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Exhibit 10.3
AMERICAN RESTAURANT GROUP HOLDINGS, INC.
AND
UNITED STATES TRUST COMPANY OF NEW YORK,
---------------------------
SECOND SUPPLEMENTAL
INDENTURE
Dated as of February 25, 1998
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SECOND SUPPLEMENTAL INDENTURE, dated as of February 25, 1998,
between AMERICAN RESTAURANT GROUP HOLDINGS, INC., a Delaware corporation (the
"Issuer"), and UNITED STATES TRUST COMPANY OF NEW YORK, as trustee (the
"Trustee"), under the Indenture dated as of December 1, 1993, as amended by that
certain First Supplemental Indenture, dated as of March 13, 1996 (the
"Indenture").
RECITALS
WHEREAS, pursuant to the Indenture, the Issuer has issued
$105,557,000 aggregate principal amount of its 14% Senior Discount Debentures
due 2005 (the "Securities");
WHEREAS, Section 9.02 of the Indenture provides, among other things,
that the Issuer and the Trustee may, with the consent of the Holders (as defined
therein) of not less than a majority in aggregate principal amount of the
Securities then outstanding, amend the Indenture in certain respects;
WHEREAS, the Issuer, pursuant to the foregoing authority, pro poses
in and by this Second Supplemental Indenture to amend the Indenture in certain
respects as described herein and to amend and restate the terms of the Series A
and Series B Securities as Series C Securities; and
WHEREAS, all things necessary to make this Second Supplemental
Indenture a valid agreement of the Issuer and the Trustee and a valid amendment
of and supplement to the Indenture have been done;
NOW, THEREFORE, in consideration of the premises, the Issuer and the
Trustee agree as follows:
ARTICLE I
AMENDMENTS TO THE INDENTURE
Section 1.1 Amendment to Section 1.01-New Definitions. Section 1.01
of the Indenture is hereby amended by adding the following new definitions in
the appropriate alphabetical order:
"Beneficial Owner" means any Person who, directly or indirectly, through
any contract, arrangement, understanding, relationship or otherwise, has or
shares with any other Person or Persons (a) the power to vote or give consent
with respect to any Securities under the Indenture, which includes the power to
direct the voting
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of or consent with respect to any Securities, or (b) the power to invest the
principal of or interest on any Securities, which includes the power to dispose
or direct the disposition of any Securities or any payments thereon or
thereunder or to receive or invest the proceeds therefrom. A person may be
regarded, under circumstances which enable the exercise of the aforesaid powers
(whether or not exercised ), as having beneficial ownership of a Security which
is owned (1) by that person's spouse or minor children or by any of that
person's relatives or spouse's relatives who share the same home with that
person; (2) a partnership of which that person is a partner; or (3) a
corporation of which that person is a substantial shareholder. A person is also
deemed to be the beneficial owner of Securities which that person has the right
to acquire within 60 days, including but not limited to any right to acquire
through the exercise of an option, pursuant to the power to revoke a trust or
pursuant to the automatic termination of a trust.
"Excess Cash" means (a) the aggregate amount of cash and Cash Equivalents
received by the Company from its Subsidiaries, including from dividends plus (b)
the net proceeds from the sale of any stock of ARG by the Company, less in each
case the provision for income and other taxes of the Company for the current
fiscal year and the immediately preceding fiscal year and amounts necessary for
the payment of ordinary and customary operating expenses of the Company.
"Exchange Debentures" means the 12% Subordinated Debentures due 2003 of
ARG issued in exchange for the PIK Preferred Stock having an aggregate principal
amount equal to the aggregate liquidation preference of the PIK Preferred Stock.
"New Credit Facility" means the credit agreement among ARG and its
Subsidiaries, the Credit Agent, BankBoston, N.A. and the lenders party thereto,
providing for loans of up to $20 million, as such agreement may be amended,
supplemented or otherwise modified, refinanced or replaced from time to time.
"New Senior Secured Note Indenture" means the Indenture, dated as of
February 25, 1998, among ARG, the Guarantors named therein and U.S. Trust
Company, as trustee, as amended, supplemented or otherwise modified from time to
time.
"New Senior Secured Notes" means any series of the 11 1/2% Senior Secured
Notes due 2003 of ARG and the guarantees thereof issued under the New Senior
Secured Note Indenture, as amended, supplemented or otherwise modified from time
to time.
"New Warrants" means the Common Stock Purchase Warrants issued on February
25, 1998 to purchase initially 104,794 shares, subject to adjustment
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pursuant to the Warrant Agreement relating thereto (the "Warrant Agreement") of
the Common Stock, par value $.01 per share of ARG (the "ARG Common Stock"), at
an initial exercise price, subject to adjustment pursuant to the Warrant
Agreement, of $.01 per share.
"Options" means options issued to management and employees of ARG and its
Subsidiaries with respect to up to 15% of the fully diluted ARG Common Stock
outstanding.
"PIK Preferred Stock" means any series of the 12% Senior Exchangeable
Preferred Stock of ARG having an aggregate liquidation preference of up to $100
million outstanding at any time.
"Refinancing Date" means February 25, 1998.
"Series C Securities" means the 14.25% Senior Discount Debentures due
2005, Series C, issued pursuant to this Indenture as an amendment and
restatement of the Series A and Series B Securities.
Section 1.2 Amendment to Section 1.01-Deletion of Definitions.
Section 1.01 of the Indenture is hereby amended by deleting the following
definitions in their entirety: "Credit Facility", "Designated Restaurant", "Net
Cash Proceeds of Mortgage Indebtedness", "Net Proceeds Offer Trigger Date" and
"Plan of Liquidation".
Section 1.3 Amendment to Section 1.01-Accreted Value. The definition
of "Accreted Value" contained in Section 1.01 of the Indenture is hereby amended
by adding the following sentence to the end thereof:
"For the purposes of determining the Accreted Value of the Series C
Securities, "Accreted Value" means as of any date of determination (a) on
or after February 24, 1998 and prior to June 15, 1998, the sum of $341.35
per $1,000 principal amount of Series C Securities plus the Proportionate
Amount on such date and (b) on or after June 15, 1998, the sum of $356.15
plus the portion of the excess of the principal amount of each Series C
Security over such amount which shall have been amortized through such
date, such amount to be so amortized on a daily basis and compounded
semi-annually on each June 15 and December 15 at the rate of 14.25% per
annum from June 15, 1998 through the date of determination computed on the
basis of a 360-day year of twelve 30-day months. The "Proportion ate
Amount" with respect to a Series C Security, as of any date, is defined as
an amount equal to the product of (i) $14.80
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multiplied by (ii) a fraction, the numerator of which is the actual number
of days elapsed from February 24, 1998 to and including the date for which
the Proportionate Amount is being determined, and the denominator of which
is 111."
Section 1.4 Amendment to Section 1.01-ARG. The definition of "ARG"
contained in Section 1.01 of the Indenture is hereby amended by deleting from
the end thereof the words ", a Wholly-Owned Subsidiary of the Company".
Section 1.5 Amendment to Section 1.01-Asset Sale. The definition of
"Asset Sale" contained in Section 1.01 of the Indenture is hereby amended by
deleting the words "provided that any sale or transfer of assets (a) from a
Subsidiary to the Company or any Wholly-Owned Subsidiary or (b) made in
accordance with Section 5.01 shall not constitute an Asset Sale" at the end
thereof and replacing such words with the words "provided that any sale or
transfer of assets from a Subsidiary to the Company or any Wholly-Owned
Subsidiary shall not constitute an Asset Sale".
Section 1.6 Amendment to Section 1.01-Change of Control. The
definition of "Change of Control" contained in Section 1.01 of the Indenture is
hereby amended by deleting the reference to "(i)" and deleting at the end
thereof the words "or (ii) so long as Senior Secured Notes remain outstanding,
the occurrence of a "Change of Control" as such term is defined in the Senior
Secured Note Indenture governing such Senior Secured Notes".
Section 1.7 Amendment to Section 1.01 - Credit Agent. The definition
of "Credit Agent" contained in Section 1.01 of the Indenture is hereby amended
and restated in its entirety as follows:
""Credit Agent" means BankBoston, N.A., as agent under the New Credit
Facility, and any successor thereof in such capacity."
Section 1.8 Amendment to Section 1.01-Lenders. The definition of
"Lenders" contained in Section 1.01 of the Indenture is hereby amended and
restated in its entirety as follows:
""Lenders" means the Lenders listed on the signature pages of the New
Credit Facility, together with any financial institution that may become a party
to the New Credit Facility as therein provided."
Section 1.9 Amendment to Section 1.01-Letter of Credit Obligations.
The definition of "Letter of Credit Obligations" contained in Section
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1.01 of the Indenture is hereby amended by replacing the words "Credit Facility"
with the words "New Credit Facility".
Section 1.10 Amendment to Section 1.01-Permitted Investment.
Subsection (viii) of the definition of "Permitted Investment" contained in
Section 1.01 of the Indenture is hereby amended and restated in its entirety as
follows:
"(viii) Investments in connection with any merger or consolidation in
accordance with the provisions of Section 5.01 hereof, and"
Section 1.11 Amendment to Section 1.01-Refinancing Indebtedness. The
definition of "Refinancing Indebtedness" contained in Section 1.01 of the
Indenture is hereby amended and restated by deleting the words "or (xiv)" and
replacing such words with the words ", (xiv), (xv), (xvi) or (xvii),"
Section 1.12 Amendment to Section 1.01-Restricted Security. The
definition of "Restricted Security" contained in Section 1.01 of the Indenture
is hereby amended by adding to the end thereof the following sentence:
"For purposes hereof, the Series C Securities shall be deemed Restricted
Securities, whether or not such Securities bear the Private Placement Legend."
Section 1.13 Amendment to Section 1.01-Securities. The definition of
"Securities" contained in Section 1.01 of the Indenture is hereby amended and
restated in its entirety as follows:
"Securities" and "Security" mean the Series A Securities, Series B
Securities and Series C Securities, as amended or supplemented from time to
time, that are issued under this Indenture, including, without limitation, the
Additional Securities."
Section 1.14 Amendment to Section 1.01-"Wholly-Owned Subsidiary."
The definition of "Wholly-Owned Subsidiary" contained in Section 1.01 of the
Indenture is hereby amended by adding "(a)" after the word "means," and by
adding to the end thereof the words "and (b) with respect to the Company, any
direct Subsidiary of the Company and any Wholly-Owned Subsidiary of such
Subsidiary."
Section 1.15 Amendment to Section 2.01. Section 2.01 of the
Indenture is hereby amended by adding the following sentence after the first
sentence of the first paragraph thereof.
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"The Series C Securities and the Trustee's certificate of authentication
thereof shall be substantially in the form of Exhibit A-3 annexed hereto."
Section 1.16 Amendment to Section 2.02 and Section 2.06.
(a) Section 2.02 of the Indenture is hereby amended by deleting the
last sentence of the fourth paragraph thereof and replacing it with the
following sentence:
"The Trustee or an Authenticating Agent shall authenticate Series C
Securities for original issue in the aggregate principal amount of $245,679,000
upon written order of the Company signed by an Officer of the Company. In each
case, the order shall specify the amount of Securities to be authenticated and
the date on which the original issue of Securities is to be authenticated. The
aggregate principal amount of Securities issued and outstanding at any time may
not exceed $245,678,800, except as provided in Section 2.07."
(b) Section 2.02 of the Indenture is hereby amended by adding the
following sentence to the end of the eighth paragraph thereof:
"Notwithstanding the foregoing, the Series C Securities shall be issued in
the form of certificated Securities in registered form only in denominations of
$1,000,000 and integral multiples of $100 in excess thereof."
(c) Section 2.06 of the Indenture is hereby amended by adding the
following paragraph:
"Neither the Company nor the Registrar shall be required to register the
transfer or exchange of any Series C Securities (i) unless the Registrar has
received a certification, in form and substance satisfactory to the Registrar,
of the number of Beneficial Owners of such Series C Securities or (ii) if such
transfer would be prohibited by the provisions of Section 2.17."
Section 1.17 Amendment to Section 2.15. Section 2.15(b) of the
Indenture is hereby amended by replacing the last sentence thereof with the
following sentence:
"In addition, Physical Securities shall be transferred to all beneficial
owners in exchange for their beneficial interests in Global Securities (i) if
the Depository notifies the Company that it is unwilling or unable to continue
as Depository for any Global Security and a successor depositary is not
appointed by the Company within 90 days of such notice, (ii) if an Event of
Default has occurred and is continuing and the Registrar has received a request
from the Depository to issue Physical
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Securities or (iii) with respect to the Series C Securities, at any time after
the issuance of the Series C Securities."
Section 1.18 Amendment to Article 2. Article 2 of the Indenture is
hereby amended by adding the following section to the end thereof:
"Section 2.17. Limited Number of Beneficial Owners of the Securities. By
accepting the Series C Securities, the registered Holder thereof agrees (i) to
promptly notify the Registrar in writing if the number of Beneficial Owners of
such Security changes at any time during the period that such registered Holder
owns such Security, and (ii) that it will not permit the Beneficial Owners of
such Security to be increased without the prior written consent of the
Registrar. The Registrar shall note in the Security Register with respect to the
Series C Securities the number of Beneficial Owners of each Security (as
determined by certifications delivered by the Holders of Securities pursuant to
section 2.06 in their representation letters or other written notification
received from Security holders with respect to changes in the number of
Beneficial Owners of Securities in requesting permission to increase the number
of Beneficial Owners of Securities). The Registrar shall deny permission to
register the Security in the name of a transferee pursuant to Section 2.06 and
not consent to increase the number of Beneficial Owners of a Security if such
registration or consent will result in the number of Beneficial Owners exceeding
75 in number. In monitoring the number of Beneficial Owners of Securities, the
Registrar may rely, without independent inquiry, upon all certifications and
written notifications delivered to the Registrar and may assume that the facts
therein stated for any Securityholder have not changed since the most recent
certification or written notification received with respect to such Security.
The Registrar shall not prohibit the transfer of a Series C Security by a
Securityholder to a purchaser or assignee if such Securityholder has so notified
the Registrar (and, in the case of a prior transfer, received its consent),
provided that the number of Beneficial Owners of such Security subsequent to
such transfer does not exceed the number of Beneficial Owners of such Security
(as determined by reference to the most recent certification or notification of
the transferring Securityholder) prior to such transfer.
Section 1.19 Amendment to Section 3.04. Section 3.04 of the
Indenture is hereby amended by replacing the first sentence thereof with the
following:
"Once notice of redemption is mailed, Securities called for redemption
become due and payable on the redemption date and at the redemption price and
shall cease to bear interest (and cease to increase in their Accreted Value)
from and after the redemption date (unless the Company shall default in the
payment of the redemption price or accrued interest).
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Section 1.20 Amendment to Section 3.07. Section 3.07(a) of the
Indenture is hereby amended by replacing each reference to the date "December
15, 1998" with the date "December 15, 2005."
Section 1.21 Amendment to Section 3.08. Section 3.08 shall be
amended in its entirety to read as follows:
"Section 3.08 Excess Cash Offer
(a) Not later than 30 Business Days after any date on which the
Accumulated Amount (as defined) exceeds $1.0 million, the Company will make an
irrevocable, unconditional offer (an "Excess Cash Offer") to the Holders to
purchase the maximum amount of Notes which could be acquired by application of
the Accumulated Amount as described herein (the "Excess Cash Offer Amount"), at
a purchase price (the "Excess Cash Offer Price") equal to 100% of the Accreted
Value of the Notes on the date the Notes tendered are purchased and paid for in
accordance with the Indenture, which date shall be no later than 30 business
Days after the first date on which the Excess Cash Offer is required to be made
(the "Excess Cash Purchase Date"). Notice of an Excess Cash Offer will be sent
at least 20 Business Days prior to the close of business on the third Business
Day prior to the Excess Cash Purchase Date (the "Final Put Date"), by
first-class mail, by the Company to each Holder at the address on the books of
the Registrar, with a copy to the Indenture Trustee. The notice to the Holders
will contain all information, instructions, and materials required by
applicable law or otherwise material to such Holders' decision to tender Notes
pursuant to the Excess Cash Offer. An amount equal to the aggregate of all
Excess Cash received by the Company is referred to as the "Accumulated Amount."
Prior to making any Excess Cash Offer, the Company shall invest the Accumulated
Amount only in cash and Cash Equivalents. The Company may, at its option, elect
to make an Excess Cash Offer in the manner specified herein prior to the time
that the Accumulated Amount exceeds $1.0 million.
(b) To the extent applicable and if required by law, the Company
shall comply with Section 14 of the Exchange Act and the provisions of
Regulation 14E and any other tender offer rules under the Exchange Act and other
securities laws, rules, and regulations which may then be applicable to any
Excess Cash Offer by the Company to purchase the Notes. The Company shall give
the Indenture Trustee prompt notice if the Accumulated Amount exceeds $1.0
million.
(c) On or before an Excess Cash Purchase Date, the Company shall (a)
accept for payment Notes or portions thereof properly tendered pursuant to the
Excess Cash Offer prior to the close of business on the Final Put Date (on a pro
rata basis to the maximum extent possible) based on the Accreted Value of the
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Notes actually tendered if Notes with an Accreted Value in excess of the
Accreted Value of Notes to be acquired are tendered and not withdrawn), (b)
deposit with the Paying Agent U.S. legal Tender sufficient to pay the Excess
Cash Offer Price through the Excess Cash Purchase Date of all Notes or portions
thereof so accepted, and (c) deliver to the Indenture Trustee Notes so accepted
together with an Officers' Certificate stating Notes or portions thereof being
purchased by the Company. The Paying Agent shall promptly mail or deliver to
Holders of Notes so accepted, payment in an amount equal to the Excess Cash
Offer Price through the Excess Cash Purchase Date for such Notes. The Indenture
Trustee shall promptly cancel all Notes accepted by the Company pursuant to the
Excess Cash Offer and authenticate and mail or deliver to the Holders of Notes
so accepted a new Note equal in Accreted Value to any unpurchased portion of the
Note surrendered. Any Notes not so accepted shall be promptly mailed or
delivered by the Company to the Holder thereof. The Company will publicly
announce the results of the Excess Cash Offer on or as soon as practicable after
the Excess Cash Payment Date.
(d) If the amount required to acquire all Notes tendered by Holders
pursuant to the Excess Cash Offer (the "Excess Cash Acceptance Amount") shall be
less than the aggregate Excess Cash Offer Amount, the excess of the Excess Cash
Offer Amount over the Excess Cash Acceptance Amount may be (i) invested in cash
or Cash Equivalents or (ii) used by the Company to redeem the Notes. Upon
consummation of any Excess Cash Offer made in accordance with the terms of the
Indenture, the Accumulated Amount will be reduced to zero."
Section 1.22 Amendment to Section 4.04.
(a) Section 4.04(a)(i) of the Indenture is hereby amended and
restated in its entirety as follows:
"(i) intentionally omitted"
(b) Section 4.04(a) of the Indenture is hereby amended by replacing
the word "and" with a comma immediately before "(vi)" and by adding the
following words to the end thereof:
"(vii) the New Credit Facility, (viii) the New Senior Secured Note
Indenture, (ix) the PIK Preferred Stock, (x) the Exchange Debentures and (x) any
other Indebtedness permitted to be incurred under the New Credit Facility or the
New Senior Secured Note Indenture (whether or not still in effect)."
(c) Section 4.04(g) of the Indenture is hereby amended by replacing
the words "Credit Facility as in effect on the Issue Date" with the words "New
Credit Facility".
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Section 1.23 Amendment to Section 4.05.
(a) Section 4.05(b) of the Indenture is hereby amended and restated
by replacing subsections (i) and (ii) thereof with the following:
"(i) Indebtedness of ARG and its Subsidiaries under the New Credit
Facility and any refinancing, refunding, replacement or extension thereof in an
aggregate principal amount at any time outstanding not to exceed $26 million
(plus Obligations for related payments for early termination, interest, fees,
expenses and indemnities and other amounts payable thereunder or in connection
therewith); (ii) Indebtedness evidenced by the Senior Secured Notes and the New
Senior Secured Notes;"
(b) Section 4.05(b) of the Indenture is hereby amended and restated
by replacing subsections (viii) thereof with the following:
"(viii) Mortgage Indebtedness; provided, that such Mortgage Indebtedness
may, at the option of the Company, be incurred by a Mortgage Subsidiary; and
provided, further, the loan-to-value ratio is not less than 60% and not more
than 100% for properties owned in fee at the time of issuance;"
(c) Section 4.05(b) of the Indenture is hereby amended and restated
by replacing the word "and" with a comma immediately before "(xv)" and replacing
subsection (xv) with the following:
"; (xv) the PIK Preferred Stock; (xvi) the Exchange Debentures; (xvii) to
the extent not otherwise permitted hereunder, Indebtedness permitted to be
incurred under the New Senior Secured Note Indenture (whether or not still in
effect); and (xviii) Indebtedness not otherwise expressly permitted by clauses
(i) through (xvii) above in an aggregate principal amount not to exceed
$25,000,000 at any one time."
Section 1.24 Amendment to Section 4.06. Section 4.06 of the
Indenture is hereby amended and restated in its entirety by replacing it with
the following:
"Section 4.06 Intentionally Left Blank."
Section 1.25 Amendment to Section 4.07. Section 4.07(iii) of the
Indenture is hereby amended and restated in its entirety as follows:
"(iii) Liens to secure Indebtedness permitted to be incurred
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pursuant to Section 4.05 and Indebtedness which is incurred to renew, extend,
replace or refinance Indebtedness secured by a Lien on any property or asset of
the Company and which is permitted to be incurred pursuant to Section 4.05
hereof; provided that such Liens do not extend to or cover any property or asset
other than the property or asset securing the Indebtedness being renewed,
extended, replaced or refinanced;"
Section 1.26 Amendment to Section 4.08. Section 4.08 of the
Indenture is hereby amended and restated by (i) replacing each reference to
"Issue Date" with the words "Refinancing Date" and (ii) replacing subsection
(vi) with the following:
"(vi) the existence of, or the performance by the Company or any of its
Subsidiaries of its obligations under the terms of, any Common Stock
Subscription Agreement or other stockholder agreement or any stock option or
incentive plan (including any registration rights agreement or purchase
agreement related thereto) to which the Company or any of its Subsidiaries is a
party as of the Refinancing Date and any similar agreements which it or any of
its Subsidiaries may enter into thereafter; provided, however, that the
performance by the Company or any of its Subsidiaries of obligations under any
future amendment to any such existing agreement or under any similar agreement
entered into after the Refinancing Date shall only be permitted by this clause
(vi) to the extent that the terms of any such amendment or new agreement are not
otherwise more onerous to the Company or any of its Subsidiaries party to such
agreement in any material respect,"
Section 4.08 of the Indenture is hereby amended by adding the
following:
"or (viii) transactions with Affiliates permitted to be entered into
under the New Senior Secured Note Indenture (whether or not still in effect)."
Section 1.27 Amendment to Section 4.13. Section 4.13 of the
Indenture is hereby amended by deleting the words "or any default in any payment
of principal or interest due under the Credit Facility".
Section 1.28 Amendment to Section 4.10 and Section 4.14.
(a) Section 4.10 of the Indenture is hereby amended by adding
the following sentence: "Notwithstanding the foregoing, ARG may issue (i) the
PIK Preferred Stock and shares of ARG Capital Stock issued to management and
employees of ARG and its Subsidiaries with respect to up to 15% of the fully
diluted ARG Common Stock outstanding , (ii) the New Warrants, the Options and
the shares of common stock of ARG issuable upon exercise or exchange of the PIK
Preferred Stock, the New Warrants and the Options, and (iii) Capital Stock in
bona
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fide public offerings of up to 50% of the outstanding Capital Stock on a fully
diluted basis having the right to vote generally in the election of directors
(including for purposes of such calculation the shares issued in such
offerings)."
(b) Section 4.14(a) and Section 4.14(b) of the Indenture are
hereby amended and restated in their entirety as follows:
"(a) The Company (at its own expense) shall file with the
Trustee within 5 days after filing with the SEC copies of the annual reports and
the information, documents, and other reports (or copies of such portions of
any of the foregoing as the SEC may by rules and regulations prescribe) to be
filed by ARG pursuant to Section 13 or 15(d) of the Exchange Act (without regard
to whether ARG is subject to the requirements of such Section 13 or 15(d) of the
Exchange Act).
(b) At the Company's expense, the Company shall cause an
annual report if furnished by ARG to its stockholders generally and each
quarterly or other financial report if furnished by ARG to its stockholders
generally to be filed with the Trustee and mailed to the Holders at their
addresses appearing in the register of Securities maintained by the Registrar at
the time of such mailing or furnishing to stockholders. If the Trustee (at the
Company's request and expense) is to mail the foregoing information to the
Holders, the Company shall supply such information to the Trustee at least five
days prior thereto."
Section 1.29 Amendment to Section 5.01. Section 5.01 of the
Indenture is hereby amended and restated in its entirety as follows:
"SECTION 5.01. Consolidations, Merger.
The Company shall not in a single transaction or through a
series of related transactions, consolidate with or merge with or into
any other Person, unless:
(1) either the Company shall be the continuing Person, or the Person
(if other than the Company) formed by such consolidation or into which the
Company is merged (the Company or such other Person being hereinafter referred
to as the "Surviving Person") shall be a corporation organized and validly
existing under the laws of the United States, any State thereof or the District
of Columbia, and shall expressly assume, by an indenture supplemental hereto,
executed and delivered to the Trustee, in form satisfactory to the Trustee, all
the obligations of the Company under the Securities and this Indenture;
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(2) except in the case of a transaction described in this Section
5.01 or between the Company and ARG, immediately after giving effect to such
transaction on a pro forma basis, the Surviving Person could incur $1.00 of
Indebtedness pursuant to the first paragraph of Section 4.05 (without giving
effect to the second paragraph thereof);
(3) immediately before and immediately after giving effect to such
transaction and the assumption of the obligations as set forth in clause (1)
above and the incurrence or anticipated incurrence of any Indebtedness to be
incurred in connection therewith, no Default or Event of Default shall have
occurred and be continuing; and
(4) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such consolidation or
merger and such supple mental indenture comply with this Article 5 and that all
conditions precedent herein provided relating to such transaction have been
satisfied."
Section 1.30 Amendment to Section 5.02. Section 5.02 of the
Indenture is hereby amended by deleting the words "or any transfer of assets"
and "or to which such transfer is made" from the first sentence thereof.
Section 1.31 Amendment to Section 6.02. Section 6.02 of the
Indenture is hereby amended by replacing each reference to the date "December
15, 1998" with the date "December 15, 2005."
Section 1.32 Amendment to Article 10. Article 10 of the
Indenture is hereby amended by adding the following Section to the end thereof:
"10.16 Separate Corporate Identity.
Each Holder of a Security by accepting a Security acknowledges (i) that
the Company is a separate legal entity from ARG, (ii) that the Holder is not
relying on the credit of ARG in acquiring or holding the Security, but is
relying solely on the credit of the Company, whose sole business at the time of
the issuance of the Series C Securities is holding common stock of ARG, (iii)
that the Holder is not looking to or relying on the assets, income, or cash flow
of ARG as a source of payment of the Security, except as such assets, income or
cash flow may be distributed to the Company in its capacity as a stockholder of
ARG to the extent permitted by any agreement to which ARG is a party (including
the New Credit Facility) and to the extent declared by ARG's Board of Directors,
and (iv) that the Holder has not received or relied on any information or
representation that is contrary to the matters set forth above in this
paragraph."
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Section 1.33 Amendment to Sections 7.05, 7.08 and 9.02.
Sections 7.05, 7.08 and 9.02 of the Indenture are hereby amended by deleting the
words "(with a copy to the Credit Agent)".
Section 1.34 Amendment to Exhibits. The Exhibits of the
Indenture are hereby amended by adding as Exhibit A-1 thereto the form of Series
C Security attached hereto as Annex 1.
ARTICLE II
MISCELLANEOUS
Section 2.1 Incorporation of Indenture. All the provisions of
this Second Supplemental Indenture shall be deemed to be incorporated in, and
made a part of, the Indenture; and the Indenture, as supplemented and amended by
this Second Supplemental Indenture, shall be read, taken and construed as one
and the same instrument.
Section 2.2 Headings. The headings of the Articles and
Sections of this Second Supplemental Indenture are inserted for convenience of
reference and shall not be deemed to be a part thereof.
Section 2.3 Counterparts. This Second Supplemental Indenture
may be executed in any number of counterparts, each of which so executed shall
be deemed to be an original, but all such counterparts shall together constitute
but one and the same instrument.
Section 2.4 Successors. All covenants and agreements in this
Second Supplemental Indenture by the Issuer and the Trustee shall bind their
respective successors.
Section 2.5 Separability Clause. In case any provision in this
Second Supplemental Indenture shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
Section 2.6 Benefits of Second Supplemental Indenture. Nothing
in this Second Supplemental Indenture, express or implied, shall give to any
person, other than the parties hereto and their successors hereunder and the
Holders, any benefit or any legal or equitable right, remedy or claim under this
Second Supple mental Indenture.
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Section 2.7 Terms Defined. All terms defined elsewhere in the
Indenture have the same meanings herein.
Section 2.8 Governing Law. THIS SECOND SUPPLEMENTAL INDENTURE
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CHOICE OF LAW.
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17
IN WITNESS WHEREOF, the parties hereto have caused this Second
Supplemental Indenture to be duly executed and attested, all as of the day and
year first above written.
AMERICAN RESTAURANT GROUP
HOLDINGS, INC.
By:________________________________
Name:
Title:
Attest:
By:_________________________
Name:
Title:
UNITED STATES TRUST COMPANY OF
NEW YORK, as Trustee
By:________________________________
Name:
Title:
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ANNEX 1
EXHIBIT A-1
[FORM OF SERIES C SECURITY]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS
EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS
THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS
DEFINED IN RULE 501 (A)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT) (AN "AC
CREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS
SECURITY IN AN OFFSHORE TRANSACTION, (2) AGREES THAT IT WILL NOT WITHIN TWO
YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY RESELL OR OTHERWISE TRANSFER
THIS SECURITY EXCEPT (A) TO AMERICAN RESTAURANT GROUP HOLDINGS, INC. (THE
"COMPANY") OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A
QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES
ACT, (C) INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT,
PRIOR TO SUCH TRANSFER, FURNISHES (OR HAS FURNISHED ON ITS BEHALF BY A U.S.
BROKER-DEALER) TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS
AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS SECURITY (THE
FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE FOR THIS SECURITY), (D)
OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904
UNDER THE SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION
PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), OR (F) PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT
IT WILL GIVE TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF
THIS SECURITY WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY, IF
THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR, THE HOLDER
MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE AND THE COMPANY
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SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE
TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANING GIVEN TO THEM
BY REGULATION S UNDER THE SECURITIES ACT.
EACH TRANSFEREE AND HOLDER AGREES TO DELIVER THE CERTIFICATE REQUIRED BY
SECTION 2.06 AND 2.17, RESPECTIVELY, REGARDING THE NUMBER OF, OR ANY CHANGES
IN, BENEFICIAL OWNERS OF THIS SECURITY.
THE NUMBER OF BENEFICIAL OWNERS OF SERIES C SECURITIES SHALL BE LIMITED TO 75.
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AMERICAN RESTAURANT GROUP HOLDINGS, INC.
14.25% Senior Discount Debenture
due December 15, 2005, Series C
No. $
AMERICAN RESTAURANT GROUP HOLDINGS, INC., a Delaware
corporation (the "Company", which term includes any successor corporation), for
value received promises to pay to or registered assigns, the principal sum of
Dollars, on December 15, 2005.
Reference is made to the further provisions of this Security
contained herein, which will for all purposes have the same effect as if set
forth at this place.
IN WITNESS WHEREOF, the Company has caused this Security to be
signed manually or by facsimile by its duly authorized officers.
Dated:
AMERICAN RESTAURANT GROUP
HOLDINGS, INC.
By:______________________________________________
Name:
Title:
By:______________________________________________
Name:
Title:
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21
This is one of the Securities described in the
within-mentioned Indenture.
UNITED STATES TRUST COMPANY OF CAL
IFFY, N.A., as Trustee
By:__________________________________________
Authorized Signatory
22
AMERICAN RESTAURANT GROUP HOLDINGS, INC.
14.25% Senior Discount Debenture due 2005, Series C
1. Accretion; Interest.
American Restaurant Group Holdings, Inc., a Delaware
corporation (the "Company"), will not pay cash interest on the principal amount
of this Security. The Accreted Value of this Security will equal as of any date
of determination on or after February 24, 1998 and prior to June 15, 1998 (a)
the sum of $341.35 per $1,000 principal amount of this Security plus the
Proportionate Amount on such date and (b) on or after June 15, 1998, the sum of
$356.15 plus the portion of the excess of the principal amount of this Security
over such amount which shall have been amortized through such date, such amount
to be so amortized on a daily basis and compounded semi-annually on each June 15
and December 15 at the rate of 14.25% per annum from June 15, 1998 through the
date of determination computed on the basis of a 360-day year of twelve 30-day
months.
The Company shall pay interest on overdue principal to the
extent lawful, at a rate equal to 16.25% per annum.
2. Method of Payment.
Holders must surrender Securities to a Paying Agent to collect
principal payments. The Company shall pay principal, premium, if any, and
interest, if any, in money of the United States that at the time of payment is
legal tender for payment of public and private debts ("U.S. Legal Tender").
However, the Company may pay principal, premium, if any, and interest, if any,
by wire transfer of Federal funds, or interest, if any, by its check payable in
such U.S. Legal Tender. The Company may deliver any such interest payment to the
Paying Agent or to a Holder at the Holder's registered address.
3. Paying Agent and Registrar.
Initially, United States Trust Company of New York will act as
Paying Agent and Registrar. The Company may change any Paying Agent, Registrar
or co-Registrar without notice to the Holders. The Company or any of its
Subsidiaries may, subject to certain exceptions, act as Paying Agent, Registrar
or co-Registrar.
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23
4. Indenture.
The Company issued the Securities under an Indenture, dated as
of December 1, 1993, among the Company and United States Trust Company of New
York (the "Trustee"), as amended on March 13, 1996 and February 25,1998 (the
"Indenture"). Capitalized terms herein are used as defined in the Indenture
unless otherwise defined herein. The terms of the Securities include those
stated in the Indenture and those made part of the Indenture by reference to the
Trust Indenture Act of 1939 (15 U.S. Code Sections 77aaa-77bbbb) (the
"TIA"), as in effect on the date of the Indenture. Notwithstanding anything to
the contrary herein, the Securities are subject to all such terms, and Holders
of Securities are referred to the Indenture and said Act for a statement of
them. The Securities are senior obligations of the Company limited in aggregate
principal amount to $245,678,800.
5. Optional Redemption and Prepayment.
The Securities will be subject to redemption at the option of
the Company, in whole or in part, upon not less than 30 nor more than 60 days'
notice, at the Accreted Value thereof plus accrued and unpaid interest, if any,
thereon to the applicable redemption date.
6. Notice of Redemption.
Notice of redemption will be mailed at least 30 days but not
more than 60 days before the Redemption Date to each Holder of Securities to be
redeemed at such Holder's registered address. Securities in denominations
larger than $100 may be redeemed in part.
Except as set forth in the Indenture, from and after any
Redemption Date, if monies for the redemption of the Securities called for
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, the Securities called for redemption will cease to bear
interest (and cease to increase in their Accreted Value) and the only right of
the Holders of such Securities will be to receive payment of the Redemption
Price.
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7. Change of Control Offer.
Upon the occurrence of a Change of Control, each Holder shall
have the right to require the repurchase of such Holder's Securities pursuant to
a Change of Control Offer at a purchase price equal to 101% of Accreted Value.
8. Excess Cash Offer.
Under certain circumstances the Company is required to offer
to purchase in an Excess Cash Offer (at a price equal to 100% of Accreted Value)
such aggregate Accreted Value which shall be equal to the Accumulated Amount
required to be applied in such Excess Cash Offer.
9. Denominations; Transfer; Exchange.
The Securities are in registered form, without coupons, in
denominations of $1,000,000 and integral multiples of $100. A Holder shall
register the transfer of or exchange Securities in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay certain transfer
taxes or similar governmental charges payable in connection therewith as
permitted by the Indenture. The Registrar need not register the transfer of or
exchange any Securities or portions thereof selected for redemption.
By accepting the Series C Securities, the registered Holder
thereof agrees to comply with Section 2.17 of the Indenture and (i) to promptly
notify the Trustee in writing if the number of Beneficial Owners of such
Security changes at any time during the period that such registered Holder owns
such Security, and (ii) that it will not permit the Beneficial Owners of such
Security to be increased without the prior written consent of the Trustee. The
number of Beneficial Owners of the Securities is limited to 75.
10. Persons Deemed Owners.
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The registered Holder of a Security shall be treated as the
owner of it for all purposes.
11. Unclaimed Money.
If money for the payment of principal or interest remains
unclaimed for one year, the Trustee and the Paying Agents will pay the money
back to the Company at its request. After that, all liability of the Trustee and
such Paying Agents with respect to such money shall cease.
12. Discharge Prior to Redemption or Maturity.
If the Company at any time deposits with the Trustee U.S.
Legal Tender or U.S. Government Obligations sufficient to pay the principal of
and interest on the Securities to redemption or maturity and complies with the
other provisions of the Indenture relating thereto, the Company will be
discharged from certain provisions of the Indenture and the Securities.
13. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture or the Securities
may be amended or supplemented with the written consent of the Holders of at
least a majority in aggregate principal amount of the Securities then
outstanding, and any existing Default or Event of Default or compliance with any
provision may be waived with the consent of the Holders of a majority in
aggregate principal amount of the Securities then outstanding. Without notice to
or consent of any Holder, the parties thereto may amend or supplement the
Indenture or the Securities to, among other things, cure any ambiguity, defect
or inconsistency, provide for uncertificated Securities in addition to or in
place of certificated Securities, comply with Article 5 of the Indenture or
comply with any requirements of the SEC in connection with the qualification of
the Indenture under the TIA, or make any other change that does not adversely
affect the rights of any Holder of a Security. This Security amends and restates
in their entirety the Series A and Series B Securities issued pursuant to the
Indenture.
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14. Restrictive Covenants.
The Indenture imposes certain limitations on the ability of
the Company and its Subsidiaries to, among other things, incur additional
Indebtedness or Liens, make payments in respect of its Capital Stock and merge
or consolidate with any other Person. The limitations are subject to a number of
important qualifications and exceptions. The Company must annually report to the
Trustee on compliance with such limitations.
15. Successors.
When a successor assumes all the obligations of its
predecessor under the Securities and the Indenture, the predecessor will be
released from those obligations.
16. Defaults and Remedies.
If an Event of Default occurs and is continuing, the Trustee
or the Holders of at least 25% in aggregate principal amount of Securities then
outstanding may declare all the Securities to be due and payable immediately in
the manner and with the effect provided in the Indenture. Holders of Securities
may not enforce the Indenture or the Securities except as provided in the
Indenture. The Trustee is not obligated to enforce the Indenture or the
Securities unless it has received indemnity satisfactory to it. The Indenture
permits, subject to certain limitations therein provided, Holders of a majority
in aggregate principal amount of the Securities then outstanding to direct the
Trustee in its exercise of any trust or power. The Trustee may withhold from
Holders of Securities notice of any continuing Default or Event of Default
(except a Default in payment of principal or interest, including pursuant to a
Change of Control Offer or Excess Cash Offer) if it deter mines that withholding
notice is in their interest.
17. Trustee Dealings with Company.
The Trustee under the Indenture, in its individual or any
other capacity, may become the owner or pledgee of Securities and may otherwise
deal with the Company, its Subsidiaries or their respective Affiliates as if it
were not the
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Trustee.
18. Against Others.
No stockholder, director, officer, employee or incorporator,
as such, of the Company shall have any liability for any obligation of the
Company under the Securities or the Indenture or for any claim based on, in
respect of or by reason of, such obligations or their creation. Each Holder of a
Security by accepting a Security waives and releases all such liability. The
waiver and release are part of the consideration for the issuance of the
Securities.
19. Separate Corporate Identity.
Each Holder of a Security by accepting a Security acknowledges
(i) that the Company is a separate legal entity from ARG, (ii) that the Holder
is not relying on the credit of ARG in acquiring or holding the Security, but is
relying solely on the credit of the Company, whose sole business at the time of
the issuance of the Series C Securities is holding common stock of ARG, (iii)
that the Holder is not looking to or relying on the assets, income, or cash flow
of ARG as a source of payment of the Security, except as such assets, income or
cash flow is distributed to the Company in its capacity as a stockholder of ARG,
and (iv) that the Holder has not received or relied on any information or
representation that is contrary to the matters set forth above in this
paragraph.
20. Authentication.
This Security shall not be valid until the Trustee or
authenticating agent manually signs the certificate of authentication on this
Security.
21. Abbreviations and Defined Terms.
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Customary abbreviations may be used in the name of a Holder of
a Security or an assignee, such as: TEN COM (= tenants in common), TENENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
22. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Company will cause CUSIP numbers
to be printed on the Securities immediately prior to the qualification of the
Indenture under the TIA as a convenience to the Holders of the Securities. No
representation is made as to the accuracy of such numbers as printed on the
Securities and reliance may be placed only on the other identification numbers
printed hereon.
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The Company will furnish to any Holder of a Security upon
written request and without charge a copy of the Indenture. Requests may be made
to: American Restaurant Group Holdings, Inc., 000 Xxxxxxx Xxxxxx Xxxxx, Xxxxxxx
Xxxxx, Xxxxxxxxxx 00000, Attn.: Chief Financial Officer.
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ASSIGNMENT FORM
I or we assign and transfer this Security
to_______________________________________________________________
_________________________________________________________________
(Print or type name, address and zip code of assignee)
_________________________________________________________________
(Insert Social Security or other identifying number of assignee)
and irrevocably appoint _______________________________________ agent to
transfer this Security on the books of the Company. The agent may substitute
another to act for him.
Dated: Signed: ____________________
Signature Guarantee:
_______________________________
Participant in a recognized
Signature Guarantee Medallion
Program (or other signature
guarantor program reasonably
acceptable to the Trustee)
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ASSIGNMENT FORM
I or we assign and transfer this Security
to_______________________________________________________________
_________________________________________________________________
(Print or type name, address and zip code of assignee)
_________________________________________________________________
(Insert Social Security or other identifying number of assignee)
and irrevocably appoint _______________________________________ agent to
transfer this Security on the books of the Company. The agent may substitute
another to act for him.
Dated: Signed: ____________________
Signature Guarantee:
________________________________
Participant in a recognized
Signature Guarantee Medallion
Program (or other signature
guarantor program reasonably
acceptable to the Trustee)
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OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Security purchased by the Company
pursuant to Section 3.07 or 3.08 of the Indenture, check the box: [ ]
If you wish to have a portion of this Security purchased by
the Company pursuant to Section 3.07 or 3.08 of the Indenture, state the amount:
Dated: __________________ Signed: ____________________
(Sign exactly as
name appears on the
other side of this
Security)
Signature
Guarantee:__________________________________
Participant in a recognized Signature
Guarantee Medallion Program (or other
signature guarantor program reasonably
acceptable to the Trustee)
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