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 proceeding in equity or at law).
(c) Disclosure.
This Agreement, the documents, certificates or other writings
delivered to you by or on behalf of the Company in connection with the
transactions contemplated hereby and described in Schedule 5.3 (the
"Disclosure Documents"), and the financial statements listed in Schedule
5.5, taken as a whole, do not contain any untrue statement of a material
fact or omit to state any material fact necessary to make the statements
therein not misleading in light of the circumstances under which they
were made. Since December 31, 1994, there has been no change in the
financial condition, operations, business, properties or prospects of
the Company or any Subsidiary except as disclosed in the Disclosure
Documents or in the financial statements listed in Schedule 5.5 and
other changes that individually or in the aggregate could not reasonably
be expected to have a Material Adverse Effect. There is no fact known
to the Company that could reasonably be expected to have a Material
Adverse Effect that has not been set forth herein or in the Disclosure
Documents. Any projections provided by the Company in the Disclosure
Documents are based on assumptions which management of the Company
believes to be reasonable.
(d) Organization and Ownership of Shares of Subsidiaries; Affiliates.
(a) Schedule 5.4 contains (except as noted therein) complete and
correct lists of the Company's (i) Subsidiaries, showing, as to each
Subsidiary, the correct name thereof, the jurisdiction of its
organization, and the percentage of shares of each class of its capital
stock or similar equity interests outstanding owned by the Company and
each other Subsidiary, (ii) Affiliates, other than Subsidiaries, and
(iii) directors and senior officers.
(b) All of the outstanding shares of capital stock or similar
equity interests of each Subsidiary shown in Schedule 5.4 as being owned
by the Company and its Subsidiaries have been validly issued, are fully
paid and nonassessable and are owned by the Company or another
Subsidiary free and clear of any Lien (except as otherwise disclosed in
Schedule 5.4).
(c) Each Subsidiary identified in Schedule 5.4 is a corporation
duly organized, validly existing and in good standing under the laws of
its jurisdiction of organization, and is duly qualified as a foreign
corporation or other legal entity and is in good standing in each
jurisdiction in which such qualification is required by law, other than
those jurisdictions as to which the failure to be so qualified or in
good standing could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. Each such Subsidiary has
the corporate or other power and authority to own or hold under lease
the properties it purports to own or hold under lease and to transact
the business it transacts and proposes to transact.
(d) No Subsidiary is a party to, or otherwise subject to any
legal restriction or any agreement (other than this Agreement, the
agreements listed in Schedule 5.4 and customary limitations imposed by
corporate law statutes) restricting the ability of such Subsidiary to
pay dividends out of profits or make any other similar distributions of
profits to the Company or any of its Subsidiaries that owns outstanding
shares of capital stock or similar equity interests of such Subsidiary.
(e) Financial Statements.
The Company has delivered to you copies of the financial
statements of the Company and its Subsidiaries listed in Schedule 5.5.
All of said financial statements (including in each case the related
schedules and notes) fairly present in all material respects the
consolidated financial position of the Company and its Subsidiaries as
of the respective dates specified in such Schedule and the consolidated
results of their operations and cash flows for the respective periods so
specified and have been prepared in accordance with GAAP consistently
applied throughout the periods involved except as set forth in the notes
thereto (subject, in the case of any interim financial statements, to
normal year-end adjustments made in accordance with GAAP).
(f) Compliance with Laws, Other Instruments, etc.
The execution, delivery and performance by the Company of this
Agreement and the Notes will not (i) contravene, result in any breach
of, or constitute a default under, or result in the creation of any Lien
in respect of any property of the Company or any Subsidiary under, any
indenture, mortgage, deed of trust, loan, purchase or credit agreement,
lease, corporate charter or by-laws, or any other agreement or
instrument to which the Company or any Subsidiary is bound or by which
the Company or any Subsidiary or any of their respective properties may
be bound or affected, (ii) conflict with or result in a breach of any of
the terms, conditions or provisions of any order, judgment, decree, or
ruling of any court, arbitrator or Governmental Authority applicable to
the Company or any Subsidiary or (iii) violate any provision of any
statute or other rule or regulation of any Governmental Authority
applicable to the Company or any Subsidiary.
(g) Governmental Authorizations, etc.
No consent, approval or authorization of, or registration, filing
or declaration with, any Governmental Authority is required for the
validity of the execution, delivery or performance by the Company of
this Agreement or the Notes. Specifically, and without limitation of
the foregoing, no registration of the Notes is required under the
Securities Act, the Securities Exchange Act, or the Texas Securities
Act, and no indenture with respect to the Notes is required to be
qualified under the Trust Indenture Act of 1939.
(h) Litigation; Observance of Agreements, Statutes and Orders.
(a) Except as disclosed in Schedule 5.8, there are no actions,
suits or proceedings pending or, to the knowledge of the Company,
threatened against or affecting the Company or any Subsidiary or any
property of the Company or any Subsidiary in any court or before any
arbitrator of any kind or before or by any Governmental Authority that,
individually or in the aggregate, could reasonably be expected to have
a Material Adverse Effect.
(b) Neither the Company nor any Subsidiary is in default under
any term of any agreement or instrument to which it is a party or by
which it is bound, or any order, judgment, decree or ruling of any
court, arbitrator or Governmental Authority or is in violation of any
applicable law, ordinance, rule or regulation (including without
limitation Environmental Laws) of any Governmental Authority, which
default or violation, individually or in the aggregate, could reasonably
be expected to have a Material Adverse Effect.
(i) Taxes
The Company and its Subsidiaries have filed all tax returns that
are required to have been filed in any jurisdiction, and have paid all
taxes shown to be due and payable on such returns and all other taxes
and assessments levied upon them or their properties, assets, income or
franchises, to the extent such taxes and assessments have become due and
payable and before they have become delinquent, except for any taxes and
assessments (a) currently payable without penalty or interest, (b) the
amount of which is not individually or in the aggregate Material or (c)
the amount, applicability or validity of which is currently being
contested in good faith by appropriate proceedings and with respect to
which the Company or a Subsidiary, as the case may be, has established
adequate reserves in accordance with GAAP. The Company knows of no
basis for any other tax or assessment that individually or in the
aggregate might be Material. The charges, accruals and reserves on the
books of the Company and its Subsidiaries in respect of Federal, state
or other taxes for all fiscal periods are adequate. The Federal income
tax liabilities of the Company and its Subsidiaries have been determined
by the Internal Revenue Service and paid for all fiscal years up to and
including the fiscal year ended December 31, 1993.
(j) Title to Property; Leases.
The Company and its Subsidiaries have good and marketable title
to their respective real properties and good and sufficient title to
their respective other properties that individually or in the aggregate
are Material, including all such properties reflected in the most recent
audited balance sheet listed on Schedule 5.5 or purported to have been
acquired by the Company or any Subsidiary after said date (except as
sold or otherwise disposed of in the ordinary course of business), in
each case free and clear of Liens other than the Liens disclosed on
Schedule 5.15. All leases that individually or in the aggregate are
Material are valid and subsisting and are in full force and effect in
all material respects.
(k) Licenses, Permits, etc.
Except as disclosed in Schedule 5.11,
(a) the Company and its Subsidiaries own or possess all
licenses, permits, franchises, authorizations, patents,
copyrights, service marks, trademarks and trade names, or rights
thereto, that individually or in the aggregate are Material,
without known conflict with the rights of others;
(b) to the best knowledge of the Company, no product of the
Company infringes in any material respect any license, permit,
franchise, authorization, patent, copyright, service xxxx,
trademark, trade name or other right owned by any other Person;
and
(c) to the best knowledge of the Company, there is no
Material violation by any Person of any right of the Company or
any of its Subsidiaries with respect to any patent, copyright,
service xxxx, trademark, trade name or other right owned or used
by the Company or any of its Subsidiaries.
(l) Compliance with ERISA.
(a) The Company and each ERISA Affiliate have operated and
administered each Plan in compliance with all applicable laws
except for such instances of noncompliance as have not resulted
in and could not reasonably be expected to result in a Material
Adverse Effect. Neither the Company nor any ERISA Affiliate has
incurred any liability pursuant to Title I or IV of ERISA or the
penalty or excise tax provisions of the Code relating to employee
benefit plans (as defined in Section 3 of ERISA), and no event,
transaction or condition has occurred or exists that could
reasonably be expected to result in the incurrence of any such
liability by the Company or any ERISA Affiliate, or in the
imposition of any Lien on any of the rights, properties or assets
of the Company or any ERISA Affiliate, in either case pursuant to
Title I or IV of ERISA or to such penalty or excise tax provisions
or to Section 401(a)(29) or 412 of the Code, other than such
liabilities or Liens as would not be individually or in the
aggregate Material.
(b) The present value of the aggregate benefit liabilities
under each of the Plans (other than Multiemployer Plans),
determined as of the end of such Plan's most recently ended plan
year on the basis of the actuarial assumptions specified for
funding purposes in such Plan's most recent actuarial valuation
report, did not exceed the aggregate current value of the assets
of such Plan allocable to such benefit liabilities. The term
"benefit liabilities" has the meaning specified in section 4001
of ERISA and the terms "current value" and "present value" have
the meaning specified in section 3 of ERISA.
(c) The Company and its ERISA Affiliates have not incurred
withdrawal liabilities (and are not subject to contingent
withdrawal liabilities) under section 4201 or 4204 of ERISA in
respect of Multiemployer Plans that individually or in the
aggregate are Material.
(d) The expected postretirement benefit obligation
(determined as of the last day of the Company's most recently
ended fiscal year in accordance with Financial Accounting
Standards Board Statement No. 106, without regard to liabilities
attributable to continuation coverage mandated by section 4980B
of the Code) of the Company and its Subsidiaries is not Material.
(m) Private Offering by the Company.
Neither the Company nor anyone acting on its behalf has offered
the Notes or any similar securities for sale to, or solicited any offer
to buy any of the same from, or otherwise approached or negotiated in
respect thereof with, any person other than you and the Other
Purchasers, each of which has been offered the Notes at a private sale
for investment. Neither the Company nor anyone acting on its behalf has
taken, or will take, any action that would subject the issuance or sale
of the Notes to the registration requirements of Section 5 of the
Securities Act or the Texas Securities Act, or require registration
under the Exchange Act, or the qualification of an indenture with
respect to the Notes under the Trust Indenture Act of 1939.
(n) Use of Proceeds; Margin Regulations.
The Company will apply the proceeds of the sale of the Notes for
general corporate purposes. No part of the proceeds from the sale of
the Notes hereunder will be used, directly or indirectly, for the
purpose of buying or carrying any margin stock within the meaning of
Regulation G or Regulation U of the Board of Governors of the Federal
Reserve System, or for the purpose of buying or carrying or trading in
any securities under such circumstances as to involve the Company in a
violation of Regulation X of said Board or to involve any broker or
dealer in a violation of Regulation T of said Board. Margin stock does
not constitute more than 5% of the value of the consolidated assets of
the Company and its Subsidiaries and the Company does not have any
present intention that margin stock will constitute more than 5% of the
value of such assets. As used in this Section, the terms "margin stock"
and "purpose of buying or carrying" shall have the meanings assigned to
them in said Regulation U.
(o) Existing Indebtedness; Future Liens.
(a) Schedule 5.15 sets forth a complete and correct list of
all outstanding Indebtedness of the Company and its Subsidiaries
as of March 31, 1995, since which date there has been no Material
change in the amounts, interest rates, sinking funds, instalment
payments or maturities of the Indebtedness of the Company or its
Subsidiaries. Neither the Company nor any Subsidiary is in
default, and no waiver of default is currently in effect, in the
payment of any principal or interest on any Indebtedness of the
Company or such Subsidiary and no event or condition exists with
respect to any Indebtedness of the Company or any Subsidiary that
would permit (or that with notice or the lapse of time, or both,
would permit) one or more Persons to cause such Indebtedness to
become due and payable before its stated maturity or before its
regularly scheduled dates of payment.
(b) Except as disclosed in Schedule 5.15, neither the Company
nor any Subsidiary has agreed or consented to cause or permit in
the future (upon the happening of a contingency or otherwise) any
of its property, whether now owned or hereafter acquired, to be
subject to a Lien not permitted by Section 10.1.
(p) Foreign Assets Control Regulations, etc.
Neither the sale of the Notes by the Company hereunder nor its use
of the proceeds thereof will violate the Trading with the Enemy Act, as
amended, or any of the foreign assets control regulations of the United
States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended)
or any enabling legislation or executive order relating thereto.
(q) Status under Certain Statutes.
Neither the Company nor any Subsidiary is subject to regulation
under the Investment Company Act of 1940, as amended, the Public Utility
Holding Company Act of 1935, as amended, the Interstate Commerce Act, as
amended, or the Federal Power Act, as amended.
(r) Environmental Matters.
Neither the Company nor any Subsidiary has knowledge of any claim
or has received any notice of any claim, and no proceeding has been
instituted raising any claim against the Company or any of its
Subsidiaries or any of their respective real properties now or formerly
owned, leased or operated by any of them or other assets, alleging any
damage to the environment or violation of any Environmental Laws,
except, in each case, such as could not reasonably be expected to result
in a Material Adverse Effect. Except as otherwise disclosed to you in
writing prior to your execution and delivery of this Agreement,
(a) neither the Company nor any Subsidiary has knowledge of
any facts which would give rise to any claim, public or private,
of violation of Environmental Laws or damage to the environment
emanating from, occurring on or in any way related to real
properties now or formerly owned, leased or operated by any of
them or to other assets or their use, except, in each case, such
as could not reasonably be expected to result in a Material
Adverse Effect;
(b) neither the Company nor any of its Subsidiaries has
stored any Hazardous Materials on real properties now or formerly
owned, leased or operated by any of them and has not disposed of
any Hazardous Materials in a manner contrary to any Environmental
Laws in each case in any manner that could reasonably be expected
to result in a Material Adverse Effect; and
(c) all buildings on all real properties now owned, leased or
operated by the Company or any of its Subsidiaries are in
compliance with applicable Environmental Laws, except where
failure to comply could not reasonably be expected to result in
a Material Adverse Effect.
(s) Status under the Internal Revenue Code of 1986.
Assuming the accuracy of the representations and warranties, and
compliance with the covenants made by or on behalf of the Purchaser and
the Beneficial Owner under this Agreement and the Notes, (i) each of the
Notes meets the requirements of Section 871(h)(2)(B) or 881(c)(2)(B) of
the Internal Revenue Code of 1986, as amended (the "Code"), (ii) in the
case of Notes beneficially owned by a nonresident alien individual,
interest paid on the Notes will constitute "portfolio interest" as such
term is defined in Section 871(h)(2) of the Code, and (iii) in the case
of Notes beneficially owned by a foreign corporation, interest paid on
the Notes will constitute "portfolio interest" as such term is defined
in Section 881(c)(2) of the Code.
(12) REPRESENTATIONS OF THE PURCHASER.
You represent and warrant to the Company that the following are
true and correct as of the date hereof and will be true and correct
through the date of the Closing as if made on such date.
(a) Purchase of Notes.
You represent that you are purchasing the Notes for the account
of one or more investors who to your knowledge are "accredited
investors" as such term is defined in Rule 501 promulgated under the
Securities Act or to whom the sale of the Notes would otherwise be
permitted without registration under the Securities Act pursuant to
Regulation S, and not with a view to the distribution thereof, provided
that the disposition of their property shall at all times be within
their control. You understand that the Notes have not been registered
under the Securities Act and may be resold only if registered pursuant
to the provisions of the Securities Act or if an exemption from
registration is available, except under circumstances where neither such
registration nor such an exemption is required by law, and that the
Company is not required to register the Notes.
(b) Source of Funds.
You represent that to your knowledge the funds to be used by the
Beneficial Owner to pay the purchase price of the Notes to be purchased
hereunder are funds from sources legally available for such purchase in
accordance with applicable law.
(c) Independent Analysis.
You represent that to your knowledge, the Beneficial Owner or its
agent has performed its own independent analysis of the Company and its
business, financial condition, and prospects.
(d) Brokers and Finders.
You represent that there are no agent's, broker's or finder's fees
or commissions payable to you by the Company in connection with the
Notes purchased hereunder.
(e) Representations Relating to U.S. Tax Withholding Obligations.
(a) You represent that you are a bank not incorporated under the
laws of the United States of America or any State thereof.
(b) You represent that you are a securities clearing organization,
a bank, or another financial institution that holds customers'
securities in the ordinary course of your trade or business.
(c) So long as you are the record holder of the Notes purchased
hereunder, you will promptly notify the Company of any change, of which
you have knowledge, in beneficial ownership of the Notes purchased
hereunder, and will state whether to your knowledge any such change
results in a U.S. person, firm, or corporation becoming a beneficial
owner of the Notes purchased hereunder or any portion thereof.
(d) You represent that you have informed the Beneficial Owner
that the Notes may not be sold or transferred, except as follows: (i)
record ownership may be transferred only to another non-U.S. bank or
other entity which complies with 6.5(b) above; and (ii) beneficial
ownership may be transferred only to foreign (non-U.S.) persons.
(e) You understand that the Notes must bear a legend restricting
ownership and transfer to only foreign (non-U.S.) persons.
(13) INFORMATION AS TO COMPANY.
(a) Financial and Business Information.
The Company shall deliver to each Holder of Notes that is an
Institutional Investor:
Quarterly Statements -- within two (2) Business Days
after the day that is 45 days after the end of each quarterly
fiscal period in each fiscal year of the Company (other than the
last quarterly fiscal period of each such fiscal year), duplicate
copies of,
(i) a consolidated balance sheet of the Company and its
Subsidiaries as at the end of such quarter, and
(ii) consolidated statements of income, changes in
shareholders' equity and cash flows of the Company and its
Subsidiaries, for such quarter and (in the case of the second
and third quarters) for the portion of the fiscal year ending
with such quarter,
setting forth in each case in comparative form the figures for the
corresponding periods in the previous fiscal year, all in
reasonable detail, prepared in accordance with GAAP applicable to
quarterly financial statements generally, and certified by a
Senior Financial Officer as fairly presenting, in all material
respects, the financial position of the companies being reported
on and their results of operations and cash flows, subject to
changes resulting from year-end adjustments, provided that
delivery within the time period specified above of copies of the
Company's Quarterly Report on Form 10-Q prepared in compliance
with the requirements therefor and filed with the Securities and
Exchange Commission shall be deemed to satisfy the requirements
of this Section 7.1(a);
(b) Annual Statements -- within two (2) Business Days after
the day that is 90 days after the end of each fiscal year of the
Company, duplicate copies of,
(i) a consolidated balance sheet of the Company and its
Subsidiaries as at the end of such year, and
(ii) consolidated statements of income, changes in
shareholders, equity and cash flows of the Company and its
Subsidiaries for such year,
setting forth in each case in comparative form the figures for the
previous fiscal year, all in reasonable detail, prepared in
accordance with GAAP, and accompanied
(A) by an opinion thereon of independent public
accountants of recognized national standing, which opinion
shall state that such financial statements present fairly, in
all material respects, the financial position of the companies
being reported upon and their results of operations and cash
flows and have been prepared in conformity with GAAP, and that
the examination of such accountants in connection with such
financial statements has been made in accordance with
generally accepted auditing standards, and that such audit
provides a reasonable basis for such opinion in the
circumstances, and
(B) a certificate of such accountants stating that they
have reviewed Sections 10.2, 10.3, and 10.5 of this Agreement
and stating further whether, in making their audit, they have
become aware of any condition or event that then constitutes
a Default or an Event of Default under said Sections, and, if
they are aware that any such condition or event then exists,
specifying the nature and period of the existence thereof (it
being understood that such accountants shall not be liable,
directly or indirectly, for any failure to obtain knowledge of
any Default or Event of Default unless such accountants should
have obtained knowledge thereof in making an audit in
accordance with generally accepted auditing standards or did
not make such an audit),
provided that the delivery within the time period specified above
of the Company's Annual Report on Form 10-K for such fiscal year
(together with the Company's annual report to shareholders, if
any, prepared pursuant to Rule 14a-3 under the Exchange Act)
prepared in accordance with the requirements therefor and filed
with the Securities and Exchange Commission, together with the
accountant's certificate described in clause (B) above, shall be
deemed to satisfy the requirements of this Section 7.1(b);
(c) SEC and Other Reports -- promptly upon their becoming
available, one copy of (i) each financial statement, report,
notice or proxy statement sent by the Company or any Subsidiary
generally to its shareholders or to its creditors (other than the
Company or another Subsidiary), and (ii) each regular or periodic
report, each registration statement (without exhibits except as
expressly requested by such Holder), and each prospectus and all
amendments thereto filed by the Company or any Subsidiary with the
Securities and Exchange Commission and of each press release and
other statement made available generally by the Company or any
Subsidiary to the public concerning developments that are
Material;
(d) Notice of Default or Event of Default -- promptly, and in
any event within five days after a Responsible Officer becoming
aware of the existence of any Default or Event of Default, a
written notice specifying the nature and period of existence
thereof and what action the Company is taking or proposes to take
with respect thereto;
(e) ERISA Matters -- promptly, and in any event within five
days after a Responsible Officer becoming aware of any of the
following, a written notice setting forth the nature thereof and
the action, if any, that the Company or an ERISA Affiliate
proposes to take with respect thereto:
(i) with respect to any Plan, any reportable event, as defined
in section 4043(b) of ERISA and the regulations thereunder,
for which notice thereof has not been waived pursuant to such
regulations as in effect on the date hereof; or
(ii) the taking by the PBGC of steps to institute, or the
threatening by the PBGC of the institution of, proceedings
under section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan, or the
receipt by the Company or any ERISA Affiliate of a notice from
a Multiemployer Plan that such action has been taken by the
PBGC with respect to such Multiemployer Plan; or
(iii) any event, transaction or condition that could result in
the incurrence of any liability by the Company or any ERISA
Affiliate pursuant to Title I or IV of ERISA or the penalty or
excise tax provisions of the Code relating to employee benefit
plans, or in the imposition of any Lien on any of the rights,
properties or assets of the Company or any ERISA Affiliate
pursuant to Title I or IV of ERISA or such penalty or excise
tax provisions, if such liability or Lien, taken together with
any other such liabilities or Liens then existing, could
reasonably be expected to have a Material Adverse Effect;
(f) Accountants Reports -- promptly, and in any event within
30 days of receipt thereof by a Responsible Officer of the
Company, copies of any report as to material inadequacies in
accounting controls submitted by independent accountants in
connection with any audit of the Company or any Subsidiary;
(g) Material Litigation -- promptly, and in any event within
30 days after a Responsible Officer of the Company becomes aware
of any litigation, arbitration or administrative proceedings,
whether instituted or, to the knowledge of the Company,
threatened, affecting the Company or any of its Subsidiaries and
which, if adversely determined, could be reasonably expected to
have a Material Adverse Effect, a written statement of a
Responsible Officer describing the nature and status of such
matters and what action the Company or a Subsidiary has taken, is
taking or proposes to take with respect thereto;
(h) Notices from Governmental Authority -- promptly, and in
any event within 30 days of receipt thereof, copies of any notice
to the Company or any Subsidiary from any Federal or state
Governmental Authority relating to any order, ruling, statute or
other law or regulation that could reasonably be expected to have
a Material Adverse Effect;
(i) Requested Information -- with reasonable promptness, such
other data and information relating to the business, operations,
affairs, financial condition, assets or properties of the Company
or any of its Subsidiaries or relating to the ability of the
Company to perform its obligations hereunder and under the Notes
as from time to time may be reasonably requested by any such
Holder of Notes.
(b) Officer's Certificate.
Each set of financial statements delivered to a Holder of Notes
pursuant to Section 7.1(a) or Section 7.1(b) shall be accompanied by a
certificate of a Senior Financial Officer setting forth:
(a) Covenant Compliance -- the information (including
detailed calculations) required in order to establish whether the
Company was in compliance with the requirements of Sections 10.2
and 10.3 during the quarterly or annual period covered by the
statements then being furnished (including with respect to each
such Section, where applicable, the calculations of the maximum
or minimum amount, ratio or percentage, as the case may be,
permissible under the terms of such Sections, and the calculation
of the amount, ratio or percentage then in existence); and
(b) Default -- a statement that such Senior Financial Officer
has reviewed the relevant terms hereof and has made, or caused to
be made, under his or her supervision, a review of the
transactions and conditions of the Company and its Subsidiaries
from the beginning of the quarterly or annual period covered by
the statements then being furnished to the date of the certificate
and that such review shall not have disclosed the existence during
such period of any condition or event that constitutes a Default
or an Event of Default or, if any such condition or event existed
or exists (including, without limitation, any such event or
condition resulting from the failure of the Company or any
Subsidiary to comply with any Environmental Law), specifying the
nature and period of existence thereof and what action the Company
shall have taken or proposes to take with respect thereto.
(c) Inspection.
The Company shall permit the representatives of each Holder of
Notes that is an Institutional Investor:
(a) No Default -- if no Default or Event of Default then
exists, at the expense of such Holder and upon reasonable prior
notice to the Company, to visit the principal executive office of
the Company, to discuss the affairs, finances and accounts of the
Company and its Subsidiaries with the Company's officers, and
(with the consent of the Company, which consent will not be
unreasonably withheld) its independent public accountants, and
(with the consent of the Company, which consent will not be
unreasonably withheld) to visit the other offices and properties
of the Company and each Subsidiary, all at such reasonable times
and as often as may be reasonably requested in writing; and
(b) Default -- if a Default or Event of Default then exists,
at the expense of the Company, to visit and inspect any of the
offices or properties of the Company or any Subsidiary, to examine
all their respective books of account, records, reports and other
papers, to make copies and extracts therefrom, and to discuss
their respective affairs, finances and accounts with their
respective officers, employees and independent public accountants
(and by this provision the Company authorizes said accountants to
discuss the affairs, finances and accounts of the Company and its
Subsidiaries), all at such times and as often as may be requested.
(14) PREPAYMENT OF THE NOTES.
In addition to the payment of the entire unpaid principal amount
of the Notes at the final maturity thereof, the Company will make
required prepayments in respect of the Notes, and under certain
circumstances may be required to offer to prepay all Notes, as
hereinafter provided.
(a) Prepayment in Connection with a Change of Control.
Promptly and in any event within five Business Days after the
occurrence of a Change of Control, the Company will give written notice
thereof to the Holders of all outstanding Notes, which notice shall (a)
refer specifically to this Section 8.1, (b) describe the Change of
Control in reasonable detail and specify the Change of Control
Prepayment Date and the Response Date (as respectively defined below) in
respect thereof, and (c) offer to prepay all Notes at the Redemption
Price on the date therein specified (the "Change of Control Prepayment
Date"), which shall be not less than 10 nor more than 30 days after the
date of such notice is given. In the event that the Company shall fail
to give any notice required above within five Business Days after being
requested to do so by the Holder of any Note, such Holder may give such
notice (with a copy thereof to the Company), which notice shall have the
same effect as if given by the Company. Each Holder of a Note will
notify the Company of such Holder's acceptance or rejection of such
offer by giving written notice of such acceptance or rejection to the
Company at least five days prior to the Change of Control Prepayment
Date (the "Response Date"), except that the failure by any such Holder
to respond in writing to such offer on or before the Response Date shall
be deemed to be an acceptance of such offer by such Holder in respect of
such Change of Control. The Company shall prepay on the Change of
Control Prepayment Date all of the Notes held by the Holders as to which
such offer has been so accepted, at the Redemption Price. If any Holder
shall reject such offer, such Holder shall be deemed to have waived its
rights under this Section 8.1 to require prepayment of all Notes held by
such Holder in respect of such Change of Control but not in respect of
any subsequent Change of Control.
If the Change of Control Prepayment Date does not occur on the
last day of an Interest Period, the Company shall also pay each Holder
of a Series C Note then being prepaid an amount equal to the LIBOR
Funding Loss Amount with respect to such Series C Note, as specified by
written notice given by the Holder of such Series C Note at least two
Business Days prior to the Change of Control Prepayment Date (or, if
such notice is subsequently given by such Holder, within two Business
Days after receipt of such notice by the Company). The obligation of
the Company to pay such LIBOR Funding Loss Amount with respect to the
prepayment of any Series C Note pursuant to this Section 8.1 shall
survive the prepayment of such Series C Note and the termination of this
Agreement.
(b) Allocation of Partial Prepayments.
In the case of each partial prepayment of the Notes, the principal
amount of the Notes to be prepaid shall be allocated among all of the
Notes at the time outstanding in proportion, as nearly as practicable,
to the respective unpaid principal amounts thereof.
(c) Maturity; Surrender, etc.
In the case of each prepayment of Notes pursuant to this
Section 8, the principal amount of each Note to be prepaid shall mature
and become due and payable on the date fixed for such prepayment,
together with interest on such principal amount accrued to such date.
From and after such date, unless the Company shall fail to pay such
principal amount when so due and payable, together with the interest, if
any, as aforesaid, interest on such principal amount shall cease to
accrue. Any Note paid or prepaid in full shall be surrendered to the
Company and cancelled and shall not be reissued, and no Note shall be
issued in lieu of any prepaid principal amount of any Note.
(d) Purchase or Optional Redemption of Notes.
The Company will not and will not permit any Affiliate to
purchase, redeem, prepay or otherwise acquire, directly or indirectly,
any of the outstanding Notes except (a) upon the payment or prepayment
of the Notes in accordance with the terms of this Agreement and the
Notes or (b) pursuant to a notice of optional redemption pursuant to
Section 1.4 hereof made by the Company or any such Affiliate to the
Holders of all Notes at the time outstanding to redeem Notes on the same
terms and conditions, pro rata among all Notes tendered.
Any Notes so repurchased or redeemed shall immediately upon
acquisition thereof be cancelled and no Notes shall be issued in
substitution or exchange therefor, except as provided in Section 1.4.
Promptly and in any event within five Business Days after each
such purchase or redemption of Notes, the Company will furnish each
Holder of the Notes with a certificate of a Senior Financial Officer
describing such purchase (including the aggregate principal amount of
Notes so purchased and the purchase price therefor) and certifying that
such purchase was made in compliance with the requirements of this
Section.
(15) AFFIRMATIVE COVENANTS.
The Company covenants that so long as any of the Notes are
outstanding:
(a) Compliance with Law.
The Company will and will cause each of its Subsidiaries to comply
with all laws, ordinances or governmental rules or regulations to which
each of them is subject, including without limitation Environmental
Laws, and will obtain and maintain in effect all licenses, certificates,
permits, franchises and other governmental authorizations necessary to
the ownership of their respective properties or to the conduct of their
respective businesses, in each case to the extent necessary to ensure
that non-compliance with such laws, ordinances or governmental rules or
regulations or failures to obtain or maintain in effect such licenses,
certificates, permits, franchises and other governmental authorizations
could not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect.
(b) Insurance.
The Company will and will cause each of its Subsidiaries to
maintain, with financially sound and reputable insurers rated "A" or
better by A.M. Best Company, Inc., insurance with respect to their
respective properties and businesses against such casualties and
contingencies, of such types, on such terms and in such amounts
(including deductibles and co-insurance) as is customary in the case of
entities of established reputations engaged in the same or a similar
business and similarly situated.
(c) Maintenance of Properties.
The Company will and will cause each of its Subsidiaries to
maintain and keep, or cause to be maintained and kept, their respective
properties in good repair, working order and condition (other than
ordinary wear and tear), so that the business carried on in connection
therewith may be properly conducted at all times, provided that this
Section shall not prevent the Company or any Subsidiary from
discontinuing the operation and the maintenance of any of its properties
if such discontinuance is desirable in the conduct of its business and
the Company has concluded that such discontinuance could not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
(d) Payment of Taxes and Claims.
The Company will and will cause each of its Subsidiaries to file
all tax returns required to be filed in any jurisdiction and to pay and
discharge all taxes shown to be due and payable on such returns and all
other taxes, assessments, governmental charges, or levies imposed on
them or any of their properties, assets, income or franchises, to the
extent such taxes and assessments have become due and payable and before
they have become delinquent and all claims for which sums have become
due and payable that have or might become a Lien on properties or assets
of the Company or any Subsidiary, provided that neither the Company nor
any Subsidiary need pay any such tax or assessment or claim if (i) the
amount, applicability or validity thereof is contested by the Company or
such Subsidiary on a timely basis in good faith and in appropriate
proceedings, and the Company or a Subsidiary has established adequate
reserves therefor in accordance with GAAP on the books of the Company or
such Subsidiary or (ii) the nonpayment of all such taxes and assessments
in the aggregate could not reasonably be expected to have a Material
Adverse Effect.
(e) Corporate Existence, etc.
The Company will at all times preserve and keep in full force and
effect its corporate existence. Subject to Sections 10.5 and 10.6, the
Company will at all times preserve and keep in full force and effect the
corporate existence of each of its Subsidiaries (unless merged into the
Company or a Subsidiary) and all rights and franchises (as franchises)
of the Company and its Subsidiaries unless, in the good faith judgment
of the Company, the termination of or failure to preserve and keep in
full force and effect such corporate existence, right or franchise could
not, individually or in the aggregate, have a Material Adverse Effect.
(f) Lines of Business.
The Company and its Subsidiaries will remain engaged solely in the
business of owning and operating family restaurant/entertainment
centers, and other businesses directly related thereto.
(16) NEGATIVE COVENANTS.
The Company covenants that so long as any of the Notes are
outstanding:
(a) Liens.
(a) The Company will not, and will not permit any Subsidiary
to create, assume, incur or suffer to exist any Lien upon or with
respect to any property or assets, whether now owned or hereafter
acquired, securing any Indebtedness, provided that nothing in this
Section 10.1 shall prohibit
(i) Liens in respect of property of the Company or a
Subsidiary existing on the date of the Closing and described
in Schedule 5.15, and Liens relating to any extension, renewal
or replacement of Indebtedness secured by any such Lien as
described in Schedule 5.15, provided that the principal amount
of Indebtedness secured by any such Lien is not increased and
such Lien does not extend to or cover any property of the
Company or such Subsidiary, as the case may be, other than the
property covered by such Lien on the date of Closing;
(ii) Liens in respect of property acquired by the Company
or a Subsidiary after the date of Closing, (A) existing on
such property at the time of acquisition thereof (and not
incurred in anticipation thereof), whether or not Indebtedness
secured thereby is assumed by the Company or a Subsidiary, or
(B) created within 180 days after acquisition or completion of
construction of improvements on such property, to secure
Indebtedness assumed or incurred to finance all or any part of
the purchase price or cost of construction of improvements on
such property, or (C) in the case of any Person that hereafter
becomes a Subsidiary or is consolidated with or merged with or
into the Company or a Subsidiary or sells, leases or otherwise
disposes of all or substantially all of its property to the
Company or a Subsidiary, existing at the time such Person
becomes a Subsidiary or is so consolidated or merged or
effects such sale, lease or other disposition of property (and
not incurred in anticipation thereof), provided that in any
such case
(x) no such Lien shall extend to or cover any other
property of the Company or such Subsidiary, as the case
may be,
(y) the aggregate principal amount of Indebtedness
secured by all such Liens in respect of any such property
shall not exceed the cost of such property at the time of
such acquisition or, in the case of a Lien in respect of
property existing at the time of such Person becoming a
Subsidiary or being so consolidated or merged or
effecting such sale, lease or other disposition, the fair
market value of such property at such time, and
(z) no Lien may be created pursuant to subclause (B)
above prior to December 31, 1996;
(iii) Liens securing Indebtedness owed by a Subsidiary to
the Company or to a Wholly-Owned Subsidiary; and
(iv) Liens securing reimbursement obligations in
connection with letters of credit obtained by the Company or
a Subsidiary, provided that the aggregate unpaid principal
amount of Indebtedness in respect of such letters of credit
secured by such Liens permitted by this Section 10.1(a)(iv)
does not at any time exceed $5,000,000.
For purposes of this Section 10.1(a) any Lien existing in respect of
property at the time such property is acquired or in respect of property
of a Person at the time such Person is acquired, consolidated or merged
with or into the Company or a Subsidiary shall be deemed to have been
created at that time.
(b) In case any property is subjected to a Lien in violation
of Section 10.1(a), the Company will make or cause to be made
effective provision whereby the Notes will be secured equally and
ratably with all Indebtedness and other obligations secured by
such Lien, and in any case the Notes shall have the benefit, to
the full extent that, and with such priority as, the Holders may
be entitled thereto under applicable law, of an equitable lien on
such property securing the Notes. Such violation of
Section 10.1(a) shall constitute an Event of Default hereunder,
whether or not any such provision is made pursuant to this
Section 10.1(b).
(b) Maintenance of Financial Conditions.
(a) The Company will not at any time prior to the last day of
the fiscal year ending on or about December 31, 1995 permit
Consolidated Net Worth to be less than $115,000,000 and thereafter
the Company will not at any time permit Consolidated Net Worth to
be less than the sum of (i) $115,000,000 plus (ii) 75% of
Consolidated Net Income for each fiscal year ending after the date
of the Closing (but without any deduction for any consolidated net
loss in any fiscal year) plus (iii) 100% of the net cash proceeds
of all sales of equity securities by the Company after the date
of the Closing.
(b) The Company will not permit the sum of EBITDA plus
Consolidated Operating Lease Rentals for the periods of two and
three consecutive quarterly accounting periods respectively ending
on or about June 30 and September 30, 1995 to be less than 150%
of Consolidated Interest Expense plus Consolidated Operating Lease
Rentals for such periods, and thereafter the Company will not
permit the sum of EBITDA plus Consolidated Operating Lease Rentals
for any period of four consecutive quarterly accounting periods
to be less than the applicable percentage of the sum of
Consolidated Interest Expense plus Consolidated Operating Lease
Rentals for such period specified below:
Four Quarterly
Accounting Periods Applicable
Ending on or About Percentage
------------------ -----------
June 30, 1995 to September 30, 1996 150%
thereafter to September 30, 1997 175%
thereafter 200%
(c) The Company will not permit Consolidated Indebtedness as
of the last of any quarterly accounting period (commencing with
such accounting period ending on or about June 30, 1995) to exceed
175% of EBITDA for the four consecutive quarterly accounting
periods then ended.
(c) Asset Sales.
The Company will not and will not permit any Subsidiary to,
directly or indirectly, make any sale, transfer, lease (as lessor), loan
or other disposition of any property or assets (an "Asset Sale") other
than
(a) Asset Sales in the ordinary course of business,
(b) Asset Sales of property or assets by a Subsidiary to the
Company or a Wholly-Owned Subsidiary or a Person then becoming a
Wholly-Owned Subsidiary,
(c) Asset Sales consisting of the Company's investment as of the
date of this Agreement in shares or Indebtedness issued by the
owner of Monterey Tex-Mex Restaurants, and
(d) other Asset Sales, provided that
(i) immediately before and after giving effect to each such
Asset Sale, no Default or Event of Default shall have occurred and
be continuing, and
(ii) the aggregate net book value of property or assets
disposed of in each such Asset Sale and all other Asset Sales by
the Company and its Subsidiaries (A) during the immediately
preceding twelve months does not exceed 5% of Consolidated
Capitalization and (B) during the period from the date of the
Closing to and including the effective date of such proposed Asset
Sale does not exceed 10% of Consolidated Capitalization (in each
case determined as of the last day of the quarterly accounting
period ending on or most recently prior to the effective date of
such proposed Asset Sale), and
such Asset Sales in the aggregate shall not involve a substantial
number of Xxxxx X. Cheese's restaurants (except in connection with
closings in the ordinary course of business) or any intangible
assets related to Xxxxx X. Cheese's restaurants generally,
and provided further that for purposes of clause (ii) above there
shall be excluded the net book value of property or assets disposed
of in an Asset Sale if and to the extent such Asset Sale is made
for cash, payable in full upon the completion of such Asset Sale,
and an amount equal to the net proceeds realized upon such Asset
Sale is applied by the Company or such Subsidiary, as the case may
be, within one year after the effective date of such Asset Sale (x)
to reinvest in similar categories of property or assets for use in
the business of the Company and its Subsidiaries (but not in a
transaction Permitted by Section 10.1(a)(ii)) or (y) to repay
Indebtedness (which may, at the sole option of the Company, include
the purchase of Notes pursuant to an offer to purchase Notes
pursuant to Section 8.4).
For purposes of this Section 10.3 any shares of Voting Stock of a
Subsidiary that are the subject of an Asset Sale shall be valued at the
greater of (1) the fair market value of such shares as determined in
good faith by the Board of Directors of the Company and (2) the
aggregate net book value of the assets of such Subsidiary multiplied by
a fraction of which the numerator is the aggregate number of shares of
Voting Stock of such Subsidiary disposed of in such Asset Sale and the
denominator is the aggregate number of shares of Voting Stock of such
Subsidiary outstanding immediately prior to such Asset Sale.
(d) Merger, Consolidation, etc.
The Company will not and will not permit any Subsidiary to
consolidate with or merge with any other corporation or convey, transfer
or lease all or substantially all of its assets in a single transaction
or series of transactions to any Person except:
(a) a Subsidiary may consolidate with or merge with, convey
or transfer all or substantially all of its assets to
the Company (provided that the Company shall be the
continuing or surviving corporation) or a then existing
Wholly-Owned Subsidiary, or
any Person in an Asset Sale involving all of the outstanding
stock or all or substantially all of the assets of such Subsidiary,
in either case subject to the limitations of Section 10.3 and to
the further requirement that such Subsidiary does not at the time
of such Asset Sale own, directly or indirectly, any shares of
capital stock or any Indebtedness of any other Subsidiary not
simultaneously being sold as part of such Asset Sale; and
(b) the Company may consolidate with or merge with any other
corporation or convey or transfer all or substantially all of its
assets to a solvent corporation organized and existing under the
laws of the United States or any state thereof, provided that
(c) if the Company is not the continuing, surviving or
acquiring corporation (the "surviving corporation"), the surviving
corporation shall have (A) executed and delivered to each Holder of
a Note its assumption (pursuant to documentation in form and
substance reasonably satisfactory to the Required Holders) of the
due and punctual performance and observance of all obligations of
the Company under this Agreement, the Other Agreements and the
Notes and (B) caused to be delivered to each Holder of a Note an
opinion of counsel reasonably satisfactory to the Required Holders
to the effect that all agreements or instruments effecting such
assumption are enforceable in accordance with their terms and
comply with the terms hereof, and
immediately after giving effect to such transaction, no Default or
Event of Default shall have occurred and be continuing and, if
applicable, the Company shall have given any notice required in
connection with such transaction under Section 8.1.
No such conveyance, transfer or lease of substantially all of the assets
of the Company shall have the effect of releasing the Company or any
successor corporation that shall theretofore have become such in the
manner prescribed in this Section 10.4 from its liability under this
Agreement or the Notes.
(e) Subsidiary Indebtedness.
The Company will not permit any Subsidiary to create, assume incur,
guarantee or otherwise become liable in respect of any Indebtedness
except
(a) Indebtedness securing Liens permitted by clause (i),
(ii) or (iii) of Section 10.1(a), and
(b) Indebtedness of a Wholly-Owned Subsidiary owing to the
Company or another Wholly-Owned Subsidiary.
For purposes of this Section 10.5, a Subsidiary shall be deemed to have
incurred Indebtedness in respect of any obligation previously owed to
the Company or to a Wholly-Owned Subsidiary on the date the obligee
ceases for any reason to be the Company or a Wholly-Owned Subsidiary and
a Person that hereafter becomes a Subsidiary shall be deemed at that
time to have incurred all of its outstanding Indebtedness.
(f) Transactions with Affiliates.
The Company will not and will not permit any Subsidiary to enter
into directly or indirectly any transaction or Material group of related
transactions (including without limitation the purchase, lease, sale or
exchange of properties of any kind or the rendering of any service) with
any Affiliate (other than the Company or another Subsidiary), except in
the ordinary course and pursuant to the reasonable requirements of the
Company's or such Subsidiary's business and upon fair and reasonable
terms no less favorable to the Company or such Subsidiary than would be
obtainable in a comparable arm's-length transaction with a Person not an
Affiliate.
(17) EVENTS OF DEFAULT.
An "Event of Default" shall exist if any of the following
conditions or events shall occur and be continuing:
(a) the Company defaults in the payment of any principal or
premium on any Note when the same becomes due and payable, whether
at maturity or at a date fixed for prepayment or by declaration or
otherwise; or
(b) the Company defaults in the payment of any interest on
any Note for more than five Business Days after the same becomes
due and payable; or
(c) the Company defaults in the performance of or compliance
with any term contained in Section 7.1(d), Section 8.1 or
Section 10.1 to 10.5, inclusive; or
(d) the Company defaults in the performance of or compliance
with any term contained herein (other than those referred to in
paragraphs (a), (b) and (c) of this Section 11) and such default is
not remedied within 30 days after a Responsible Officer obtaining
actual knowledge of such default; or
(e) any representation or warranty made in writing by or on
behalf of the Company or by any officer of the Company in this
Agreement or in any writing furnished in connection with the
transactions contemplated hereby proves to have been false or
incorrect in any material respect on the date as of which made; or
(f) the Company or any Subsidiary (i) is generally not
paying, or admits in writing its inability to pay, its debts as
they become due, (ii) files, or consents by answer or otherwise to
the filing against it of, a petition for relief or reorganization
or arrangement or any other petition in bankruptcy, for liquidation
or to take advantage of any bankruptcy, insolvency, reorganization,
moratorium or other similar law of any jurisdiction, (iii) makes an
assignment for the benefit of its creditors, (iv) consents to the
appointment of a custodian, receiver, trustee or other officer with
similar powers with respect to it or with respect to any
substantial part of its property, (v) is adjudicated as insolvent
or to be liquidated, or (vi) takes corporate action for the purpose
of any of the foregoing; or
(g) a court or governmental authority of competent
jurisdiction enters an order appointing, without consent by the
Company or any Subsidiary, a custodian, receiver, trustee or other
officer with similar powers with respect to it or with respect to
any substantial part of its property, or constituting an order for
relief or approving a petition for relief or reorganization or any
other petition in bankruptcy or for liquidation or to take
advantage of any bankruptcy or insolvency law of any jurisdiction,
or ordering the dissolution, winding-up or liquidation of the
Company or any Subsidiary, or any such petition shall be filed
against the Company or any Subsidiary and such petition shall not
be dismissed within 60 days; or
(h) a final judgment or judgments for the payment of money
aggregating in excess of $500,000 are rendered against one or more
of the Company and its Subsidiaries which judgments are not, within
60 days after entry thereof, bonded, paid, discharged or stayed
pending appeal, or are not discharged within 60 days after the
expiration of such stay; or
(18) REMEDIES ON DEFAULT, ETC.
(a) Acceleration.
If any Event of Default has occurred and is continuing, the
Required Holders of the Notes may at any time at its or their option, by
notice or notices to the Company, declare all the Notes at the time
outstanding to be immediately due and payable.
Upon any Notes becoming due and payable under this Section 12.1,
whether automatically or by declaration, such Notes will forthwith
mature and the entire unpaid principal amount of such Notes, plus (x)
all accrued and unpaid interest thereon and the LIBOR Funding Loss
Amount for each Series C Note (in each case to the full extent permitted
by applicable law), shall all be immediately due and payable, in each
and every case without presentment, demand, protest or further notice,
all of which are hereby waived.
(b) Other Remedies.
If any Default or Event of Default has occurred and is continuing,
and irrespective of whether any Notes have become or have been declared
immediately due and payable under Section 12.1, the Holder of any Note
at the time outstanding may proceed to protect and enforce the rights of
such Holder by an action at law, suit in equity or other appropriate
proceeding, whether for the specific performance of any agreement
contained herein or in any Note, or for an injunction against a
violation of any of the terms hereof or thereof, or in aid of the
exercise of any power granted hereby or thereby or by law or otherwise.
(c) Rescission.
At any time after any Notes have been declared due and payable
pursuant to Section 12.1, the Required Holders by written notice to the
Company, may rescind and annul any such declaration and its consequences
if (a) the Company has paid all overdue interest on the Notes, all
principal of any Notes that are due and payable and are unpaid other
than by reason of such declaration, and all interest on such overdue
principal and (to the extent permitted by applicable law) any overdue
interest in respect of the Notes, at the respective default rates
specified in the Notes, (b) all Events of Default and Defaults, other
than non-payment of amounts that have become due solely by reason of
such declaration, have been cured or have been waived pursuant to
Section 17, and (c) no judgment or decree has been entered for the
payment of any monies due pursuant hereto or to the Notes. No
rescission and annulment under this Section 12.3 will extend to or
affect any subsequent Event of Default or Default or impair any right
consequent thereon.
(d) No Waivers or Election of Remedies, Expenses, etc.
No course of dealing and no delay on the part of any Holder of any
Note in exercising any right, power or remedy shall operate as a waiver
thereof or otherwise prejudice such Holder's rights, powers or remedies.
No right, power or remedy conferred by this Agreement or by any Note
upon any Holder thereof shall be exclusive of any other right, power or
remedy referred to herein or therein or now or hereafter available at
law, in equity, by statute or otherwise. Without limiting the
obligations of the Company under Section 15, the Company will pay to the
Holder of each Note on demand such further amount as shall be sufficient
to cover all costs and expenses of such Holder incurred in any
enforcement or collection under this Section 12, including without
limitation reasonable attorneys' fees, expenses and disbursements.
(19) REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.
(a) Registration of Notes.
The Company shall keep at its principal executive office a register
for the registration and registration of transfers of Notes. The name
and address of each Holder of one or more Notes, each transfer thereof
and the name and address of each transferee of one or more Notes shall
be registered in such register. Prior to due presentment for
registration of transfer, the Person in whose name any Note shall be
registered shall be deemed and treated as the owner and Holder thereof
for all purposes hereof, and the Company shall not be affected by any
notice or knowledge to the contrary. The Company shall give to any
Holder of a Note that is an Institutional Investor promptly upon request
therefor, a complete and correct copy of the names and addresses of all
registered Holders of Notes.
(b) Transfer and Exchange of Notes.
Upon surrender of any Note at the principal executive office of the
Company for registration of transfer or exchange (and in the case of a
surrender for registration of transfer, duly endorsed or accompanied by
a written instrument of transfer duly executed by the registered Holder
of such Note or his attorney duly authorized in writing and accompanied
by the address for notices of each transferee of such Note or part
thereof), the Company shall execute and deliver, at the Company's
expense (except as provided below), one or more new Notes (as requested
by the Holder thereof) in exchange therefor, in an aggregate principal
amount equal to the unpaid principal amount of the surrendered Note.
Each such new Note shall be payable to such Person as such Holder may
request. Each such new Note shall be dated and bear interest from the
date to which interest shall have been paid on the surrendered Note or
dated the date of the surrendered Note if no interest shall have been
paid thereon. The Company may require payment of a sum sufficient to
cover any stamp tax or governmental charge imposed in respect of any
such transfer of Notes. Notes shall not be transferred in denominations
of less than $100,000, provided that if necessary to enable the
registration of transfer by a Holder of its entire holding of Notes, one
Note may be in a denomination of less than $100,000.
You agree that the Company shall not be required to register the
transfer of any Note to any Person (other than your nominee) or to any
separate account maintained by you unless the Company receives from the
transferee a representation to the Company (and appropriate information
as to any separate accounts or other matters) to the same or similar
effect with respect to the transferee as is contained in Section 6.2.
You shall not be liable for any damages in connection with any such
representations or assurances provided to the Company by any transferee.
(c) Replacement of Notes.
Upon receipt by the Company of evidence reasonably satisfactory to
it of the ownership of and the loss, theft, destruction or mutilation of
any Note (which evidence shall be, in the case of an Institutional
Investor, notice from such Institutional Investor of such ownership and
such loss, theft, destruction or mutilation), and
(a) in the case of loss, theft or destruction, of indemnity
reasonably satisfactory to it (provided that if the Holder of such
Note is, or is a nominee for, an original Purchaser or any other
Institutional Investor, such Person's own unsecured agreement of
indemnity shall be deemed to be satisfactory), or
(b) in the case of mutilation, upon surrender and
cancellation thereof,
the Company at its own expense shall execute and deliver, in lieu
thereof, a new Note of the same series, dated and bearing interest from
the date to which interest shall have been paid on such lost, stolen,
destroyed or mutilated Note or dated the date of such lost, stolen,
destroyed or mutilated Note if no interest shall have been paid thereon.
(20) PAYMENTS ON NOTES.
(a) Place of Payment.
Subject to Section 14.2, payments of principal, premium, if any,
and interest becoming due and payable on the Notes shall be made in the
State of Texas at the principal office of the Company in such
jurisdiction. The Company may at any time, by notice to each Holder of
a Note, change the place of payment of the Notes so long as such place
of payment shall be either the principal office of the Company in such
jurisdiction or the principal office of a bank or trust company in such
jurisdiction.
(b) Home Office Payment.
So long as you or your nominee shall be the Holder of any Note, and
notwithstanding anything contained in Section 14.1 or in such Note to
the contrary, the Company will pay all sums becoming due on such Note
for principal and interest by the method and at the address specified
for such purpose below your name in Schedule A, or by such other method
or at such other address as you shall have from time to time specified
to the Company in writing for such purpose, without the presentation or
surrender of such Note or the making of any notation thereon, except
that upon written request of the Company made concurrently with or
reasonably promptly after payment or prepayment in full of any Note, you
shall surrender such Note for cancellation, reasonably promptly after
any such request, to the Company at its principal executive office or at
the place of payment most recently designated by the Company pursuant to
Section 14.1. Prior to any sale or other disposition of any Note held
by you or your nominee you will, at your election, either endorse
thereon the amount of principal paid thereon and the last date to which
interest has been paid thereon or surrender such Note to the Company in
exchange for a new Note or Notes pursuant to Section 13.2. The Company
will afford the benefits of this Section 14.2 to any Institutional
Investor that is the direct or indirect transferee of any Note purchased
by you under this Agreement and that has made the same agreement
relating to such Note as you have made in this Section 14.2.
(21) EXPENSES, ETC.
(a) Transaction Expenses.
Whether or not the transactions contemplated hereby are
consummated, the Company will pay all costs and expenses (including
reasonable attorneys and, if reasonably required, local or other
counsel) incurred by you and each Other Purchaser or Holder of a Note in
connection with such transactions and in connection with any amendments,
waivers or consents under or in respect of this Agreement or the Notes
(whether or not such amendment, waiver or consent becomes effective),
including without limitation: (a) the costs and expenses incurred in
enforcing or defending (or determining whether or how to enforce or
defend) any rights under this Agreement or the Notes or in responding to
any subpoena or other legal process or informal investigative demand
issued in connection with this Agreement or the Notes, or by reason of
being a Holder of any Note, and (b) the costs and expenses, including
financial advisors' fees, incurred in connection with the insolvency or
bankruptcy of the Company or any Subsidiary or in connection with any
work-out or restructuring of the transactions contemplated hereby and by
the Notes. The Company will pay, and will save you and each other
Holder of a Note harmless from, all claims in respect of any fees, costs
or expenses if any, of brokers and finders (other than those retained by
you).
(b) LIBOR Funding Losses.
The Company will pay each Holder of a Series C Note, within two
Business Days after demand therefor, such amount (the "LIBOR Funding
Loss Amount") as in the good faith determination by such Holder will
compensate such Holder for any loss or reasonable expense such Holder
may sustain as a consequence of the receipt or recovery for any reason
(including without limitation a prepayment pursuant to Section 8.1 or
acceleration pursuant to Section 12.1) of all or any part of payment on
account of such Series C Note prior to the last day of the applicable
Interest Period therefor, including without limitation any loss or
expense sustained or incurred in liquidating a Swap or any loss of
margin on reemployment of the funds so received or recovered.
(c) Survival.
The obligations of the Company under this Section 15 will survive
the payment or transfer of any Note, the enforcement, amendment or
waiver of any provision of this Agreement or the Notes, and the
termination of this Agreement.
(22) SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.
All representations and warranties contained herein shall survive
the execution and delivery of this Agreement and the Notes, the purchase
or transfer by you of any Note or portion thereof or interest therein
and the payment of any Note, and may be relied upon by any subsequent
Holder of a Note, regardless of any investigation made at any time by or
on behalf of you or any other Holder of a Note. All statements
contained in any certificate or other instrument delivered by or on
behalf of the Company pursuant to this Agreement shall be deemed
representations and warranties of the Company under this Agreement.
Subject to the preceding sentence, this Agreement and the Notes embody
the entire agreement and understanding between you and the Company and
supersede all prior agreements and understandings relating to the
subject matter hereof.
(23) AMENDMENT AND WAIVER.
(a) Requirements.
This Agreement and the Notes may be amended, and the observance of
any term hereof or of the Notes may be waived (either retroactively or
prospectively), with (and only with) the written consent of the Company
and the Required Holders, except that (a) no amendment or waiver of any
of the provisions of Section 1, 2, 3, 4, 5, 6 or 21, or any defined term
(as it is used therein), will be effective as to you unless consented to
by you in writing, and (b) no such amendment or waiver may, without the
written consent of the Holder of each Note at the time outstanding
affected thereby, (i) subject to the provisions of Section 12 relating
to acceleration or rescission, change the amount or time of any
prepayment or payment of principal of, or change the rate or the time of
payment or method of computation of interest on, the Notes, (ii) change
the percentage of the principal amount of the Notes the Holders of which
are required to consent to any such amendment or waiver, or (iii) amend
any of Sections 8, 11(a), 11(b), 12, 17 or 20.
(b) Solicitation of Holders of Notes.
(a) Solicitation. The Company will provide each Holder of the
Notes (irrespective of the amount of Notes then owned by it) with
sufficient information, sufficiently far in advance of the date a
decision is required, to enable such Holder to make an informed and
considered decision with respect to any proposed amendment, waiver
or consent in respect of any of the provisions hereof or of the
Notes. The Company will deliver executed or true and correct
copies of each amendment, waiver or consent effected pursuant to
the provisions of this Section 17 to each Holder of outstanding
Notes promptly following the date on which it is executed and
delivered by, or receives the consent or approval of, the requisite
Holders of Notes.
(b)Payment. The Company will not directly or indirectly pay
or cause to be paid any remuneration, whether by way of
supplemental or additional interest, fee or otherwise, or grant any
security, to any Holder of Notes as consideration for or as an
inducement to the entering into by any Holder of Notes or any
waiver or amendment of any of the terms and provisions hereof
unless such remuneration is concurrently paid, or security is
concurrently granted, on the same terms (or no less favorable terms
taking into account differences in the terms of the Notes), ratably
to each Holder of Notes then outstanding even if such Holder did
not consent to such waiver or amendment.
(c) Binding Effect, etc.
Any amendment or waiver consented to as provided in this Section 17
applies equally to all Holders of Notes and is binding upon them and
upon each future Holder of any Note and upon the Company without regard
to whether such Note has been marked to indicate such amendment or
waiver. No such amendment or waiver will extend to or affect any
obligation, covenant, agreement, Default or Event of Default not
expressly amended or waived or impair any right consequent thereon. No
course of dealing between the Company 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,
the term "this Agreement" and references thereto shall mean this
Agreement as it may from time to time be amended or supplemented.
(d) Notes held by Company, etc.
Solely for the purpose of determining whether the Holders of the
requisite percentage of the aggregate principal amount of Notes then
outstanding approved or consented to any amendment, waiver or consent to
be given under this Agreement or the Notes, or have directed the taking
of any action provided herein or in the Notes to be taken upon the
direction of the Holders of a specified percentage of the aggregate
principal amount of Notes then outstanding, Notes directly or indirectly
owned by the Company or any of its Affiliates shall be deemed not to be
outstanding.
(24) NOTICES.
All notices and communications provided for hereunder shall be in
writing and sent (a) by telecopy if the sender on the same day sends a
confirming copy of such notice by a recognized overnight delivery
service (charges prepaid), or (b) by registered or certified mail with
return receipt requested (postage prepaid), or (c) by a recognized
overnight delivery service (with charges prepaid). Any such notice must
be sent:
if to you or your nominee, to you or it at the address
specified for such communications in Schedule A, or at such other
address as you or it shall have specified to the Company in
writing,
if to any other Holder of any Note, to such Holder at such
address as such other Holder shall have specified to the Company in
writing, or
if to the Company, to the Company at its address set forth
at the beginning hereof to the attention of the Chief Financial
officer, or at such other address as the Company shall have
specified to the Holder Of each Note in writing.
Notices under this Section 18 will be deemed given only when actually
received.
(25) REPRODUCTION OF DOCUMENTS.
This Agreement and all documents relating thereto, including,
without limitation, (a) consents, waivers and modifications that may
hereafter be executed, (b) documents received by you at the Closing
(except the Notes themselves), and (c) financial statements,
certificates and other information previously or hereafter furnished to
you, may be reproduced by you by any photographic, photostatic,
microfilm, microcard, miniature photographic or other similar process
and you may destroy any original document so reproduced. The Company
agrees and stipulates that, to the extent permitted by applicable law,
any such reproduction shall be admissible in evidence as the original
itself in any judicial or administrative proceeding (whether or not the
original is in existence and whether or not such reproduction was made
by you in the regular course of business) and any enlargement, facsimile
or further reproduction of such reproduction shall likewise be
admissible in evidence. This Section 19 shall not prohibit the Company
or any other Holder of Notes from contesting any such reproduction to
the same extent that it could contest the original, or from introducing
evidence to demonstrate the inaccuracy of any such reproduction.
(26) CONFIDENTIAL INFORMATION.
For the purposes of this Section 20, "Confidential Information"
means information delivered to you by or on behalf of the Company or any
Subsidiary in connection with the transactions contemplated by or
otherwise pursuant to this Agreement that is proprietary in nature and
that was clearly marked or labeled or otherwise adequately identified
when received by you as being confidential information of the Company or
such Subsidiary, provided that such term does not include information
that (a) was publicly known or otherwise known to you prior to the time
of such disclosure, (b) subsequently becomes publicly known through no
act or omission by you or any person acting on your behalf, (c)
otherwise becomes known to you other than through disclosure by the
Company or any Subsidiary or (d) constitutes financial statements
delivered to you under Section 7.1 that are otherwise publicly
available. You will maintain the confidentiality of such Confidential
Information in accordance with procedures adopted by you in good faith
to protect confidential information of third parties delivered to you,
provided that you may deliver or disclose Confidential Information to
(i) your directors, officers, trustees, employees, agents, attorneys and
affiliates (to the extent such disclosure reasonably relates to the
administration of the investment represented by your Notes), (ii) your
financial advisors and other professional advisors whose duties require
them to hold confidential the Confidential Information substantially in
accordance with the terms of this Section 20, (iii) any other Holder of
any Note, (iv) any Institutional Investor to which you sell or offer to
sell such Note or any part thereof or any participation therein (if such
Person has agreed in writing prior to its receipt of such Confidential
Information to be bound by the provisions of this Section 20), (v) any
Person from which you offer to purchase any security of the Company (if
such Person has agreed in writing prior to its receipt of such
Confidential Information to be bound by the provisions of this
Section 20), (vi) any federal or state regulatory authority having
jurisdiction over you, (vii) any nationally recognized rating agency
that requires access to information about your investment portfolio or
(viii) any other Person to which such delivery or disclosure may be
necessary or appropriate (w) to effect compliance with any law, rule,
regulation or order applicable to you, (x) in response to any subpoena
or other legal process, (y) in connection with any litigation to which
you are a party or (z) if an Event of Default has occurred and is
continuing, to the extent you may reasonably determine such delivery and
disclosure to be necessary or appropriate in the enforcement or for the
protection of the rights and remedies under your Notes and this
Agreement. Each Holder of a Note, by its acceptance of a Note, will be
deemed to have agreed to be bound by and to be entitled to the benefits
of this Section 20 as though it were a party to this Agreement. On
reasonable request by the Company in connection with the delivery to any
Holder of a Note of information required to be delivered to such Holder
under this Agreement or requested by such Holder (other than a Holder
that is a party to this Agreement or its nominee), such Holder will
enter into an agreement with the Company embodying the provisions of
this Section 20.
(27) SUBSTITUTION OF PURCHASER.
You shall have the right to substitute any one of your non-United
States Affiliates as the purchaser of the Notes that you have agreed to
purchase as record holder on behalf of the Beneficial Owner hereunder,
by written notice to the Company, which notice shall be signed by both
you and such Affiliate, shall contain such Affiliate's agreement to be
bound by this Agreement and shall contain a confirmation by such
Affiliate of the accuracy with respect to it of the representations set
forth in Section 6. Upon receipt of such notice, wherever the word "you"
is used in this Agreement (other than in this Section 21), such word
shall be deemed to refer to such Affiliate in lieu of you. In the event
that such Affiliate is so substituted as a purchaser hereunder and such
Affiliate thereafter transfers to you all of the Notes then held by such
Affiliate, upon receipt by the Company of notice of such transfer,
wherever the word "you" is used in this Agreement (other than in this
Section 21), such word shall no longer be deemed to refer to such
Affiliate, but shall refer to you, and you shall have all the rights of
an original Holder of the Notes under this Agreement.
(28) MISCELLANEOUS.
(a) Successors and Assigns.
All covenants and other agreements contained in this Agreement by
or on behalf of any of the parties hereto bind and inure to the benefit
of their respective successors and assigns (including without limitation
any subsequent Holder of a Note) whether so expressed or not.
(b) Construction.
Each covenant contained herein shall be construed (absent express
provision to the contrary) as being independent of each other covenant
contained herein, so that compliance with any one covenant shall not
(absent such an express contrary provision) be deemed to excuse
compliance with any other covenant. Where any provision herein refers
to action to be taken by any Person, or which such Person is prohibited
from taking, such provision shall be applicable whether such action is
taken directly or indirectly by such Person.
Jurisdiction and Process.
(a) The Company irrevocably submits to the non-exclusive in
personam jurisdiction of any New York State or federal court
sitting in the Borough of Manhattan, The City of New York, over any
suit, action or proceeding arising out of or relating to this
Agreement or the Notes. To the fullest extent permitted by
applicable law, the Company irrevocably waives and agrees not to
assert, by way of motion, as a defense or otherwise, any claim that
it is not subject to the in personam jurisdiction of any such
court, any objection that it may now or hereafter have to the
laying of the venue of any such suit, action or proceeding brought
in any such court and any claim that any such suit, action or
proceeding brought in any such court has been brought in an
inconvenient forum.
(b) The Company agrees, to the fullest extent permitted by
applicable law, that a final judgment in any suit, action or
proceeding of the nature referred to in Section 22.3(a) brought in
any such court shall be conclusive and binding upon the Company
subject to rights of appeal, as the case may be, and may be
enforced in the courts of the United States of America or the State
of New York (or any other courts to the jurisdiction of which the
Company is or may be subject) by a suit upon such judgment.
(c) The Company consents to process being served in any suit,
action or proceeding of the nature referred to in Section 22.3(a)
by mailing a copy thereof by registered or certified mail, postage
prepaid, return receipt requested, to the Company at its address
specified in Section 18 or at such other address of which you shall
then have been notified pursuant to said Section. The Company
agrees that such service upon receipt (i) shall be deemed in every
respect effective service of process upon it in any such suit,
action or proceeding and (ii) shall, to the fullest extent
permitted by applicable law, be taken and held to be valid personal
service upon and personal delivery to the Company. Notices
hereunder shall be conclusively presumed received as evidenced by
a delivery receipt furnished by the United States Postal Service or
any reputable commercial delivery service.
(d) Nothing in this Section 22.3 shall affect the right of
any holder of a Note to serve process in any manner permitted by
law, or limit any right that the holders of any of the Notes may
have to bring proceedings against the Company in the courts of any
appropriate jurisdiction or to enforce in any lawful manner a
judgment obtained in one jurisdiction in any other jurisdiction.
(d) Indemnification.
The Company agrees, to the extent permitted by applicable law, to
indemnify, exonerate, defend and hold you and each of your officers,
directors, trustees, employees and agents (collectively the
"Indemnitees" and individually an "Indemnitee") free and harmless from
and against any and all actions, causes of action, suits, losses,
liabilities and damages, and expenses in connection therewith, including
without limitation reasonable fees and disbursements of a single firm to
act as special counsel for all Indemnitees or, if there shall exist a
legitimate conflict in the interests of the Indemnitees, the reasonable
fees and disbursements of more than one special counsel (collectively
the "Indemnified Liabilities") incurred by the Indemnitees or any of
them as a result of, or arising out of, or relating to, the execution,
delivery, performance or enforcement of this Agreement, the Notes or any
other instrument contemplated hereby by any of the Indemnitees, or any
transaction financed or to be financed in whole or in part directly or
indirectly with proceeds from the sale of any of the Notes, or any
action taken or omitted by an Indemnitee in the capacity of Calculation
Holder (or acting in place of the Calculation Holder as contemplated by
Section 1.1(b)), except as to any Indemnitee for any such Indemnified
Liabilities arising on account of such Indemnitee's gross negligence or
willful misconduct; and if and to the extent the foregoing undertaking
may be unenforceable for any reason, the Company agrees to make the
maximum contribution to the payment and satisfaction of each of the
Indemnified Liabilities which is permissible under applicable law. The
obligations of the Company under this Section shall survive the payment
of the Notes.
(e) Accounting Terms.
All accounting terms used herein which are not expressly defined in
this Agreement have the meanings respectively given to them in
accordance with GAAP. Except as otherwise specifically provided herein,
all computations made pursuant to this Agreement shall be made in
accordance with GAAP and all balance sheets and other financial
statements with respect thereto shall be prepared in accordance with
GAAP. Except as otherwise expressly provided, any consolidated
financial statement or financial computation shall be done in accordance
with GAAP; and, if at the time that any such statement or computation is
required to be made the Company shall not have any Subsidiary, such
terms shall mean a financial statement or a financial computation, as
the case may be, with respect to the Company only.
(f) 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 without including the additional days
elapsed in the computation of the interest payable on such next
succeeding Business Day.
(g) Severability.
Any provision of this Agreement that 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 (to the full extent permitted
by law) not invalidate or render unenforceable such provision in any
other jurisdiction.
(h) Counterparts.
This Agreement may be executed in any number of counterparts, each
of which shall be an original but all of which together shall constitute
one instrument. Each counterpart may consist of a number of copies
hereof, each signed by less than all, but together signed by all, of the
parties hereto.
(i) Governing Law.
THIS AGREEMENT AND THE NOTES SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE
LAWS OF THE STATE OF TEXAS EXCLUDING CHOICE-OF-LAW PRINCIPLES OF THE LAW
OF SUCH STATE THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF A
JURISDICTION OTHER THAN SUCH STATE.
If you are in agreement with the foregoing, please sign the form of
agreement in the space below provided on a counterpart of this Agreement
and return it to the Company, whereupon the foregoing shall become a
binding agreement between you and the Company.
Very truly yours,
SHOWBIZ PIZZA TIME, INC.
By:__________________________
Title:_______________________
The foregoing is hereby agreed to
as of the date thereof.
NEUE BANK AG
By:_______________________
SCHEDULE A
This Schedule A shows the names and addresses of the
Purchasers under the foregoing Note Purchase Agreement and the
other Agreements referred to therein and the respective principal
amounts of the Series C Notes to be purchased by each.
Name and Address of Purchaser Principal Amount of Series C
Notes to be Purchased
----------------------------- -----------------------------
XXXX XXXX XX
Xxxxxxxxxxxx 0
Xxxxxxxx
XX-0000 Xxxxx
$2,500,000
(1) All payments on account of
the Notes shall be made by
crediting in the form of bank
wire transfer of Federal or
other immediately available
funds (identifying each
payment as ShowBiz Pizza
Time, Inc. Floating Rate
Series C Senior Notes due
1997 interest and principal
to:
Swiss Bank Corporation
--------------------------
Zurich
-------------------------- -----------------------------
--------------------------
For credit as follows:
With telephone advice of
payment to:
(2) All notices and
communications to be
addressed to:
Neue Bank AG
---------------------
att. X. Xxxxxxxxxxx
---------------------
Address see above
---------------------
Tel. (000) 000 00 00
---------------------
Fax (000) 000 00 00
---------------------
(3) Notices with respect to
payments and corporate
actions to be addressed as
provided in clause (2)
above:
(4) Tax Identification Number:
N.A.
SCHEDULE B
DEFINED TERMS
-------------
As used herein, the following terms have the respective meanings set
forth below or set forth in the Section hereof following such term:
"Affiliate" means, at any time, and with respect to any
Person, (a) any other Person that at such time directly or
indirectly through one or more intermediaries Controls, or is
Controlled by, or is under common Control with, such first Person,
and (b) any Person beneficially owning or holding, directly or
indirectly, 10% or more of any class of voting or equity interests
of the Company or any Subsidiary or any corporation of which the
Company and its Subsidiaries beneficially own or hold, in the
aggregate, directly or indirectly, 10% or more of any class of
voting or equity interests. As used in this definition, "Control"
means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by
contract or otherwise. Unless the context otherwise clearly
requires, any reference to an "Affiliate" is a reference to an
Affiliate of the Company.
"Beneficial Owner" means the beneficial owner of the Notes
purchased hereunder.
"Business Day" means any day other than a Saturday, a Sunday
or a day on which commercial banks in London, England, Dallas,
Texas, Cayman Islands, Geneva, Switzerland, or Liechtenstein are
required or authorized to be closed.
"Capital Lease" means, at any time, a lease with respect to
which the lessee is required concurrently to recognize the
acquisition of an asset and the incurrence of a liability in
accordance with GAAP.
"Capitalized Lease Obligations" means with respect to any
Person, all outstanding obligations of such Person in respect of
Capital Leases, taken at the capitalized amount thereof accounted
for as indebtedness in accordance with GAAP.
"Change of Control" means (a) the acquisition through purchase
or otherwise (including the agreement to act in concert without
more), by any Person or "group" (within the meaning of Section
13(d) or 14(d) of the Exchange Act) directly or indirectly, in one
or more transactions, of the beneficial ownership or control of
securities representing more than 25% of the combined voting power
of the Company's Voting Stock or (b) the acquisition by any Person,
entity or "group" (within the meaning of Section 13(d) or 14(d) of
the Exchange Act), of the power (whether or not exercised) to elect
a majority of the Board of Directors of the Company. For purposes
of this definition "beneficial ownership" shall have the meaning
set forth in Rule 13d-3 of the Securities and Exchange Commission
adopted pursuant to the Exchange Act.
"Closing" is defined in Section 3.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time, and the rules and regulations promulgated
thereunder from time to time.
"Company" means ShowBiz Pizza Time, Inc., a Kansas
corporation.
"Confidential Information" is defined in Section 20.
"Consolidated Capitalization" means, at any date, the sum of
(a) Consolidated Indebtedness plus (b) Consolidated Net Worth plus
(c) deferred tax liabilities (if any), all as determined on a
consolidated basis for the Company and its Subsidiaries in
accordance with GAAP.
"Consolidated Indebtedness" means, at any date, all
Indebtedness of the Company and its Subsidiaries determined on a
consolidated basis in accordance with GAAP.
"Consolidated Interest Expense" for any period means the sum
for the Company and its Subsidiaries, determined on a consolidated
basis in accordance with GAAP, of all amounts which would be
deducted in computing Consolidated Net Income on account of
interest on Indebtedness (including imputed interest in respect of
Capitalized Lease Obligations and amortization of debt discount and
expense).
"Consolidated Net Income" for any period means the net income
of the Company and its Subsidiaries for such period, determined on
a consolidated basis in accordance with GAAP, excluding
(a) the proceeds of any life insurance policy,
(b) any gains arising from (i) the sale or other
disposition of any assets (other than current assets) to the
extent that the aggregate amount of the gains during such
period exceeds the aggregate amount of the losses during such
period from the sale, abandonment or other disposition of
assets (other than current assets), (ii) any write-up of
assets or (iii) the acquisition of outstanding securities of
the Company or any Subsidiary,
(c) any amount representing any interest in the
undistributed earnings of any other Person (other than a
Subsidiary),
(d) any earnings, prior to the date of acquisition, of
any Person acquired in any manner, and any earnings of any
Subsidiary acquired prior to its becoming a Subsidiary,
(e) any earnings of a successor to or transferee of the
assets of the Company prior to its becoming such successor or
transferee,
(f) any deferred credit (or amortization of a deferred
charge or credit) arising from the acquisition of any Person,
and
(g) any extraordinary gains not covered by clause (b)
above.
"Consolidated Net Worth" means, at any date, on a consolidated
basis for the Company and its Subsidiaries, (a) the sum of (i)
capital stock taken at par or stated value plus (ii) capital in
excess of par or stated value relating to capital stock plus (iii)
retained earnings (or minus any retained earning deficit) minus (b)
the sum of treasury stock, capital stock subscribed for and
unissued, deferred compensation and other contra-equity accounts,
all determined in accordance with GAAP.
"Consolidated Operating Lease Rentals" for any period means
the sum of the rental and other obligations required to be paid by
the Company and its Subsidiaries as lessee under all leases of real
or personal property (other than Capital Leases), excluding any
amounts required to be paid by the lessee (whether or not therein
designated as rental or additional rental) on account of
maintenance and repairs, insurance, taxes, assessments, water rates
and similar charges, all determined on a consolidated basis in
accordance with GAAP.
"Default" means an event or condition the occurrence or
existence of which would, with the lapse of time or the giving of
notice or both, become an Event of Default.
"EBITDA" for any period means Consolidated Net Income plus all
amounts deducted in the computation thereof on account of (a)
Consolidated Interest Expense, (b) depreciation and amortization
expenses (including amortization of deferred compensation) and
other non-cash charges, (c) income and profits taxes and (d)
extraordinary losses (if any) of the type described in clauses (b)
through (g) of the definition of "Consolidated Net Income" that are
deducted in determining Consolidated Net Income for such period.
"Environmental Laws" means any and all Federal, state, local,
and foreign statutes, laws, regulations, ordinances, rules,
judgments, orders, decrees, permits, concessions, grants,
franchises, licenses, agreements or governmental restrictions
relating to pollution and the protection of the environment or the
release of any materials into the environment, including but not
limited to those related to hazardous substances or wastes, air
emissions and discharges to waste or public systems.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the rules and regulations
promulgated thereunder from time to time in effect.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that is treated as a single employer together with
the Company under section 414 of the Code.
"Event of Default" is defined in Section 11.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time.
"GAAP" means generally accepted accounting principles as in
effect from time to time in the United States of America.
"Governmental Authority" means
(a) the government of
(i) the United States of America or any State or
other political subdivision thereof, or
(ii) any jurisdiction in which the Company or any
Subsidiary conducts all or any part of its business, or
which asserts jurisdiction over any properties of the
Company or any Subsidiary, or
(b) any entity exercising executive, legislative,
judicial, regulatory or administrative functions of, or
pertaining to, any such government.
"Guaranty" means, with respect to any Person, any obligation
(except the endorsement in the ordinary course of business of
negotiable instruments for deposit or collection) of such Person
guaranteeing or in effect guaranteeing any Indebtedness, dividend
or other obligation of any other Person in any manner, whether
directly or indirectly, including without limitation obligations
incurred through an agreement, contingent or otherwise, by such
Person:
(a) to purchase such Indebtedness or obligation or any
property constituting security therefor;
(b) to advance or supply funds (i) for the purchase or
payment of such indebtedness or obligation, or (ii) to
maintain any working capital or other balance sheet condition
or any income statement condition of any other Person or
otherwise to advance or make available funds for the purchase
or payment of such Indebtedness or obligation;
(c) to lease properties or to purchase properties or
services primarily for the purpose of assuring the owner of
such Indebtedness or obligation of the ability of any other
Person to make payment of the indebtedness or obligation; or
(d) otherwise to assure the owner of such Indebtedness
or obligation against loss in respect thereof.
In any computation of the Indebtedness or other liabilities of the
obligor under any Guaranty, the Indebtedness or other obligations
that are the subject of such Guaranty shall be assumed to be direct
obligations of such obligor.
"Hazardous Material" means any and all pollutants, toxic or
hazardous wastes or any other substances that might pose a hazard
to health or safety, the removal of which may be required or the
generation, manufacture, refining, production, processing,
treatment, storage, handling, transportation, transfer, use,
disposal, release, discharge, spillage, seepage, or filtration of
which is or shall be restricted, prohibited or penalized by any
applicable law (including without limitation asbestos, urea
formaldehyde foam insulation and polycholorinated biphenyls).
"Holder" means, with respect to any Note, the Person in whose
name such Note is registered in the register maintained by the
Company pursuant to Section 13.1.
"Indebtedness" with respect to any Person means, at any time,
without duplication,
(a) its liabilities for borrowed money,
(b) its liabilities for the deferred purchase price of
property acquired by such Person (excluding accounts payable
arising in the ordinary course of business and not overdue but
including all liabilities created or arising under any
conditional sale or other title retention agreement with
respect to any such property),
(c) its Capitalized Lease Obligations,
(d) all liabilities for borrowed money secured by any
Lien with respect to any property owned by such Person
(whether or not it has assumed or otherwise become liable for
such liabilities),
(e) all its liabilities in respect of letters of credit
or instruments serving a similar function issued or accepted
for its account by banks and other financial institutions
(whether or not representing obligations for borrowed money),
(f) Swaps of such Person, and
(g) any Guaranty of Such Person with respect to
liabilities of a type described in any of clauses (a) through
(f) above.
Indebtedness of any Person shall include all obligations of such
Person of the character described in clauses (a) through (g) above
to the extent such Person remains legally liable in respect thereof
notwithstanding that any such obligation is deemed to be
extinguished under GAAP. Indebtedness shall not include any
obligations under operating lease agreements.
"Institutional Investor" means (a) any original purchaser of
a Note, (b) any holder of a Note holding more than 1% of the
aggregate principal amount of the Notes then outstanding, and (c)
any bank, trust company, savings and loan association or other
financial institution, any pension plan, any investment company,
any insurance company, any broker or dealer, or any other similar
financial institution or entity, regardless of legal form.
"Interest Payment Date" means each March 31, June 30,
September 30 and December 31.
"Interest Period" is defined in Section 1.1(c).
"LIBOR Funding Loss Amount" is defined in Section 15.2.
"LIBOR Rate" is defined in Section 1.1(c).
"Lien" means, with respect to any Person, any mortgage, lien,
pledge, charge, security interest or other encumbrance, or any
interest or title of any vendor, lessor, lender or other secured
party to or of such Person under any conditional sale or other
title retention agreement or Capital Lease, upon or with respect to
any property or asset of such Person (including in the case of
stock, stockholder agreements, voting trust agreements and all
similar arrangements).
"Material" means material in relation to the business,
operations, affairs, financial condition, profits, assets,
properties or prospects of the Company and its Subsidiaries taken
as a whole.
"Material Adverse Effect" means a material adverse effect on
(a) the business, operations, affairs, financial condition,
profits, assets, properties or prospects of the Company and its
Subsidiaries taken as a whole, (b) the ability of the Company to
perform its obligations under this Agreement and the Notes or (c)
the validity or enforceability of this Agreement or the Notes.
"Multiemployer Plan" means any Plan that is a "multiemployer
plan" (as such term is defined in section 4001(a)(3) of ERISA).
"Notes" is defined in Section 1.1.
"Officer's Certificate" means a certificate of a Senior
Financial Officer or of any other officer of the Company whose
responsibilities extend to the subject matter of such certificate.
"Other Agreements" is defined in Section 2.
"Other Purchasers" is defined in Section 2.
"PBGC" means the Pension Benefit Guaranty Corporation referred
to and defined in ERISA or any successor thereto.
"Paying Agent" shall be a bank, trust company, or other
financial institution, at which this Note may be surrendered for
payment. At its option, the Company may act as its own Paying
Agent.
"Person" means an individual, partnership, corporation,
limited liability company, association, trust, unincorporated
organization, or a government or agency or political subdivision
thereof.
"Plan" means an "employee benefit plan" (as defined in section
3(3) of ERISA) that is or, within the preceding five years, has
been established or maintained, or to which contributions are or,
within the preceding five years, have been made or required to be
made, by the Company or any ERISA Affiliate or with respect to
which the Company or any ERISA Affiliate may have any liability.
"Property" or "properties" means, unless otherwise
specifically limited, real or personal property of any kind,
tangible or intangible, xxxxxx or inchoate.
"QPAM Exemption" means Prohibited Transaction Class Exemption
84-14 issued on March 13, 1984 by the United States Department of
Labor.
"Redemption Date" means the date fixed for redemption of any
principal amount of the Notes, pursuant to the terms of this
Agreement and the Notes.
"Redemption Price" means, with respect to any purchase,
redemption, or prepayment of all or any part of the Notes, the
price fixed for redemption in accordance with the terms of the
Notes.
"Required Holders" means, at any time, the holders of at least
a majority in unpaid principal amount of the Notes at the time
outstanding.
"Reset Date" is defined in Section 1.2(c).
"Responsible Officer" means any Senior Financial Officer and
any other officer of the Company with responsibility for the
administration of the relevant portion of this Agreement.
"Securities Act" means the Securities Act of 1933, as amended
from time to time.
"Senior Financial Officer" means the chief financial officer,
principal accounting officer, treasurer or comptroller of the
Company.
"Series C Notes" is defined in Section 1.1.
"Subsidiary" means, as to any Person, any corporation or other
business entity a majority of the combined voting power of all
Voting Stock of which is owned by such Person or one or more of its
Subsidiaries or such Person and one or more of its Subsidiaries.
Unless the context otherwise clearly requires, any reference to a
"Subsidiary" is a reference to a Subsidiary of the Company.
"Swaps" means, with respect to any Person, payment obligations
with respect to interest rate swaps, currency swaps and similar
obligations obligating such Person to make payments, whether
periodically or upon the happening of a contingency. For the
purposes of this Agreement, the amount of the obligation under any
Swap shall be the amount determined in respect thereof as of the
end of the then most recently ended fiscal quarter of such Person,
based on the assumption that such Swap had terminated at the end of
such fiscal quarter, and in making such determination, if any
agreement relating to such Swap provides for the netting of amounts
payable by and to such Person thereunder or if any such agreement
provides for the simultaneous payment of amounts by and to such
Person, then in each such case, the amount of such obligation shall
be the net amount so determined.
"U.S. Legal Tender" means United States dollars or such coin
or currency of the United States of America as at the time of
payment shall be legal tender for the payment of public and private
debts in the United States of America.
"Voting Stock" means, with respect to any Person, any shares
of stock or other equity interests of any class or classes of such
Person whose holders are entitled under ordinary circumstances
(irrespective of whether at the time stock or other equity
interests of any other class or classes shall have or might have
voting power by reason of the happening of any contingency) to vote
for the election of a majority of the directors, managers, trustees
or other governing body of such Person.
"Wholly-Owned Subsidiary" means, at any time, any Subsidiary
all of the equity interests (except directors' qualifying shares)
and voting interests of which are owned by any one or more of the
Company and the Company's other Wholly-Owned Subsidiaries at such
time.
EXHIBIT 1.1(a)
[FORM OF SERIES C NOTE]
SHOWBIZ PIZZA TIME, INC.
FLOATING RATE SERIES C SENIOR NOTE DUE 1997
No. [___________] [__________]
$ [___________] [Date]
PPN [___________]
BENEFICIAL OWNERSHIP OF THIS NOTE MAY ONLY BE TRANSFERRED TO A
PERSON WHO IS NOT A RESIDENT OR CITIZEN OF THE UNITED STATES OF
AMERICA, OR TO A BANK, OR OTHER INSTITUTION OR ENTITY WHICH IS NOT
INCORPORATED OR ORGANIZED UNDER THE LAWS OF THE UNITED STATES OF
AMERICA OR ANY STATE THEREOF. THIS NOTE WAS OFFERED FOR SALE IN
CONNECTION WITH ITS ORIGINAL ISSUANCE ONLY OUTSIDE THE UNITED
STATES AND HAS BEEN DELIVERED TO THE HOLDER OUTSIDE THE UNITED
STATES.
FOR VALUE RECEIVED, the undersigned, SHOWBIZ PIZZA TIME, INC.
(the "Company"), a Kansas corporation, hereby promises to pay to
[_____________________], or registered assigns, the principal
amount of [____________________________________________] DOLLARS on
July 31, 1997, with interest (computed on the basis of actual days
elapsed and a year of 360 days) (a) from the date hereof on the
unpaid balance thereof, payable quarterly on each Interest Payment
Date (as below defined), at a rate per annum for each Interest
Period (as defined in the Note Purchase Agreements referred to
below) equal to 3.5% plus the LIBOR Rate (as so defined) as
determined in respect of such Interest Period pursuant to said Note
Purchase Agreements, until the principal hereof shall have become
due and payable, and (b) on any overdue payment of principal or (to
the extent permitted by applicable law) interest, payable quarterly
as aforesaid (or, at the option of the registered holder hereof, on
demand) at a rate per annum from time to time equal to 2% above the
interest rate then applicable to this Note, from the date of such
default to and including the last day of the Interest Period during
which such default occurs and thereafter at a rate per annum equal
to 5.5% above said LIBOR Rate (as so determined from time to time
on the basis of three-month Interest Periods).
[The LIBOR Rate for the [six]-month Interest Period commencing
on the date of this Note is ____%.]
As used herein the term "Interest Payment Date" means each
March 31, June 30, September 30 and December 31, beginning
December 31, 1995.
Payments of principal of, interest on and any premium with
respect to this Note are to be made in lawful money of the United
States of America at the principal office of [__________] in
[__________] or at such other place outside the United States as
the Company shall have designated by written notice to the holder
of this Note as provided in the Note Purchase Agreements referred
to below.
This Note is one of a series of Senior Notes issued pursuant
to separate Note Purchase Agreements dated as of _______ __, 1995
(as from time to time amended, the "Note Purchase Agreements")
between the Company and the respective Purchasers named therein and
is entitled to the benefits thereof. Each holder of this Note will
be deemed, by its acceptance hereof, to have agreed to the
confidentiality provisions set forth in Section 20 of the Note
Purchase Agreements.
Pursuant to the Note Purchase Agreements the Company is
required to give written notice to the holder of this Note of the
duration of each Interest Period for this Note, and of the
applicable interest rate for such Interest Period as determined on
the Reset Date (as defined in the Note Purchase Agreement) for such
Interest Period. The applicable LIBOR Rate and interest rate and
duration of such Interest Period for this Note shall be endorsed by
the holder of this Note on the schedule attached hereto or any
continuation thereof prior to any transfer of this Note.
This Note is a registered Note and, as provided in the Note
Purchase Agreements, 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 a like
principal amount will be issued to, and registered in the name of,
the transferee, provided that record ownership may only be
transferred to a bank or other entity which meets the requirements
of Section 6.5 of the Note Purchase Agreement. Prior to due
presentment for registration of transfer, the Company 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 Company will not be affected by any notice to the contrary.
This Note may be redeemed at the option of the Company, at any
time in whole or from time to time in part, for an amount equal to
the then unpaid principal amount of this Note, plus accrued and
unpaid interest (if any) to the date of redemption (subject to the
rights of holders of record on the relevant record date to receive
interest due on the relevant interest payment date). Notice of
redemption will be mailed at least 30 days but not more than 60
days before the redemption date to the holder of this Note at such
holder's registered address. Except as set forth in the Note
Purchase Agreements, from and after any redemption date, if monies
for the redemption shall have been deposited with the Paying Agent
for redemption on such redemption date, then, unless the Company
defaults in the payment of such redemption price, principal amount
called for redemption will cease to bear interest and the only
right of the holders as to such principal amount will be to receive
payment of the redemption price.
The Company is also required under circumstances described in
the Note Purchase Agreements to offer to prepay all Notes on the
terms specified in the Note Purchase Agreements.
If an Event of Default, as defined in the Note Purchase
Agreements, occurs and is continuing, the principal of this Note
may be declared or otherwise become due and payable in the manner,
at the price and with the effect provided in the Note Purchase
Agreements.
This Note shall be construed and enforced in accordance with,
and the rights of the Company and the holder hereof shall be
governed by, the laws of the State of [Texas], excluding
choice-of-law principles of such law.
SHOWBIZ PIZZA TIME, INC.
By_________________________
Title:
Schedule of Interest Rate and Duration of Interest Period
----------------------------------------------------------
Interest Rate
Duration of LIBOR Rate
Reset Date Interest Period LIBOR Rate plus 3.5%
EXHIBIT 1.6
CERTIFICATE IN LIEU OF FORM W-8
[Please print or type]
Name:___________________________________________________
Address:________________________________________________
Type of Entity (Please check appropriate box):
_ Non-U.S. Bank _ Foreign branch of a U.S. Bank
_ Other (please describe)_____________________________________
(I) The undersigned is a record holder of the Floating Rate Series
C Senior Notes due 1997 (the "Notes") issued by ShowBiz Pizza
Time, Inc., a Kansas corporation (the "Company").
(ii) The outstanding principal amount of the Notes of which the
undersigned is record holder is: U.S. $
(iii The beneficial owners of the Notes are foreign (non-U.S.)
persons and have not been U.S. persons on any Interest Payment
Date (as that term is defined in the Note Purchase Agreement
dated October _____, 1995).
(iv) During all periods that the undersigned is a record holder of
the Notes, the beneficial owners of the Notes will not be U.S.
persons on any Interest Payment Date.
(v) The undersigned will provide a U.S. beneficial ownership
notification to the Company in the event this certification is
or becomes untrue.
(vi) This certification is signed on this _____ day of
_____________, 1995.
Under penalties of perjury, the undersigned certifies that all of
the forgoing is true and correct in every respect.
Name of Record Holder: _______________________
Signature: ________________________
Printed Name of Person signing:_______________________
Title of Person Signing: ________________________
EXHIBIT 4.4(a)
October 10, 1995
Re: ShowBiz Pizza Time, Inc.; Floating Rate Series C
Senior Notes due 1997.
To the several Purchases listed in
Schedule A to Note purchase Agreement and
the Benficial Owners
Ladies and Gentlemen:
I have acted as in-house counsel to ShowBiz Pizza Time, Inc.,
a Kansas Corporation (the "Company"), in connection with the the
issuance by the Company of its Floating Rate Series C Senior Notes
due 1997 in an aggregate principal amount of $5,000,000 (the
"Notes") and purchase by you pursuant to the several Note Purchase
Agreement made by you to the Company under the date of October 10,
1995 (the "Note Purchase Agreement") of Notes in the respective
aggregate principal amounts and series specified in Schedule A to
the Note Purchase Agreement. All capitalized terms used herein
without definition shall have the meanings ascribed thereto in the
Note Purchase Agreement.
In my capacity as in-house counsel to the Company and its
subsidiaries, I have participated in the preparation of the
Agreement and the exhibits and other documents referred to therein.
I have examined such corporate documents and records of the Company
and its subsidiaries, certificates of public officials and other
certificates, opinions and instruments and have made such other
investigations as I have deemed necessary or advisable as a basis
for the opinions hereinafter expressed.
In my examination I have assumed the authenticity of all
documents submitted to me as originals, the conformity to original
documents of all documents submitted to me as certified or
photostatic copies and the authenticity of the originals of such
latter documents. In addition, I have assumed the genuineness of
all signatures except signatures of representatives of the Company,
the due authorization, execution and delivery of all documents
referred to herein by parties thereto other than the Company and
the due authority of all persons executing such documents except
persons executing such documents on behalf of the Company.
Based upon the foregoing and having regard for the legal
consideration that I deem relevant, I render my opinion to you
pursuant to Section 4.4(a) of the Note Purchase Agreement as
follows:
1. The Company is a corporation duly organized and validly
existing under the laws of the State of Kansas and has all
requisite power and authority to own or hold under lease the
property its purports to own or hold under lease, to carry on its
business as now being conducted.
Letter to Beneficial Owners
October 10, 1995
Page 2 of 3
2. The Company has duly qualified and is authorized to do
business in each jurisdiction where such qualification and
authorization in necessary, except where the failure to be so
qualified and authorized, individually or in the aggregate, could
not have a Material Adverse Effect.
3. The Company has the corporate power and authority to
execute and deliver the Note Purchase Agreement and the Notes and
to perform the provisions thereof. The Note Purchase Agreement
have been duly authorized, executed and delivered by the Company
and constitutes a legal, valid and binding obligation of the
Company and is enforceable against the Company in accordance with
their respective terms.
4. The Notes have been duly authorized, executed and
delivered by the Company and constitutes a legal, valid and binding
obligation of the Company and is enforceable against the Company in
accordance with their respective terms.
5. The execution and delivery by the Company of the Note
Purchase Agreement and the performance by the Company of the
transactions to be consummated by the Company described therein
including the issuance of the Note do not conflict with or
constitute on the part of the Company a breach or a violation of
any of the terms and provisions of, or constitute (with due notice
or lapse of time or both) a default under the Articles of the
Company or Bylaws of the Company or of any indenture, agreement,
order, writ, judgment or decree known to me to which the Company is
a party or by which it or any of its properties are bound.
6. To the best of my knowledge there is no action, suit,
proceeding, inquiry or investigation at law or in equity by or
before any court or any Government Authority or public board or
body pending or threatened against or affecting the Company or any
subsidiary or any of its properties wherein an unfavorable
decision, ruling or finding (a) would adversely affect the validity
or enforceability of the Note Purchase Agreement or the Notes, (b)
might result in any materially adverse change in the operations,
properties, assets, liabilities or financial condition of the
Company, or (c) would otherwise adversely affect the capability of
the Company to comply with its obligations under the Note Purchase
Agreement.
7. Each Subsidiary is a corporation or other legal entity
duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation or organization.
Each Subsidiary has all requisite power and authority to own or
hold under lease the property it purports to own or hold under
lease and to transact the business it transacts.
Letter to Beneficial Owners
October 10, 1995
Page 3 of 3
8. Each Subsidiary has duly qualified and is authorized to
do business in each jurisdiction where such qualification and
authorization in necessary, except where the failure to be so
qualified and authorized, individually or in the aggregate, could
not have a Material Adverse Effect.
My opinion expressed in paragraph 4 above is qualified to the
extent that (a) the enforceability of the Note Purchase Agreement
and the Notes may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws of general application
from time to time affecting the rights of creditors, landlords,
and secured parties generally and providing for relief of debtors,
(b) a particular court may refuse to grant certain equitable
remedies, including, without limiting the generality of the
foregoing, specific performance, with respect to the enforcement of
any provisions of the Note Purchase Agreement or the Notes, (c)
certain provisions of the Note Purchase Agreement are or may be
unenforceable in whole or in part under the laws of the State of
Texas, but the inclusion of such provisions does not affect the
validity of the Note Purchase Agreement, and the Note Purchase
Agreement contains adequate provisions for enforcing payment of the
obligations thereunder (including payment of the Notes) and for the
practical realization of the rights and benefits afforded thereby,
and (d) the enforceability of the indemnity provisions contained in
the Note Purchase Agreement may be limited by federal securities
laws and is subject to the qualification that a state court, in
determining whether any party to an agreement is entitled to
indemnification under the terms of the agreement, will limit any
such indemnification arising from such party's sole or contributory
negligence to the express terms and conditions as set forth in the
agreement.
My opinion is limited solely to the laws of the State of Texas
and the Kansas General Corporation Code, and the laws of the United
States of America in effect on the date hereof, and no opinion is
expressed herein as to any matters governed by the laws of any
other jurisdictions.
This opinion is furnished to you solely in connection with the
transactions being consummated today pursuant to the Note Purchase
Agreement and may not be relied upon or described or quoted from by
any other person, firm or entity without, in each instance, my
prior written consent.
Very truly yours,
Xxxxxxxx X. Xxxxx, Xx.
Counsel
EXHIBIT 4.4(a)
October 10, 1995
Re: ShowBiz Pizza Time, Inc.
Floating Rate Series C Senior Notes due 1997
To the several Purchasers listed in
Schedule A to the within-mentioned
Note Purchase Agreement and
the Beneficial Owner
Ladies and Gentlemen:
We have acted as special counsel to ShowBiz Pizza Time, Inc. (the
"Company") in connection with the issuance by the Company of its
Floating Rate Series C Senior Notes due 1997 in an aggregate
principal amount of $5,000,000 (the "Series C Notes" or the
"Notes") and the purchases by you pursuant to the Note Purchase
Agreement made by Purchaser with the Company under date of
October 10, 1995 (the "Note Purchase Agreement") of Notes in the
respective aggregate principal amounts specified in Schedule A to
the Note Purchase Agreement. All capitalized terms used herein
without definition shall have the meanings ascribed thereto in the
Note Purchase Agreement.
We have examined such corporate records of the Company and its
Subsidiaries, agreements and other instruments, certificates of
officers and representatives of the Company and its Subsidiaries,
certificates of public officials, and such other documents, as we
have deemed necessary in connection with the opinions hereinafter
expressed. In such examination we have assumed the genuineness of
all signatures, the authenticity of documents submitted to us as
originals and the conformity with the authentic originals of all
documents submitted to us as copies. As to questions of fact
material to such opinions we have, when relevant facts were not
independently established, relied upon the representations set
forth in the Note Purchase Agreement and upon certifications by
officers or other representatives of the Company and its
Subsidiaries.
Based upon the foregoing and having regard for legal
considerations that we deem relevant, we render our opinion to you
pursuant to Section 4.4 of the Note Purchase Agreement as follows:
1. The Company is a corporation duly organized and validly
existing under the laws of the State of Kansas and has all
requisite power to execute and deliver the Note Purchase Agreement
and the Notes and to perform its obligations thereunder.
2. The Note Purchase Agreement has been duly authorized, executed
and delivered by the Company and constitute legal, valid and
binding agreements of the Company, enforceable against the Company
in accordance with their terms. The Company is duly qualified and
is authorized to do business in each jurisdiction where such
qualification and authorization is necessary, except where the
failure to be so qualified could not have a Material Adverse
Effect.
3. The Notes being purchased by you today have been duly
authorized, executed and delivered by the Company and constitute
legal, valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms.
4. No consent, approval or authorization of, or declaration,
registration or filing with, any Kansas, Texas or Federal
Governmental Authority is required to be obtained or made as a
condition to the validity of the execution and delivery by the
Company of the Note Purchase Agreement or the Notes.
5. It was not necessary in connection with the offering, sale and
delivery of the Notes, under the circumstances contemplated by the
Note Purchase Agreement, to register the Notes under the Securities
Act of 1933, or the Texas Securities Act or to qualify an
indenture in respect of the Notes under the Trust Indenture Act of
1939, as amended or to register the Notes under the Securities
Exchange Act of 1934.
6. Each Subsidiary listed in Schedule 5.4 to the Note Purchase
Agreement is a corporation or other entity duly organized, validly
existing and in good standing under the laws of the jurisdiction of
its incorporation or organization and is duly qualified as a
foreign corporation or other legal entity and is in good standing
in each jurisdiction in which such qualification is required by
law, except where the failure to be so qualified, individually or
in the aggregate, could not have a Material Adverse Effect.
7. Neither the Company nor any Subsidiary is subject to
regulation under the Investment Company Act of 1940, as amended,
the Public Utility Holding Company Act of 1935, as amended, or the
Federal Power Act, as amended.
8. None of the transactions contemplated by the Note Purchase
Agreement (including without limitation the use of the proceeds
from the sale of the Notes) will violate or result in a violation
of Section 7 of the Exchange Act, or any regulations issued
pursuant thereto, including without limitation Regulations G, T, U
and X of the Board of Governors of the Federal Reserve System (12
CFR, Part 207, Part 220 and Part 224, respectively).
9. There are no actions, suits or proceedings pending, or to our
knowledge threatened, against or affecting the Company or any
Subsidiary or any property of the Company or any Subsidiary in any
court or before any arbitrator of any kind or before or by any
Governmental Authority, except actions, suits or proceedings which
(a) individually do not in any manner draw into question the
validity of the Note Purchase Agreement or the Notes and (b) in the
aggregate could not reasonably be expected to have a Material
Adverse Effect.
10. Assuming the accuracy of the representations and
warranties, and compliance with the covenants made by or on behalf
of the Purchaser and the Beneficial Owner under the Note Purchase
Agreement and the Notes, (i) each of the Notes meets the
requirements of Section 871(h)(2)(B) or 881(c)(2)(B) of the
Internal Revenue Code of 1986, as amended (the "Code"), (ii) in the
case of Notes beneficially owned by a nonresident alien individual,
interest paid on the Notes will constitute "portfolio interest" as
such term is defined in Section 871(h)(2) of the Code, and (iii) in
the case of Notes beneficially owned by a foreign corporation,
interest paid on the Notes will constitute "portfolio interest" as
such term is defined in Section 881(c)(2) of the Code.
The opinions expressed above as to the enforceability of any
agreement or instrument in accordance with its terms are subject to
the exceptions that (a) such enforceability may be limited by (i)
applicable bankruptcy, insolvency, reorganization, moratorium and
similar laws affecting the enforcement of creditors' rights
generally and (ii) general equitable principles (regardless of
whether such enforceability is considered in a proceeding in equity
or at law), (b) the enforceability of indemnity provisions
contained in the Note Purchase Agreement may be subject to
limitations based upon public policy considerations.
We express no opinion as to Section 22.3 of the Note Purchase
Agreement insofar as said Section relates to (a) the subject matter
jurisdiction of any New York State or federal court sitting in the
Bourough of Manhattan, the City of New York, to adjudicate any
controversy relating to the Note Purchase Agreement, the Notes or
any other document related thereto, or (b) the waiver of
inconvenient forum with respect to proceedings in such court.
Our opinions are limited in all respects to the substantive law
of the State of Texas and the Kansas General Corporation Code, and
the federal law of the United States, and we assume no
responsibility as to the applicability thereto, or the effect
thereon, of the laws of any other jurisdiction.
This opinion is given solely for your benefit, in connection with
the closing held today of the transactions contemplated by the Note
Purchase Agreement, and may not be relied upon by any other person
for any purpose without our prior written consent.
Very truly yours,
XXXXXXXX XXXXXXXX & XXXXXX P.C.
By:________________________________
Xxxxxx X. Xxxx
SCHEDULE 5.3
Disclosure Documents
Form 10K - Annual Report for Fiscal year ended December 30, 1994.
Form 10Q - Quarterly Report for quarterly period ended March 31,
1995.
Form 8K - Current Report for May 5, 1995.
Proxy Statement - Notice of Annual Meeting of Shareholders to be
held June 8, 1995.
Proxy Supplement - Supplemental Information of Annual Meeting of
Shareholders to be held on June 8, 1995.
Form 10Q - Quarterly Report for quarterly period ended June 30,
1995.
SCHEDULE 5.4
Subsidiaries
-------------
BHC Acquisition Corporation
State of Incorporation: Texas
Shares/Equity Owned by Company: 100%
Directors:
Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxx
Officers:
Xxxxxxx X. Xxxxx CEO, President, COO
Xxxxx Xxxxxxx Vice President, Secretary
Xxxxxxx X. Xxxxxxxx Vice President, Controller,
Treasurer
Xxxx Xxxxxxx Assistant Treasurer
Xxxxxxx X. Xxxxxx Vice President
Xxxx Xxxxx Vice President
ShowBiz of Laurel, Inc.
State of Incorporation: Maryland
Shares/Equity Owned by Company: 73%
Directors:
Xxxxxx X. Xxxx
Xxxx Xxxxx
Xxxxx X. Xxxx
Officers:
Xxxxxx X. Xxxx President, Treasurer
Xxxx Xxxxx Secretary, Vice President
Xxxxx Xxxxxx Xxxx Assistant Secretary
Xxxxx X. Cheese of Waldorf, Inc.
State of Incorporation: Maryland
Shares/Equity Owned by Company: 100%
Directors:
Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxxxxx
Xxxxx Xxxxxxxxx
Officers:
Xxxxx Xxxxxxxxx President
Xxxxx Xxxxxxx Secretary, Treasurer
Xxxxxx Schiranko Vice President
Xxxxx X. Cheese of Gaithersburg, Inc.
State of Incorporation: Maryland
Shares/Equity Owned by Company: 80%
Directors:
Xxxx Xxxxx
Xxxxx Xxxxxxxxx
Xxxxxx Xxxxxxx
Officers:
Xxxx Xxxxx President
Xxxxx Xxxxxxxxx Secretary/Treasurer
Xxxxxx Xxxxxxx Vice President
Xxxxx X. Cheese of Xxxx Burnie, Inc.
State of Incorporation: Maryland
Shares/Equity Owned by Company: 97%
Directors:
Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxxx
Officers:
Xxxxx X. Xxxxxxx President
Xxxxx Xxxxxxxxx Vice President, Secretary,
Treasurer
Xxxx Xxx Xxxx Assistant Secretary
ShowBiz of Madison, Inc.
State of Incorporation: Wisconsin
Shares/Equity Owned by Company: 100%
Directors:
Xxxxxxx X. Xxxxx
Officers:
Xxxxxxx X. Xxxxx President
Xxxxx Xxxxxxx Vice President, Secretary
Xxxxxxx X. Xxxxxxxx Treasurer
Xxxxx X. Cheese of Diamond Point, Inc.
State of Incorporation: Maryland
Shares/Equity Owned by Company: 97%
Directors:
Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxxxxx
Xxxxx Xxxxxxx
Officers:
Xxxxx Xxxxxxx President
Xxxxxxx Xxxxxxxx Secretary, Treasure
Xxxxx X. Cheese of Westview, Inc.
State of Incorporation: Maryland
Shares/Equity Owned by Company: 98%
Directors:
Xxxxx Xxxxxxxxx
Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxxxxx
Officers:
Xxxxx Xxxxxxxxx President
Xxxxx Xxxxxxx Secretary, Treasurer
Hospitality Distribution Incorporated
State of Incorporation: Texas
Shares/Equity Owned by Company: 0%
Directors:
Xxxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxx
Xxxxx Xxxxxxxxx
Officers:
Xxxxxxx X. Xxxxx President
Xxxxx Xxxxxxxxx Secretary
Xxxxxxx X. Xxxxxxxx Vice President, Treasurer
Xxxx Xxxxxxx, Jr. Assistant Treasurer
Xxxxx X. Cheese of Silver Springs, Inc.
State of Incorporation: Maryland
Shares/Equity Owned by Company: 0%
Directors:
Xxxxxxx X. Xxxxxx
Xxxxx Xxxxxxx
Xxxxx Xxxxxxxxx
Officers:
Xxxxxxx X. Xxxxxx President
Xxxxx Xxxxxxx Secretary, Treasurer
Xxxxx Xxxxxxxxx Vice President
ShowBiz of La Crosse, Inc.
State of Incorporation: Wisconsin
Shares/Equity Owned by Company: 100%
Directors:
Xxxxxxx X. Xxxxx
Officers:
Xxxxxxx X. Xxxxx President
Xxxxx Xxxxxxx Vice President, Secretary
Xxxxxxx X. Xxxxxxxx Treasurer
ShowBiz of Ashwaubenon, Inc.
State of Incorporation: Wisconsin
Shares/Equity Owned by Company: 100%
Directors:
Xxxxxxx X. Xxxxx
Officers:
Xxxxxxx X. Xxxxx President
Xxxxx Xxxxxxx Vice President, Secretary
Xxxxxxx X. Xxxxxxxx Treasurer
SB Hospitality Corporation
State of Incorporation: Texas
Shares/Equity Owned by Company: 49 %
Directors:
Xxxxxxx X. Xxxxxx
Xxxxx Xxxxxxx
Xxxx Xxxxxxx, Jr.
Officers:
Xxxxxxx X. Xxxxxx President
Xxxxx Xxxxxxx Secretary, Vice President
Xxxx Xxxxxxx, Jr. Treasurer
ShowBiz of Arkansas, Inc.
State of Incorporation: Arkansas
Shares/Equity Owned by Company: 50%
Directors:
Xxxxxxx X. Xxxxx
Officers:
Xxxxxxx X. Xxxxx President
Xxxxx Xxxxxxx Vice President, Secretary
Xxxxxxx X. Xxxxxxxx Treasurer
Xxxx Xxxxxxx Assistant Treasurer
Affiliates
----------
International Association of ShowBiz Pizza Time Restaurants, Inc.
State of Incorporation: Texas
Shares/Equity Owned by Company: Non-Profit
Directors:
Xxx Xxxxxxx
X.X. Xxxxxxx
Xxxxx Xxxxxxxxx
Xxxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxx
Xxxxxx Xxxx
Officers:
Xxxxxxx X. Xxxxxx President
Xxxxxxx Xxxxxxxx Secretary, Treasurer
X.X. Xxxxxxx Vice President
B - SB Joint Venture Agreement
An Oklahoma joint venture including Xxxxxx X. Xxxxxxxxxx, Xxxxxxx
Xxxx Xxxxxxxxxx and ShowBiz Pizza Time, Inc.
Shares/Equity Owned by Company: 50%
MCBIZ/SHOWBIZ Joint Venture Agreement
A Kansas joint venture including MCBIZ Limited Partnership, a
Kansas limited partnership and ShowBiz Pizza Time, Inc.
Shares/Equity Owned by Company: 51%
Mid-South Joint Venture Agreement
A South Carolina joint venture including Mid-South Food
Management, Inc., a South Carolina corporation and ShowBiz Pizza
Time, Inc.
Shares/Equity Owned by Company: 30%.
ShowBiz White Settlement Club, Inc.
State of Incorporation: Texas
Shares/Equity Owned by Company: Non-Profit
Directors:
Xxxxxxx X. Xxxxxx
Xxxxx X. Xxxxxxx
Xxxx X. Xxxxxx
Officers:
Xxxxxxx X. Xxxxxx President
Xxxxx Xxxxxxx Secretary, Treasurer
Xxxx X. Xxxxxx Vice President
ShowBiz Richardson Club, Inc.
State of Incorporation: Texas
Shares/Equity Owned by Company: Non-Profit
Directors:
Xxxxxxx X. Xxxxxx
Xxxxx X. Xxxxxxx
Xxxx X. Xxxxxx
Officers:
Xxxxxxx X. Xxxxxx President
Xxxxx Xxxxxxx Secretary, Treasurer
Xxxx X. Xxxxxx Vice President
ShowBiz Redbird Club, Inc.
State of Incorporation: Texas
Shares/Equity Owned by Company: Non-Profit
Directors:
Xxxxxxx X. Xxxxxx
Xxxxx X. Xxxxxxx
Xxxx X. Xxxxxx
Officers:
Xxxxxxx X. Xxxxxx President
Xxxxx Xxxxxxx Secretary, Treasurer
Xxxx X. Xxxxxx Vice President
ShowBiz Montfort Club, Inc.
State of Incorporation: Texas
Shares/Equity Owned by Company: Non-Profit
Directors:
Xxxxxxx X. Xxxxxx
Xxxxx X. Xxxxxxx
Xxxx X. Xxxxxx
Officers:
Xxxxxxx X. Xxxxxx President
Xxxxx Xxxxxxx Secretary, Treasurer
Xxxx X. Xxxxxx Vice President
0000 Xxxxx Xxxxxxx Xxxxxx Xxxx
Xxxxx of Incorporation: Texas
Shares/Equity Owned by Company: Non-Profit
Directors:
Xxxxxxx X. Xxxxxx
Xxxxx X. Xxxxxxx
Xxxx X. Xxxxxx
Officers:
Xxxxxxx X. Xxxxxx President
Xxxxx Xxxxxxx Secretary, Treasurer
Xxxx X. Xxxxxx Vice President
0000 Xxxxx Xxxxxxxx Xxxxxxx Club
State of Incorporation: Texas
Shares/Equity Owned by Company: Non-Profit
Directors:
Xxxxxxx X. Xxxxxx
Xxxxx X. Xxxxxxx
Xxxx X. Xxxxxx
Officers:
Xxxxxxx X. Xxxxxx President
Xxxxx Xxxxxxx Secretary, Treasurer
Directors and Senior Officers of ShowBiz Pizza Time, Inc.
---------------------------------------------------------
OFFICERS
Xxxxxxx X. Xxxxx
Chairman of the Board and Chief Executive Officer
Xxxxxxx X. Xxxxxxxx
President
Xxxxxxx X. Xxxxxx
Executive Vice President -- Marketing and Entertainment
Xxxxx Xxxx
Executive Vice President -- Chief Financial Officer and Treasurer
Xxxx Xxxxx
Senior Vice President -- Construction and Entertainment Attractions
Xxxxxxxxx Xxxxxxx
Senior Vice President -- Human Resources
Xxxxxxx X. Xxxxxxx
Senior Vice President -- Strategic Planning and Franchise
Operations
BOARD OF DIRECTORS
Xxxxxxx X. Xxxxxx, Xx.
Partner -- Xxxxxx & XxXxxx, P.C.
Xxxxxxx X. Xxxxx
Chairman of the Board, and Chief Executive Officer
Xxxxxxx X. Xxxxxxxx
Chairman and Chief Executive Officer
The Hallwood Group Incorporated
Xxxxxx X. Xxxxx
Vice Chairman
The Hallwood Group Incorporated
Xxxxx X. Xxxx
President, Xxxx Enterprises, Inc.
Xxxxxxx X. Xxxxx
President, X. Xxxxx & Company, Inc.
J. Xxxxxx Xxxxxx
The Xxxxxx Company
Xxxxx X. Xxxxx
President and Chief Operating Officer
The Hallwood Group Incorporated
Xxxxxx Xxxxxxxx
Xxxxxx Partners Incorporated
SCHEDULE 5.5
Financial Statements
10K Annual Report for Fiscal year ended December 28, 1990.
10K Annual Report for Fiscal year ended December 27, 1991.
10K Annual Report for Fiscal year ended January 1, 1993.
10K Annual Report for Fiscal year ended December 31, 1993.
10K Annual Report for Fiscal year ended December 30, 1994.
10Q Quarterly Report for quarterly period ended March 31, 1995.
10Q Quarterly Report for quarterly period ended June 30, 1995.
------
SCHEDULE 5.8
Litigation
None.
--------
SCHEDULE 5.11
Licenses, Etc.
CHICO CHEESES PIZZA, Brazilian Trademark, Registration No.
817043209 in Class 28.10 ("games, toys and pastimes")
CHICO CHEESES PIZZA, Brazilian Trademark, Registration No.
817043217 in Class 32.10 ("doughs, pastries in general")
SCHEDULE 5.15
Existing Indebtedness
Liens on personal property securing Standby Letters of Credit Nos.
50060624 and 50072426, as of March 31, 1995, issued by the Bank of
Boston in the respective face amounts of $58,600 and $1,500,000,
paid off from the proceeds under the Loan Agreement, dated June 27,
1995.
$29,200,000 owed to the Bank of Boston as of March 31, 1995,
excluding the Letters of Credit, paid off from the proceeds under
the Note Purchase Agreement, dated June 15, 1995.
On June 15, 1995, the Company issued Series A Senior Notes and
Series B Senior Notes, totaling $28,000,000.
On June 27, 1995, the Company entered into a Loan Agreement with
Bank One, Texas, N.A., with a revolving credit commitment in an
amount equal to $5,000,000.
Other existing indebtedness on the date of closing which would be
permitted under Section 8.1 (a) of the Loan Agreement, consisting
of capital lease obligations totaling $1,193,915 and other
indebtedness that does not exceed in the aggregate $500,000.
The Company has guaranteed certain obligations related to
restaurant building and equipment leases. The underlying assets
are collateral for the leases and the makers or assignees of all of
the obligations are required to perform thereunder before the
Company is required to fulfill its guarantee. In the event of
default by the maker or assignee, the Company, in almost all cases,
may make payment under the guarantees in accordance with the
original payment schedule and has the right to locate potential
buyers or subtenants for the assets. As of March 31, 1995, such
guarantees aggregated approximately $989,000.
The Company has a limited recourse guaranty of Monterey Acquisition
Corp.'s obligation to repay a $4,700,000 term loan to Greyhound
Financial Corporation. This guaranty is limited in recourse to the
Company's pledge of its interest in 143,250 shares of common stock
of Monterey Acquisition Corp. valued at $437,500 in the aggregate.
