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Prepared by MERRILL CORPORATION

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Exhibit 10.33    
    

 
  2001 Sonic Corp. Directors' Stock Option Plan
  
    January 30, 2001    
  

I.    Purpose. The purposes of the Plan are to enable the Company to attract and retain the services of members of the Board and provide
them with increased motivation and incentive to exert their best efforts on behalf of the Company by enlarging their personal stake in the Company. 

II.    Definitions and Rules of Construction.

    A.    Definition. As used in the Plan, the following definitions apply to the terms indicated below: 

    "Administrator" means the individual or individuals to whom the committee delegates authority under the Plan in accordance with
Section IV.C. 

    "Beneficiary" means the person designated in writing by the Participant to exercise or to receive an Option in the event of the
Participant's death or, if no such person has been designated in writing by the Participant prior to the date of death, the Participant's estate. No Beneficiary designation under the Plan shall be
effective unless it is in writing and is received by the Company prior to the date of death of the applicable Participant. 

    "Board" means the Board of Directors of the Company. 

    "Change in Control" means the occurrence of any of the following: 

    (1)    any
"person" (as such term is used in sections 13(d) and 14(d) of the Securities Exchange Act of 1934 (the "Exchange Act"), an "Acquiring Person") becomes the
"beneficial owner" (as such term is defined in Rule 13d-3 promulgated under the Exchange Act, a "Beneficial Owner"), directly or indirectly, of securities of the Company
representing 25% or more of the combined voting power of the Company's then outstanding securities; 

    (2)    an
Acquiring Person becomes the Beneficial Owner, directly or indirectly, of securities of the Company representing 10% or more of the combined voting power of the
Company's then outstanding securities and, during the two-year period commencing at the time such Acquiring Person becomes the Beneficial Owner of such securities, individuals who at the
beginning of such period constitute the Board cease for any reason to constitute at least a majority thereof; 

    (3)    the
Company's shareholders approve an agreement to merge or consolidate the Company with another corporation (other than a corporation 50% or more of which is
controlled by, or is under common control with, the Company) and, during the period commencing six months before such approval and ending two years after such approval, individuals who at the
beginning of such period constitute the Board cease for any reason to constitute at least a majority thereof; and 

    (4)    during
any two year period, individuals who at the date on which the period commences constitute a majority of the Board cease to constitute a majority thereof as
a result of one or more contested elections for positions on such Board. 

    "Code" means the Internal Revenue Code of 1986, as amended from time to time. 

    "Committee" means the committee appointed by the Board from time to time to administer the Plan pursuant to Section IV hereof. 

    "Common Stock" means the common stock of the Company, par value $0.01 per share, now or hereafter owned by the Company as treasury
stock or authorized, but unissued, shares of the Company's common stock, subject to adjustment as provided in the Plan. 

    "Company" means Sonic Corp., a Delaware corporation. 

    "Exchange Act" means the Securities Exchange Act of 1934, as amended from time to time. 

    "Fair Market Value" of a Share on a given day means, if Shares are listed on an established stock exchange or exchanges, the highest
closing sales price of a Share as reported on such stock exchange; 

 

or if not so reported, the final price, as reported on the National Association of Securities Dealers Automated Quotation System, as determined by the Committee. If the price of a Share shall not be
so quoted the Fair Market Value shall be determined by the Committee taking into account all relevant facts and circumstances. 

    "Option" means a right to purchase Shares pursuant to an option that is not an incentive stock option within the meaning of
Section 422 of the Code under the terms and conditions of the Plan as evidenced by an Option Agreement in such form not inconsistent with the Plan, as the Committee may adopt for general use or
for specific cases from time to time. 

    "Option Agreement" means an instrument or agreement evidencing an Option granted hereunder, in written or electronic form, which may,
but need not be executed or acknowledged by the recipient thereof. 

    "Participant" means a director who is not an employee of the Company or a Subsidiary, eligible to participate in the Plan under
Section V hereof, to whom an Option is granted under the Plan. 

    "Plan" means the 2001 Sonic Corp. Directors' Stock Option Plan, including any amendments to the Plan. 

    "Securities Act" means the Securities Act of 1933, as amended from time to time. 

    "Share" or "Shares" means shares of the Company's Common Stock. 

    "Subsidiary" means any corporation, now or hereafter existent, in which the Company owns, directly or indirectly, stock comprising
fifty percent or more of the total combined voting power of all classes of stock of such corporation. 

    B.    Construction. As used herein, the masculine includes the feminine, the plural includes the singular, and the
singular includes the plural. 

III.    Plan Adoption and Term.

    A.    Adoption. The Plan shall become effective upon its adoption by the Board, and Options may be issued upon such
adoption and from time to time thereafter; provided, that the Plan shall be submitted to the Company's shareholders for their approval at the next
annual meeting of shareholders, and provided further, that the approval of the Company's shareholders shall be obtained within twelve months of the date
of adoption of the Plan. If the Plan is not approved at the annual meeting by the affirmative vote of a majority of all shares entitled to vote upon the matter, then the Plan and all Options then
outstanding hereunder shall forthwith automatically terminate and be of no force and effect. 

    B.    Term. Subject to the provisions hereinafter contained relating to amendment or discontinuance, the Plan shall
continue in effect for ten years from the date of its adoption by the Board. No Option may be granted hereunder after such ten-year period. 

IV.    Administration of the Plan.

    A.    Committee Members. The Plan shall be administered by the Committee, consisting of not less than three persons, who
shall be directors of the Company, and who shall be appointed by the Board to serve at the pleasure of the Board; provided,  however, that at least two of
such directors shall be non-employee directors as such term is defined in Rule 16b-3 of the
Exchange Act or any successor thereto. 

Committee
Authority. 

    B.    Committee Authority.

2

 

    (1)    General. Except as otherwise expressly provided in the Plan, the Committee shall have sole and final authority to interpret the provisions of the Plan and the
terms of any Option or Option Agreement issued under it and to promulgate and interpret such rules and regulations as it may deem necessary or desirable for the administration of the Plan. All
determinations by the Committee shall be final and binding on all persons having an interest in any Option under the Plan. The Committee shall report to the Board the names of those granted Options
and the terms and conditions of each Option granted by it. The Committee may correct any defect in the Plan or any Option in the manner and to the extent it shall deem expedient to carry the Plan into
effect and shall be the sole and final judge of such expediency. 

    (2)    Specific
Duties. The Committee shall have full power and authority: 

    (a) to
select Participants; 

    (b) to
grant Options in accordance with the Plan; 

    (c) to
determine the number of shares of Common Stock subject to each Option; 

    (d) to
determine the terms and conditions of each Option, including, without limitation, those related to vesting, forfeiture, payment and exercisability, and the
effect of a Participant's cessation of service with the Company; 

    (e) to
specify and approve the provisions of the Option Agreements delivered to Participants in connection with their Options; 

    (f)  to
construe and interpret any Option Agreement delivered under the Plan; 

    (g) to
amend the terms and conditions of an Option after the granting thereof or to authorize the grant of a new Option in substitution therefore;  provided that, no outstanding option will be "repriced" by
lowering the exercise price, or by cancellation of outstanding options with subsequent
replacement, or regrant of options with lower exercise prices; provided further that, any amendment is in a manner that is not, without the consent of
the Participant, prejudicial to the rights of such Participant in such Option; 

    (h) to
prescribe, amend and rescind rules and procedures relating to the Plan; 

    (i)  subject
to the provisions of the Plan and subject to such additional limitations and restrictions as the Committee may impose, to delegate to one or more officers
of the Company some or all of its authority under the Plan; 

    (j)  to
employ such legal counsel, independent auditors and consultants as it deems desirable for the administration of the Plan and to rely upon any opinion or
computation received therefrom; and 

    (k) to
make all other determinations and to formulate such procedures as may be necessary or advisable for the administration of the Plan. 

    C.    Delegation of Authority. The Committee may, but need not, from time to time delegate some or all of its authority
under the Plan to an Administrator consisting of one or more officers of the Company, one or more members of the Committee or one or more members of the Board;  provided, however, that the Committee may not delegate its responsibility (i) to grant Options to
individuals who are subject to Section 16 of the Exchange Act, (ii) or to amend or terminate the Plan in accordance with Section XIV. Any delegation hereunder shall be subject to
the restrictions and limits that the Committee specifies at the time of such delegation or thereafter. Nothing in the Plan shall be construed as obligating the Committee to delegate authority to an
Administrator, and the Committee may at any time rescind the authority delegated to an Administrator appointed hereunder or appoint a new Administrator. At all times, the Administrator appointed under
this Section IV.C. shall serve in 

3

 

such capacity at the pleasure of the Committee. Any action undertaken by the Administrator in accordance with the Committee's delegation of authority shall have the same force and effect as if
undertaken directly by the Committee, and any reference in the Plan to the Committee shall, to the extent consistent with the terms and limitations of such delegation, be deemed to include a reference
to the Administrator. 

    D.    Committee Indemnification. No member of the Committee shall be liable for any action taken or omitted or any
determination made by him in good faith relating to the Plan, and the Company shall indemnify and hold harmless each member of the Committee and each other director or employee of the Company to whom
any duty or power relating to the administration or interpretation of the Plan has been delegated against any cost or expense (including counsel fees) or liability (including any sum paid in
settlement of a claim with the approval of the Committee) arising out of any act or omission in connection with the Plan, unless arising out of such person's own fraud or bad faith. 

V.    Eligibility. Each director of the Company, who is not an employee of the Company or any of its Subsidiaries, in office as of the
effective date of the Plan or as of any date thereafter (prior to the expiration or termination of the Plan), shall be eligible to participate in the Plan. 

VI.    Stock Subject to the Plan. Subject to adjustment as provided in Section XI hereof, Options may be issued pursuant to the Plan
with respect to a number of Shares that, in the aggregate, does not exceed 300,000 shares. If, prior to the termination of the Plan, an Option shall expire or terminate for any reason without having
been exercised in full, the unpurchased Shares subject thereto shall again be available for the purposes of the Plan. 

VII.    Options.

    A.    Terms and Conditions. The terms and conditions of each Option shall be set forth in applicable Option Agreement and
are described as follows: 

    B.    Amount of Options. Each Participant shall be granted an Option to purchase 15,000 Shares upon the Participant's
initial election to the Board. Beginning with the first year of the Participant's second three-year term on the Board and continuing for each additional year of service by the Participant
on the Board, the Participant will be granted an Option to purchase an additional 2,000 shares. 

    C.    Grant Date. The Options shall be granted each year on the date of the annual meeting of shareholders of the Company
(the "Date of Grant"). 

    D.    Option Price. The price per share at which Shares may be purchased pursuant to any Option granted under the Plan
shall be the Fair Market Value of a Share on the Date of Grant of the Option. 

    E.    Duration of Options. No Option granted hereunder shall be exercisable after the expiration of ten years from the
Date of Grant; provided, however, that all Options shall be subject to earlier termination as provided
elsewhere in the Plan. 

    F.    Conditions Relating to Exercise of Options.

    (1)    Exercise.
(a) The following percentage of Options (rounded up to the nearest whole number of Options) granted to Participants shall become exercisable on
the following anniversaries of the Date of Grant: 

	Anniversary of

Date of Grant
	 	Percentage

	First	 	331/3
	Second	 	331/3
	Third	 	331/3

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    (b) Once
exercisable, an Option may be exercised at any time prior to its expiration, cancellation or termination as provided in the Plan. Partial exercise is permitted
from time to time, provided that no partial exercise of an Option shall be for a number of Shares having a purchase price of less than $1,000 or for a fractional number of Shares. 

    (2)    Notice.
An Option shall be exercised by the delivery to the Company of a written notice signed by the Participant, which specifies the number of Shares with
respect to which the Option is being exercised and the date of the proposed exercise. Such notice shall be delivered to the Company's principal office, to the attention of its Secretary, no less than
three business days in advance of the date of the proposed exercise and shall be accompanied by the applicable option certificate evidencing the Option. A Participant may withdraw such notice at any
time prior to the close of business on the proposed date of exercise, in which case the option certificate evidencing the Option shall be returned to him. 

    (3)    Payment.
Payment for Shares purchased upon exercise of an Option shall be made at the time of exercise either (a) in cash, (b) by certified check or
bank cashier's check, (c) in Shares owned by the Participant and valued at their Fair Market Value on the date of exercise provided such Shares have been held for at least six months by the
Participant, (d) partly in Shares with the balance in cash or by certified check or bank cashier's check, (e) pursuant to a broker-assisted "cashless exercise" arrangement, or
(f) by any combination of the foregoing, in each such case to the extent permitted by applicable law. Any payment in Shares shall be effected by their delivery to the Secretary of the Company,
endorsed in blank or accompanied by stock powers executed in blank. 

    (4)    Certificates.
Certificates for Shares purchased upon exercise of Options shall be issued and delivered as soon as practicable following the date the Option is
exercised. Certificates for Shares purchased upon exercise of Options shall be issued in the name of the Participant. 

    (5)    Buyout.
The Committee may at any time offer to buy out, for a payment in cash or Common Stock, an Option previously granted, based on such terms and conditions as
the Committee shall establish and communicate to the Participant at the time that such offer is made. 

    G.    Termination of Service.

    (1)    Retirement.
In the event that a Participant shall cease to be a director by reason of such Participant's retirement, any outstanding Option held by such
Participant shall be or immediately become fully exercisable as to the total number of Shares subject thereto (whether or not exercisable to that extent prior to such date) and shall remain so
exercisable but only for a period of three months after commencement of such retirement, at the end of which time it shall terminate (unless such Option expires earlier by its terms). 

    (2)    Disability.
In the event that a Participant shall cease to be a director by reason of such Participant's disability within the meaning of Section 22(e)(3)
of the Code, any outstanding Option held by such Participant shall be or immediately become fully exercisable as to the total number of Shares subject thereto (whether or not exercisable to that
extent prior to such date) and shall remain so exercisable but only for a period of one year after such date, at the end of which time it shall terminate (unless such Option expires earlier by its
terms). 

    (3)    Death.
In the event that a Participant shall cease to be a director by reason of death (including death during an approved leave of absence or following a
Participant's retirement or disability), any Option then held by such Participant which shall not have lapsed or terminated prior to his death shall be or immediately become fully exercisable by the
Beneficiary of the Participant, as may be appropriate, as to the total number of Shares subject thereto (whether or not exercisable to that extent at the time of death) and shall remain so exercisable
but only for a period of one year after death, at the end of which time it shall terminate (unless such Option expires earlier by its terms). 

5

 

    (4)    Other Reasons. In the event that a Participant shall cease to be a director otherwise than as described in Sections VII.G (1), (2) and (3), any outstanding
Option held by such Participant may be exercised during the thirty day period following the date of cessation of service to the extent such Option was vested and not already exercised as of the date
of such cessation of service. 

VIII.    No Election Rights. Nothing contained in the Plan or any Option shall confer upon any Participant any right with respect to the
continuation of his tenure as a director of the Company or interfere in any way with the right of the Company's shareholders or the Board, at any time, to terminate such tenure or to fail to elect
such Participant to the Board. 

IX.    Rights of a Shareowner and Nontransferability.

    A.    No Rights. No person shall have any rights with respect to any Shares covered by or relating to any grant hereunder
of an Option until the date a certificate is issued to him evidencing such Shares. Except as otherwise expressly provided in the Plan, no adjustment to any Option shall be made for dividends or other
rights for which the record date occurs prior to the date such certificate is issued. 

    B.    Nontransferability. Unless the Committee determines otherwise, no Option or amount payable under, or interest in,
the Plan shall be transferable by a Participant except by will or the laws of descent and distribution or otherwise be subject in any manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance or charge; provided, however, that the Committee may, in its discretion and subject
to such terms and conditions as it shall specify, permit the transfer of an Option for no consideration to a Participant's family members or to one or more trusts or partnerships established in whole
or in part for the benefit of one or more of such family members (collectively, "Permitted Transferees"); and provided further that this sentence shall
not preclude a Participant from designating a Beneficiary to receive the Participant's outstanding Option following the death of the Participant. Any Option transferred to a Permitted Transferee shall
be further transferable only by will or the laws of descent and distribution or, for no consideration, to another Permitted Transferee of the Participant. During the lifetime of the Participant, an
Option shall be exercisable only by the Participant or by a Permitted Transferee to whom such Option has been transferred in accordance with this Section IX.B. 

X.    Registration. Notwithstanding any other provision in the Plan, no Option may be exercised unless and until the Shares to be issued
upon the exercise thereof have been registered under the Securities Act and applicable state securities laws, or are, in the opinion of counsel to the Company, exempt from such registration. Prior to
the occurrence of a Change in Control, the Company shall not be under any obligation to register under applicable federal or state securities laws any Shares to be issued upon the exercise of an
Option granted hereunder, or to comply with an appropriate exemption from registration under such laws in order to permit the exercise of an Option and the issuance and sale of the Shares subject to
such Option. If the Company chooses to comply with such an exemption from registration, the Shares issued under the Plan may, at the direction of the Committee, bear an appropriate restrictive legend
restricting the transfer or pledge of the Shares represented thereby, and the Committee may also give appropriate stop-transfer instructions to the transfer agent to the Company. On or
after the occurrence of a Change in Control, the Company shall be under an obligation to register under applicable federal or state securities law any Shares to be issued upon the exercise of an
Option granted hereunder, or to comply with an appropriate exemption from registration under rules and regulations promulgated by the Securities and Exchange Commission in order to permit the exercise
of an Option and the issuance and sale of the Shares subject to such Option. 

XI.    Adjustment Upon Changes in Capital Stock. Notwithstanding any other provisions of the Plan, unless the Committee determines
otherwise in its sole discretion, the number and class of Shares available under the Plan or any outstanding Options shall be adjusted as necessary to prevent dilution or enlargement of rights,
including adjustments in the event of changes in the number of shares of 

6

 

outstanding Common Stock by reason of stock dividends, split-ups, recapitalizations, mergers, consolidations, combinations or exchanges of shares, separations, reorganizations,
liquidations or any similar corporate action or proceeding. 

XII.    Change in Control. Notwithstanding anything in the Plan to the contrary, upon the occurrence of a Change in Control, any Option
granted under the Plan and outstanding at such time shall become 100% vested and immediately exercisable for Common Stock in the case of Options effective as of the date of such Change in Control.
Should the Options be assumed by the surviving or acquiring corporation at the time of the Change in Control, such Options shall continue to be exercisable following the Change in Control until their
expiration or termination as provided in the Plan, with such adjustments to exercise price and number and kind of securities as the Committee shall equitably determine to preserve the value of such
Options. Alternatively, in the event of a Change in Control, the Committee in its discretion may provide that all Options shall be cashed out at their Fair Market Value, as determined above. 

XIII.    Withholding Taxes.

    A.    Withholding Generally. The Company shall have the right to withhold or require the recipient to remit to the Company
an amount sufficient to satisfy federal, state, or local withholding tax requirements arising in connection with the grant, exercise or settlement of any Option under the Plan prior to the delivery of
any certificate or certificates for Shares or other amounts hereunder. 

    B.    Stock Withholding. When a Participant incurs tax liability in connection with the exercise or vesting of any Option,
which tax liability is subject to tax withholding under applicable tax laws, the withholding tax obligation shall be satisfied, at the discretion of the Company, by the withholding of cash or the
withholding from the Shares otherwise to be delivered, of the number of Shares having a Fair Market Value equal to the amount required to be withheld under applicable law, determined on the date that
the amount of tax to be withheld is to be determined; provided, however, that the Company shall not
withhold Shares (1) upon exercise or vesting of any Option in an amount which exceeds the minimum statutory withholding rates for federal, state and local tax purposes, including payroll taxes
or (2) if such withholding is not permitted under local laws. All elections by a Participant to have Shares withheld for this purpose shall be made in accordance with procedures established by
the Committee from time to time. 

XIV.    Amendment of the Plan.

    A.    General Rule. Subject to any approval of the shareholders of the Company that may be required (or, in the opinion of
the Committee, appropriate) under law, the Committee may at any time amend, suspend or terminate the Plan. No amendment, suspension or termination of the Plan shall materially and adversely alter or
impair the rights of a Participant in any Option previously made under the Plan without the consent of the holder thereof. 

    B.    Shareholder Approval Required. No amendment to or modification of the Plan which: (i) materially increases
the benefits accruing to Participants except as provided in Section XII hereof, (ii) increases the number of Shares that may be issued under the Plan, except for events described in
Section XI; or (iii) modifies the requirements as to eligibility for participation under the Plan, shall be effective without shareholder approval. 

XV.    General Provisions.

    A.    No Entitlements. It is expressly understood that the Plan grants powers to the Committee but does not require their
exercise; nor shall any person, by reason of the adoption of the Plan, be deemed to be entitled to the grant of any Option; nor shall any rights be deemed to accrue under the Plan except as Options
may be granted hereunder. 

7

 

    B.    Compliance with Law. Any person exercising an Option or transferring or receiving Shares shall comply with all
regulations and requirements of any governmental authority having jurisdiction over the issuance, transfer, or sale of capital stock of the Company, and as a condition to receiving any Shares, shall
execute all such instruments as the Company in its sole discretion may deem necessary or advisable. 

    C.    Governing Law. All rights hereunder shall be governed by and construed in accordance with the laws of Oklahoma. 

    D.    Expenses. All expenses of the Plan, including the cost of maintaining records, shall be borne by the Company. 

    E.    Notices. Notices required or permitted to be made under the Plan shall be sufficiently made if sent by registered or
certified mail addressed (a) to the Participant at the Participant's address as set forth in the books and records of the Company or (b) to the Company or the Committee at the principal
office of the Company. 

    F.    Consent to Plan. By accepting any Option or other benefit under the Plan, each Participant and each person claiming
under or through him shall be conclusively deemed to have indicated his acceptance and ratification of, and consent to, any action taken under the Plan by the Company, the Board or the Committee. 

8

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Exhibit 10.33

2001 Sonic Corp. Directors' Stock Option Plan January 30, 2001Prepared by MERRILL CORPORATION

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 TABLE OF CONTENTS 4

 
 

Exhibit 10.34    
    

SONIC CORP.

$5,000,000
6.58% Senior Notes, Series A, due August 10, 2008 

and

$25,000,000
6.87% Senior Notes, Series B, due August 10, 2011 

NOTE
PURCHASE AGREEMENT 

Dated
as of August 10, 2001 

   TABLE OF CONTENTS

(Not
a part of the Agreement) 

 

	Section
	 	Heading

	SECTION 1.	 	AUTHORIZATION OF NOTES
	
SECTION 2.	
 	

SALE AND PURCHASE OF NOTES
	
SECTION 3.	
 	

CLOSING
	
SECTION 4.	
 	

CONDITIONS TO CLOSING
	 	

Section 4.1.	
 	

Representations and Warranties
	 	Section 4.2.	 	Performance; No Default
	 	Section 4.3.	 	Compliance Certificates
	 	Section 4.4.	 	Opinions of Counsel
	 	Section 4.5.	 	Purchase Permitted By Applicable Law, Etc.
	 	Section 4.6.	 	Sale of Other Notes
	 	Section 4.7.	 	Payment of Special Counsel Fees
	 	Section 4.8.	 	Private Placement Number
	 	Section 4.9.	 	Changes in Corporate Structure
	 	Section 4.10.	 	Guaranty Agreements
	 	Section 4.11.	 	Intercreditor Agreement
	 	Section 4.12.	 	Contribution and Indemnification Agreement
	 	Section 4.13.	 	Bank Loan Agreement; 1998 Note Agreements
	 	Section 4.14.	 	Proceedings and Documents
	
SECTION 5.	
 	

REPRESENTATIONS AND WARRANTIES OF THE COMPANY
	 	

Section 5.1.	
 	

Organization; Power and Authority
	 	Section 5.2.	 	Authorization, Etc.
	 	Section 5.3.	 	Disclosure
	 	Section 5.4.	 	Organization and Ownership of Equity Interests of Subsidiaries; Affiliates
	 	Section 5.5.	 	Financial Statements
	 	Section 5.6.	 	Compliance with Laws, Other Instruments, Etc.
	 	Section 5.7.	 	Governmental Authorizations, Etc.
	 	Section 5.8.	 	Litigation; Observance of Agreements, Statutes and Orders
	 	Section 5.9.	 	Taxes
	 	Section 5.10.	 	Title to Property; Leases
	 	Section 5.11.	 	Licenses, Permits, Etc.
	 	Section 5.12.	 	Compliance with ERISA
	 	Section 5.13.	 	Private Offering by the Company
	 	Section 5.14.	 	Use of Proceeds; Margin Regulations
	 	Section 5.15.	 	Existing Debt; Future Liens
	 	Section 5.16.	 	Foreign Assets Control Regulations, Etc.
	 	Section 5.17.	 	Status under Certain Statutes
	 	Section 5.18.	 	Environmental Matters
	
SECTION 6.	
 	

REPRESENTATIONS OF THE PURCHASER
	 	

Section 6.1.	
 	

Purchase for Investment
	 	Section 6.2.	 	Source of Funds

i

 

	
SECTION 7.	
 	

INFORMATION AS TO COMPANY
	 	

Section 7.1.	
 	

Financial and Business Information
	 	Section 7.2.	 	Officer's Certificate
	 	Section 7.3.	 	Inspection
	
SECTION 8.	
 	

PREPAYMENT OF THE NOTES
	 	

Section 8.1.	
 	

Required Prepayments
	 	Section 8.2.	 	Optional Prepayments with Make-Whole Amount
	 	Section 8.3.	 	Allocation of Partial Prepayments
	 	Section 8.4.	 	Maturity; Surrender, Etc.
	 	Section 8.5.	 	Purchase of Notes
	 	Section 8.6.	 	Make-Whole Amount
	
SECTION 9.	
 	

AFFIRMATIVE COVENANTS
	 	

Section 9.1.	
 	

Compliance with Law
	 	Section 9.2.	 	Insurance
	 	Section 9.3.	 	Maintenance of Properties
	 	Section 9.4.	 	Payment of Taxes and Claims
	 	Section 9.5.	 	Corporate Existence, Etc.
	 	Section 9.6.	 	Guaranty Agreements
	
SECTION 10.	
 	

NEGATIVE COVENANTS
	 	

Section 10.1.	
 	

Consolidated Net Worth
	 	Section 10.2.	 	Consolidated Debt
	 	Section 10.3.	 	Priority Debt
	 	Section 10.4.	 	Fixed Charges Coverage Ratio
	 	Section 10.5.	 	Restricted Payments and Restricted Investments
	 	Section 10.6.	 	Liens
	 	Section 10.7.	 	Sale of Assets
	 	Section 10.8.	 	Merger, Consolidation, Etc.
	 	Section 10.9.	 	Restrictions on Dividends of Restricted Subsidiaries
	 	Section 10.10.	 	Line of Business
	 	Section 10.11.	 	Transactions with Affiliates
	 	Section 10.12.	 	Changes in Status of Subsidiaries
	
SECTION 11.	
 	

EVENTS OF DEFAULT
	
SECTION 12.	
 	

REMEDIES ON DEFAULT, ETC.
	 	

Section 12.1.	
 	

Acceleration
	 	Section 12.2.	 	Other Remedies
	 	Section 12.3.	 	Rescission
	 	Section 12.4.	 	No Waivers or Election of Remedies, Expenses, Etc.
	
SECTION 13.	
 	

REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES
	 	

Section 13.1.	
 	

Registration of Notes
	 	Section 13.2.	 	Transfer and Exchange of Notes
	 	Section 13.3.	 	Replacement of Notes
	
SECTION 14.	
 	

PAYMENTS ON NOTES
	 	

Section 14.1.	
 	

Place of Payment

ii

 

	 	Section 14.2.	 	Home Office Payment
	
SECTION 15.	
 	

EXPENSES, ETC.
	 	

Section 15.1.	
 	

Transaction Expenses
	 	Section 15.2.	 	Survival
	
SECTION 16.	
 	

SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT
	
SECTION 17.	
 	

AMENDMENT AND WAIVER
	 	

Section 17.1.	
 	

Requirements
	 	Section 17.2.	 	Solicitation of Holders of Notes
	 	Section 17.3.	 	Binding Effect, Etc.
	 	Section 17.4.	 	Notes held by Company, Etc.
	
SECTION 18.	
 	

NOTICES
	
SECTION 19.	
 	

REPRODUCTION OF DOCUMENTS
	
SECTION 20.	
 	

CONFIDENTIAL INFORMATION
	
SECTION 21.	
 	

SUBSTITUTION OF PURCHASER
	
SECTION 22.	
 	

MISCELLANEOUS
	 	

Section 22.1.	
 	

Successors and Assigns
	 	Section 22.2.	 	Payments Due on Non-Business Days
	 	Section 22.3.	 	Severability
	 	Section 22.4.	 	Construction
	 	Section 22.5.	 	Counterparts
	 	Section 22.6.	 	GOVERNING LAW
	

Signature	
 	

 

iii

 

ATTACHMENTS TO NOTE PURCHASE AGREEMENT:

	SCHEDULE A	 	—    Information Relating To Purchasers
	
SCHEDULE B	
 	

—    Defined Terms
	
SCHEDULE C	
 	

—    Existing Investments
	
SCHEDULE 4.9	
 	

—    Changes in Corporate Structure
	
SCHEDULE 5.3	
 	

—    Disclosure Materials
	
SCHEDULE 5.4	
 	

—    Subsidiaries of the Company and Ownership of Subsidiary Stock
	
SCHEDULE 5.5	
 	

—    Financial Statements
	
SCHEDULE 5.8	
 	

—    Certain Litigation
	
SCHEDULE 5.11	
 	

—    Patents, Etc.
	
SCHEDULE 5.14	
 	

—    Use of Proceeds
	
SCHEDULE 5.15	
 	

—    Existing Debt
	
EXHIBIT 1-A	
 	

—    Form of 6.58% Senior Note, Series A, due August 10, 2008
	
EXHIBIT 1-B	
 	

—    Form of 6.87% Senior Note, Series B, due August 10, 2011
	
EXHIBIT 2-A	
 	

—    Form of Guaranty Agreement (Guarantors other than Partnerships

        and Limited Liability Companies)
	
EXHIBIT 2-B	
 	

—    Form of Guaranty Agreement (Partnerships)
	
EXHIBIT 2-C	
 	

—    Form of Guaranty Agreement (Limited Liability Companies)
	
EXHIBIT 3	
 	

—    Form of Intercreditor Agreement
	

EXHIBIT 4.4(a)	
 	

—    Form of Opinion of Special Counsel for the Company
	

EXHIBIT 4.4(b)	
 	

—    Form of Opinion of Special Counsel for the Guarantors
	

EXHIBIT 4.4(c)	
 	

—    Form of Opinion of Special Counsel for the Purchasers

iv

 
 

SONIC CORP.
  101 Park Avenue
  Oklahoma City, Oklahoma 73102    
  

    6.58%
Senior Notes, Series A, due August 10, 2008

and

6.87% Senior Notes, Series B, due August 10, 2011 

    Dated
as of August 10, 2001 

TO
THE PURCHASER LISTED IN

THE ATTACHED SCHEDULE A WHO

IS A SIGNATORY TO THIS AGREEMENT: 

    Ladies
and Gentlemen: 

SONIC
CORP., a Delaware corporation (the "Company"), agrees with you as follows: 

 
 
 

   SECTION 1.  AUTHORIZATION OF NOTES.   

    The
Company will authorize the issue and sale of $5,000,000 aggregate principal amount of its 6.58% Senior Notes, Series A, due August 10, 2008 (the  "Series A Notes," such term to include any
such notes of such series issued in substitution therefor pursuant to Section 13 of this
Agreement or the Other
Agreements (as hereinafter defined)) and $25,000,000 aggregate principal amount of its 6.87% Senior Notes, Series B, due August 10, 2011 (the "Series B
Notes," such term to include any such notes of such series issued in substitution therefor pursuant to Section 13 of this Agreement or the Other Agreements; the
Series A Notes and Series B Notes are hereinafter collectively referred to as the "Notes"). The Series A Notes shall be
substantially in the form set out in Exhibit 1-A, and the Series B Notes shall be substantially in the form set out in Exhibit 1-B, in each case, with such
changes therefrom, if any, as may be approved by you and the Company. 

    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. 

 
 
 

   SECTION 2.  SALE AND PURCHASE OF NOTES.   

    (a)
Subject to the terms and conditions of this Agreement, the Company will issue and sell to you and you will purchase from the Company, at the Closing provided for in
Section 3, Notes in the principal amount and of the series specified opposite your name in Schedule A at the purchase price of 100% of the principal amount thereof. Contemporaneously
with entering into this Agreement, the Company is entering into separate Note Purchase Agreements (the "Other Agreements") identical with this Agreement
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 and of the series 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 nonperformance by any Other
Purchaser thereunder. 

    (b) Pursuant
to the Guaranty Agreements entered into on the date of the Closing (as hereinafter defined) in accordance with Section 9.6, each Subsidiary will
guarantee the prompt payment, when due, by acceleration or otherwise, of the principal, interest and Make-Whole Amount, if any, payable by the Company with respect to any Note or Notes
issued by the Company pursuant to this Agreement or the Other Agreements, and the prompt performance and payment of all other indebtedness, indemnities, covenants, obligations and liabilities of the
Company under this Agreement and the Other Agreements. 

    (c) You,
the Other Purchasers, the 1998 Noteholders and each Bank will enter into an Amended and Restated Intercreditor Agreement dated as of August 10, 2001
(the "Intercreditor Agreement") providing for the sharing of proceeds received (i) by you and the Other Purchasers under the Guaranty 

 

Agreements, (ii) by the 1998 Noteholders, under the guaranties entered into by the Subsidiaries pursuant to the 1998 Note Agreements in favor of the 1998 Noteholders and (iii) by the
Banks under the guaranties entered into by the Subsidiaries pursuant to the Bank Loan Agreement in favor of the Banks. The Intercreditor Agreement will be in the form attached hereto as
Exhibit 3. 

 
 
 

   SECTION 3.  CLOSING.   

    The
sale and purchase of the Notes to be purchased by you and the Other Purchasers shall occur at the offices of Chapman and Cutler, 111 West Monroe Street, Chicago, Illinois 60603,
at 10:00 a.m. Chicago time, at a closing on August 10, 2001 (the "Closing") or on such other Business Day thereafter as may be agreed upon
by you, the Company and the other Purchasers. At the Closing, the Company will deliver to you the Notes of each series to be purchased by you in the form of a single Note of such series (or such
greater number of Notes in denominations of at least $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 for the account of the Company to account number
08805173398 at Chase Bank of Texas, National Association (ABA #113000609), Houston, Texas. 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. 

 
 
 

   SECTION 4.  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: 

 
 

    Section 4.1.    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. 

 
 

    Section 4.2.    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 as contemplated by Schedule 5.14), no Default or Event of
Default shall have occurred and be continuing. Neither the
Company nor any Restricted Subsidiary shall have entered into any transaction since the date of the Memorandum that would have been prohibited by Sections 10.1, 10.2, 10.3, 10.4, 10.5, 10.6, 10.7,
10.8, 10.9, 10.10 or 10.11 hereof had such Sections applied since such date. 

 
 

    Section 4.3.    Compliance Certificates.   

    (a) Company 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) Company Secretary's Certificate. The Company shall have delivered to you a certificate certifying as to the
resolutions attached thereto and other corporate proceedings relating to the authorization, execution and delivery of the Notes, this Agreement and the Other Agreements. 

    (c) Guarantor Officer's Certificate. Each Guarantor (other than the Partnerships and Limited Liability Companies) shall
have delivered to you an Officer's Certificate, dated the date of the Closing, certifying that the representations and warranties of such Guarantor contained in the Guaranty Agreement to which it is a
party are true and correct at the time of the Closing. 

    (d) Guarantor Secretary's Certificate. Each Guarantor (other than the Partnerships and Limited Liability Companies)
shall have delivered to you a certificate certifying as to the resolutions attached 

2

 

thereto and other corporate proceedings relating to the authorization, execution and delivery of the Guaranty Agreement to which it is a party. 

    (e) Partnership Certificate. Sonic Restaurants, Inc., an Oklahoma corporation ("Sonic
Restaurants"), shall have delivered to you an Officer's Certificate certifying that (i) each of the Partnerships has been duly formed and is validly existing,
(ii) each of the Partnerships has the power and authority to execute, deliver and perform the Guaranty Agreement to which it is a party, and (iii) Sonic Restaurants has the power and
authority to execute and deliver such Guaranty Agreement on behalf of each of the Partnerships, as the managing general partner of each of the Partnerships, and to thereby bind the Partnerships. 

    (f)  Limited Liability Company Certificate. Sonic Restaurants shall have delivered to you an Officer's Certificate
certifying that (i) each of the Limited Liability Companies has been duly formed and is
validly existing, (ii) each of the Limited Liability Companies has the power and authority to execute, deliver and perform the Guaranty Agreement to which it is a party, and (iii) Sonic
Restaurants has the power and authority to execute and deliver such Guaranty Agreement on behalf of each of the Limited Liability Companies, as the managing member of each of the Limited Liability
Companies, and to thereby bind the Limited Liability Companies. 

    (g) ERISA Certificate. If you shall have made the disclosures referred to in Section 6.2(b), (c) or (e),
you shall have received the certificate from the Company described in the penultimate paragraph of Section 6.2 and such certificate shall state that (i) the Company is neither a "party
in interest" nor a "disqualified person" (as defined in Section 4975(e)(2) of the Code), with respect to any plan identified pursuant to Section 6.2(b) or (e) or (ii) with
respect to any plan, identified pursuant to Section 6.2(c), neither the Company nor any "affiliate" (as defined in Section V(c) of the QPAM Exemption) has, at such time or during the
immediately preceding one year, exercised the authority to appoint or terminate the QPAM as manager of the assets of any plan identified in writing pursuant to Section 6.2(c) or to negotiate
the terms of said QPAM's management agreement on behalf of any such identified plans. 

 
 

    Section 4.4.    Opinions of Counsel.   You shall have received opinions in form and substance satisfactory to you, dated the date of the
Closing (a) from Phillips McFall McCaffrey
McVay & Murrah, P.C., counsel for the Company, covering the matters set forth in Exhibit 4.4(a) and covering such other matters incident to the transactions contemplated hereby as you or
your counsel may reasonably request (and the Company hereby instructs its counsel to deliver such opinion to you), (b) from special counsel for each Guarantor, covering the matters set forth in
Exhibit 4.4(b) and covering such other matters incident to the transactions contemplated hereby as you or your counsel may reasonably request (and the Company hereby instructs such counsel to
deliver such opinion to you) and (c) from Chapman and Cutler, your special counsel in connection with such transactions, substantially in the form set forth in Exhibit 4.4(c) and
covering such other matters incident to such transactions as you may reasonably request. 

 
 

    Section 4.5.    Purchase Permitted By Applicable Law, Etc.   On the date of the Closing, your purchase of Notes shall (a) be permitted
by the laws and regulations of each jurisdiction to which you are subject,
without recourse to provisions (such as Section 1405(a)(8) of the New York Insurance Law) permitting limited investments by insurance companies without restriction as to the character of the
particular investment, (b) not violate any applicable law or regulation (including, without limitation, Regulation 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. 

3

 

 
 

    Section 4.6.    Sale of Other Notes.   Contemporaneously with the Closing, 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. 

 
 

    Section 4.7.    Payment of Special Counsel Fees.   Without limiting the provisions of Section 15.1, the Company shall have paid on or
before the Closing the fees, charges and disbursements of your
special counsel referred to in Section 4.4 to the extent reflected in a statement of such counsel rendered to the Company at least one Business Day prior to the Closing. 

 
 

    Section 4.8.    Private Placement Number.   A Private Placement number issued by Standard & Poor's CUSIP Service Bureau (in
cooperation with the Securities Valuation Office of the National
Association of Insurance Commissioners) shall have been obtained for each series of the Notes. 

 
 

    Section 4.9.    Changes in Corporate Structure.   Except as specified in Schedule 4.9, 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. 

 
 

    Section 4.10.    Guaranty Agreements.   You shall have received each Guaranty Agreement duly executed and delivered by the Guarantors
thereto. 

 
 

    Section 4.11.    Intercreditor Agreement.   You shall have received the Intercreditor Agreement duly executed and delivered by the parties
thereto. 

 
 

    Section 4.12.    Contribution and Indemnification Agreement.   You shall have received a copy of the Contribution and Indemnification
Agreement, certified as true and correct by an appropriate officer of the Company, which
Contribution and Indemnification Agreement shall be in full force and effect on the date of the Closing. 

 
 

    Section 4.13.    Bank Loan Agreement; 1998 Note Agreements.   You shall have received a copy of the Bank Loan Agreement and of the 1998 Note
Agreements, certified as true and correct by an appropriate officer of the
Company, which Bank Loan Agreement and 1998 Note Agreements shall be in full force and effect on the date of the Closing. 

 
 

    Section 4.14.    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. 

 
 
 

   SECTION 5.  REPRESENTATIONS AND WARRANTIES OF THE COMPANY.   

    The
Company represents and warrants to you that: 

 
 

    Section 5.1.    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. 

4

 

 
 

    Section 5.2.    Authorization, Etc.   This Agreement, 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). 

 
 

    Section 5.3.    Disclosure.   The Company, through its agent, Banc of America Securities LLC, has delivered to you and each Other Purchaser
a copy of a Private Placement Memorandum, dated
July, 2001 (the "Memorandum"), relating to the transactions contemplated hereby. The Memorandum fairly describes, in all material respects, the general
nature of the business and principal properties of the Company and its Subsidiaries. Except as disclosed in Schedule 5.3, this Agreement, the Memorandum, the documents,
certificates or other writings delivered to you by or on behalf of the Company in connection with the transactions contemplated hereby 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. Except as disclosed in the Memorandum or as expressly described in Schedule 5.3, or in one of the documents, certificates or other writings identified therein, or in the
financial statements listed in Schedule 5.5, since August 31, 2000, there has been no change in the financial condition, operations, business, properties or prospects of the Company or
any Subsidiary except 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 Memorandum or in the other documents, certificates and other writings delivered to you by or on behalf of the
Company specifically for use in connection with the transactions contemplated hereby. 

 
 

    Section 5.4.    Organization and Ownership of Equity Interests of Subsidiaries; Affiliates.   (a) Schedule 5.4 contains (except as
noted therein) complete and correct lists of (i) the Company's Subsidiaries (including all of the
Guarantors), 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) the Company's Affiliates, other than Subsidiaries and (iii) the Company's 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, partnership, business trust, limited liability company or other legal entity 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, partnership, business trust, limited liability company 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. Sonic Restaurants is the managing general partner of each of the
Partnerships and owns at least a majority of the partnership interests in each of the Partnerships. Sonic Restaurants is the managing member of each of the Limited Liability Companies and owns at
least a majority of the interests in each of the Limited Liability Companies. 

5

 

    (d) No Subsidiary is a party to, or otherwise subject to any legal restriction or any agreement (other than this Agreement, the Guaranty Agreements, the agreements
listed on 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. 

 
 

    Section 5.5.    Financial Statements.   The Company has delivered to each Purchaser copies of the consolidated financial statements of the
Company and its Subsidiaries listed on 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). 

 
 

    Section 5.6.    Compliance with Laws, Other Instruments, Etc.   The execution, delivery and performance by the Company of this Agreement and
the Notes will not (a) 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 Restricted 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 Restricted Subsidiary is bound or by which the Company or any Restricted
Subsidiary or any of their respective properties may be bound or affected, (b) 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 Restricted Subsidiary or (c) violate any provision of any statute or other rule or regulation of
any Governmental Authority applicable to the Company or any Restricted Subsidiary. 

 
 

    Section 5.7.    Governmental Authorizations, Etc.   No consent, approval or authorization of, or registration, filing or declaration with,
any Governmental Authority is required in connection with the execution,
delivery or performance by the Company of this Agreement or the Notes. 

 
 

    Section 5.8.    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 Restricted Subsidiary or any property of the Company or any Restricted 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 Restricted 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. 

 
 

    Section 5.9.    Taxes.   The Company and its Restricted 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) the amount of which is not individually or in the aggregate Material or (b) 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 Restricted Subsidiary, as the case may be, has
established adequate reserves in 

6

 

accordance with GAAP. The Company knows of no basis for any other tax or assessment that could reasonably be expected to have a Material Adverse Effect. The charges, accruals and reserves on the books
of the Company and its Restricted 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 Restricted
Subsidiaries have been determined by the Internal Revenue Service and paid for all fiscal years up to and including the fiscal year ended August 31, 1997. 

 
 

    Section 5.10.    Title to Property; Leases.   The Company and its Restricted Subsidiaries have good and sufficient title to their respective
properties that individually or in the aggregate are Material,
including all such properties reflected in the most recent audited balance sheet referred to in Section 5.5 or purported to have been acquired by the Company or any Restricted 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 prohibited by this Agreement. 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. 

 
 

    Section 5.11.    Licenses, Permits, Etc.   Except as disclosed in Schedule 5.11, 

    (a) the
Company and its Restricted 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 mark, 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 Restricted Subsidiaries with respect to
any patent, copyright, service mark, trademark, trade name or other right owned or used by the Company or any of its Restricted Subsidiaries. 

 
 

    Section 5.12.    Compliance with ERISA.   (a) Neither the Company nor any ERISA Affiliate of the Company sponsors, contributes to, or has
any liability with respect to any Plan subject to Title IV of
ERISA. The Company and each ERISA Affiliate of the Company 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 of the Company has incurred any liability pursuant to Title I 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 of the Company, or in the imposition of any Lien on any of the rights,
properties or assets of the Company or any ERISA Affiliate of the Company, in either case pursuant to Title I 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
expected post-retirement 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. 

    (c) The
execution and delivery of this Agreement and the issuance and sale of the Notes hereunder will not involve any transaction that is subject to the prohibitions
of Section 406 of ERISA or in connection with which a tax could be imposed pursuant to Section 4975(c)(1)(A)-(D) of the Code. The representation by the Company in the first sentence of
this Section 5.12(c) is made in 

7

 

reliance upon and subject to the accuracy of your representation in Section 6.2 as to the sources of the funds used to pay the purchase price of the Notes to be purchased by you. 

 
 

    Section 5.13.    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, the Other Purchasers and not more than twenty-five (25) other Institutional
Investors, 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. 

 
 

    Section 5.14.    Use of Proceeds; Margin Regulations.   The Company will apply the proceeds of the sale of the Notes as set forth in
Schedule 5.14. 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 U of the Board of Governors of the Federal Reserve System (12 CFR
221), 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 (12 CFR 224) or to
involve any broker or dealer in a violation of Regulation T of said Board (12 CFR 220). Margin stock does not constitute more than 5% of the value of the consolidated assets of the Company and
its Restricted 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. 

 
 

    Section 5.15.    Existing Debt; Future Liens.   (a) Except as described therein, Schedule 5.15 sets forth a complete and correct list
of all outstanding Debt of the Company and its Restricted
Subsidiaries as of May 31, 2001, since which date there has been no Material change in the amounts, interest rates, sinking funds, installment payments or maturities of the Debt of the Company
or its Restricted Subsidiaries. Neither the Company nor any Restricted Subsidiary is in default and no waiver of default is currently in effect, in the payment of any principal or interest on any Debt
of the Company or such Restricted Subsidiary and no event or condition exists with respect to any Debt of the Company or any Restricted Subsidiary that would permit (or that with notice or the lapse
of time, or both, would permit) one or more Persons to cause such Debt 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 Restricted 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 10.6. 

 
 

    Section 5.16.    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. 

 
 

    Section 5.17.    Status under Certain Statutes.   Neither the Company nor any Restricted 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 ICC Termination Act of 1995, as amended, or the Federal Power Act, as amended. 

 
 

    Section 5.18.    Environmental Matters.   Neither the Company nor any Restricted 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 Restricted Subsidiaries or any of their respective 

8

 

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: 

    (a) neither
the Company nor any Restricted 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 Restricted Subsidiaries has stored any Hazardous Materials on real properties now or formerly owned, leased or operated by any of
them or has 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 Restricted 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. 

 
 
 

   SECTION 6.  REPRESENTATIONS OF THE PURCHASER.   

 
      Section 6.1.    Purchase for Investment.   You represent that (a) you are purchasing the Notes for your own
account or for one or more separate accounts maintained by you or for the account of
one or more pension or trust funds and not with a view to the distribution thereof, provided that the disposition of your or their property shall at all
times be within your or their control, and (b) you are an "accredited investor" within the meaning of Rule 501 of Regulation D of the Securities Act. 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. 

 
 

    Section 6.2.    Source of Funds.   You represent that at least one of the following statements is an accurate representation as to each
source of funds (a  "Source") to be used by you to pay the purchase price of the Notes to be purchased by you hereunder: 

    (a) the
Source is an "insurance company general account" within the meaning of Department of Labor Prohibited Transaction Exemption
("PTE") 95-60 (issued July 12, 1995) and there is no employee benefit plan, treating as a single plan, all plans maintained by the
same employer or employee organization, with respect to which the amount of the general account reserves and liabilities for all contracts held by or on behalf of such plan, exceeds 10% of the total
reserves and liabilities of such general account (exclusive of separate account liabilities) plus surplus, as set forth in the NAIC Annual Statement filed with your state of domicile; or 

    (b) the
Source is either (i) an insurance company pooled separate account, within the meaning of PTE 90-1 (issued January 29, 1990), or
(ii) a bank collective investment fund, within the meaning of the PTE 91-38 (issued July 12, 1991) and, except as you have disclosed to the Company in writing pursuant to
this paragraph (b), no employee benefit plan or group of plans maintained by the same employer or employee organization beneficially owns more than 10% of all assets allocated to such pooled
separate account or collective investment fund; or 

    (c) the
Source constitutes assets of an "investment fund" (within the meaning of Part V of the QPAM Exemption) managed by a "qualified professional asset
manager" or "QPAM" (within the meaning of Part V of the QPAM Exemption), no employee benefit plan's assets that are included in such investment fund, when combined with the assets of all other
employee benefit plans established or maintained by the same employer or by an affiliate (within the meaning of 

9

 

Section V(c)(1) of the QPAM Exemption) of such employer or by the same employee organization and managed by such QPAM, exceed 20% of the total client assets managed by such QPAM, the conditions
of Part l(c) and (g) of the QPAM Exemption are satisfied, neither the QPAM nor a Person controlling or controlled by the QPAM (applying the definition of "control" in Section V(e)
of the QPAM Exemption) owns a 5% or more interest in the Company and (i) the identity of such QPAM and (ii) the names of all employee benefit plans whose assets are included in such
investment fund have been disclosed to the Company in writing pursuant to this paragraph (c); or 

    (d) the
Source is a governmental plan; or 

    (e) the
Source is one or more employee benefit plans, or a separate account or trust fund comprised of one or more employee benefit plans, each of which has been
identified to the Company in writing pursuant to this paragraph (e); or 

    (f)  the
Source does not include assets of any employee benefit plan, other than a plan exempt from the coverage of ERISA. 

    If
any Purchaser or any subsequent transferee of the Notes indicates that such Purchaser or such transferee is relying on any representation contained in paragraph (b),
(c) or (e) above, the Company shall deliver on the date of the Closing or on the date of transfer, as applicable, a certificate, which shall state whether (i) it is a party in
interest or a "disqualified person" (as defined in Section 4975(e)(2) of the Internal Revenue Code of 1986, as amended), with respect to any plan
identified pursuant to paragraphs (b) or (e) above, or (ii) with respect to any plan, identified pursuant to paragraph (c) above, whether it or any  "affiliate" (as defined in
Section V(c) of the QPAM Exemption) has at such time, and during the immediately preceding one year, exercised the
authority to appoint or terminate the QPAM as manager of any plan identified in writing pursuant to paragraph (c) above or to negotiate the terms of said QPAM's management agreement on behalf
of any such identified plan. 

    As
used in this Section 6.2, the terms "employee benefit plan," "governmental plan," "party in interest" and  "separate account" shall have the respective
meanings assigned to such terms in Section 3 of ERISA. 

 
 
 

   SECTION 7.  INFORMATION AS TO COMPANY.   

 
      Section 7.1.    Financial and Business Information.   The Company shall deliver to each holder of Notes that is an
Institutional Investor: 

    (a) Quarterly Statements—within 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); 

10

 

    (b) Annual Statements—within 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 certified 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 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, 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 to public Securities holders generally, 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 all press releases and other statements 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 5 days after a
Responsible Officer becomes aware of the existence of any Default or Event of Default or that any Person has given any notice or taken any action with respect to a claimed default hereunder or that
any Person has given any notice or taken any action with respect to a claimed default of the type referred to in Section 11(f), 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 10 days after a Responsible Officer becoming
aware of any of the following, a written notice setting forth the nature thereof and the 

11

 

action, if any, that the Company or an ERISA Affiliate of the Company 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 the Company 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 of the Company 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 of the Company 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)  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; and 

    (g) 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. 

 
 

    Section 7.2.    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) hereof 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 Section 10.1 through Section 10.8 hereof, inclusive, 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) Event of Default—a statement that such 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. 

12

 

 
 

    Section 7.3.    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 and inspect any of the offices or properties of the Company or any Restricted 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, managers 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 Restricted Subsidiaries), all at such reasonable times
and at such reasonable intervals 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 Restricted 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, managers 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 Restricted Subsidiaries), all at such times and as often as may be requested. 

13

  

 
 
 

SECTION 8.  PREPAYMENT OF THE NOTES.   

 
 

    Section 8.1.    Required Prepayments.   (a) On August 10, 2004 and on each August 10 thereafter to and including August 10,
2007, the Company will prepay $1,000,000 principal
amount (or such lesser amount as shall then be outstanding) of the Series A Notes at par and without payment of the Make-Whole Amount or any premium;  provided that upon any partial prepayment of
the Series A Notes pursuant to Section 8.2 or purchase of the Series A Notes permitted
by Section 8.5 the principal amount of each required prepayment of the Series A Notes becoming due under this Section 8.1(a) on and after the date of such prepayment or purchase
shall be reduced in the same proportion as the aggregate unpaid principal amount of the Series A Notes is reduced as a result of such prepayment or purchase.. 

    (b)
On August 10, 2005 and on each August 10 thereafter to and including August 10, 2010, the Company will prepay $3,571,429 principal amount (or such lesser
amount as shall then be outstanding) of the Series B Notes at par and without payment of the Make-Whole Amount or any premium;  provided that upon any partial prepayment of the Series B Notes
pursuant to Section 8.2 or purchase of the Series B Notes permitted
by Section 8.5 the principal amount of each required prepayment of the Series B Notes becoming due under this Section 8.1(b) on and after the date of such prepayment or purchase
shall be reduced in the same proportion as the aggregate unpaid principal amount of the Series B Notes is reduced as a result of such prepayment or purchase. 

 
 

    Section 8.2.    Optional Prepayments with Make-Whole Amount.   The Company may, at its option, upon notice as provided below, prepay at any
time all, or from time to time any part of, the Notes, in a minimum principal
amount of $1,000,000 in the case of a partial prepayment, at 100% of the principal amount so prepaid, and accrued interest thereon to the date of prepayment, plus the Make-Whole Amount
determined for the prepayment date with respect to such principal amount. The Company will give each holder of Notes written notice of each optional prepayment under this Section 8.2 not less
than 30 days and not more than 60 days prior to the date fixed for such prepayment. Each such notice shall specify such date, the aggregate principal amount of the Notes to be prepaid on
such date, the principal amount of each Note held by such holder to be prepaid (determined in accordance with Section 8.3), and the interest to be paid on the prepayment date with respect to
such principal amount being prepaid, and shall be accompanied by a certificate of a Senior Financial Officer as to the estimated Make-Whole Amount due in connection with such prepayment
(calculated as if the date of such notice were the date of the prepayment), setting forth the details of such computation. Two Business Days prior to such prepayment, the Company shall deliver to each
holder of Notes a certificate of a Senior Financial Officer specifying the calculation of such Make-Whole Amount as of the specified prepayment date. 

 
 

    Section 8.3.    Allocation of Partial Prepayments.   In the case of each partial prepayment of the Notes pursuant to Section 8.2, 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. 

 
 

    Section 8.4.    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 and the applicable Make-Whole Amount, if any. From and after such date,
unless the Company shall fail to pay such principal amount when so due and payable, together with the interest and Make-Whole Amount, 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. 

14

 

 
 

    Section 8.5.    Purchase 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 upon the payment or prepayment of the Notes in accordance with the terms of this Agreement and the Notes. The Company will promptly cancel all Notes acquired by it or any Affiliate pursuant to
any payment, prepayment or purchase of Notes pursuant to any provision of this Agreement and no Notes may be issued in substitution or exchange for any such Notes. 

 
 

    Section 8.6.    Make-Whole Amount.   The term "Make-Whole Amount" means, with respect to any
Note, an amount equal to the excess, if
any, of the Discounted Value of the Remaining Scheduled Payments with respect to the Called Principal of such Note over the amount of such Called Principal,  provided that the Make-Whole Amount may in no
event be less than zero. For the purposes of determining the Make-Whole Amount,
the following terms have the following meanings: 

    "Called Principal" means, with respect to any Note, the principal of such Note that is to be prepaid pursuant to Section 8.2 or
has become or is declared to be immediately due and payable pursuant to Section 12.1, as the context requires. 

    "Discounted Value" means, with respect to the Called Principal of any Note, the amount obtained by discounting all Remaining Scheduled
Payments with respect to such Called Principal from their respective scheduled due dates to the Settlement Date with respect to such Called Principal, in
accordance with accepted financial practice and at a discount factor (applied on the same periodic basis as that on which interest on the Notes is payable) equal to the Reinvestment Yield with respect
to such Called Principal. 

    "Reinvestment Yield" means, with respect to the Called Principal of any Note, 0.50% over the yield to maturity implied by
(a) the yields reported, as of 10:00 a.m. (New York City time) on the second Business Day preceding the Settlement Date with respect to such Called Principal, on the display designated
as "Page USD" of the Bloomberg Financial Markets Services Screen (or, if not available, any other nationally recognized trading screen reporting on-line intraday trading in the U.S.
Treasury Securities) for actively traded U.S. Treasury Securities having a maturity equal to the Remaining Average Life of such Called Principal as of such Settlement Date, or (b) if such
yields are not reported as of such time or the yields reported as of such time are not ascertainable, the Treasury Constant Maturity Series Yields reported, for the latest day for which such yields
have been so reported as of the second Business Day preceding the Settlement Date with respect to such Called Principal, in Federal Reserve Statistical Release H.15 (519) (or any comparable
successor publication) for actively traded U.S. Treasury Securities having a constant maturity equal to the Remaining Average Life of such Called Principal as of such Settlement Date. Such implied
yield will be determined, if necessary, by (i) converting U.S. Treasury bill quotations to bond-equivalent yields in accordance with accepted financial practice and
(ii) interpolating linearly between (A) the actively traded U.S. Treasury Security with the maturity closest to and greater than the Remaining Average Life and (B) the actively
traded U.S. Treasury Security with the maturity closest to and less than the Remaining Average Life. 

    "Remaining Average Life" means, with respect to any Called Principal, the number of years (calculated to the nearest
one-twelfth year) obtained by dividing (a) such Called Principal into (b) the sum of the products obtained by multiplying (i) the principal component of each Remaining
Scheduled Payment with respect to such Called Principal by (ii) the number of years (calculated to the nearest one-twelfth year) that will elapse between the Settlement Date with
respect to such Called Principal and the scheduled due date of such Remaining Scheduled Payment. 

    "Remaining Scheduled Payments" means, with respect to the Called Principal of any Note, all payments of such Called Principal and
interest thereon that would be due after the Settlement Date with respect to such Called Principal if no payment of such Called Principal were made prior 

15

 

to its scheduled due date, provided that if such Settlement Date is not a date on which interest payments are due to be made under the terms of the
Notes, then the amount of the next succeeding scheduled interest payment will be reduced by the amount of interest accrued to such Settlement Date and required to be paid on such Settlement Date
pursuant to Section 8.2 or 12.1. 

    "Settlement Date" means, with respect to the Called Principal of any Note, the date on which such Called Principal is to be prepaid
pursuant to Section 8.2 or has become or is declared to be immediately due and payable pursuant to Section 12.1, as the context requires. 

 
 
 

SECTION 9.  AFFIRMATIVE COVENANTS.   

    The
Company covenants that so long as any of the Notes are outstanding: 

 
 

    Section 9.1.    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. 

 
 

    Section 9.2.    Insurance.   The Company will and will cause each of its Restricted Subsidiaries to maintain, with financially sound and
reputable insurers, 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, co-insurance and
self-insurance, if adequate reserves are maintained with respect thereto) as is customary in the case of entities of established reputations engaged in the same or a similar business and
similarly situated. 

 
 

    Section 9.3.    Maintenance of Properties.   The Company will and will cause each of its Restricted 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 Restricted 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. 

 
 

    Section 9.4.    Payment of Taxes and Claims.   The Company will and will cause each of its Restricted 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 Restricted Subsidiary, provided that neither the Company nor any
Restricted Subsidiary need pay any such tax or assessment or claims if (a) the amount, applicability or validity thereof is contested by the Company or such Restricted Subsidiary on a timely
basis in good faith and in appropriate proceedings, and the Company or a Restricted Subsidiary has established adequate reserves therefor in accordance with GAAP on the books of the Company or such
Restricted Subsidiary or (b) the nonpayment of all such taxes and assessments in the aggregate could not reasonably be expected to have a Material Adverse Effect. 

16

 

 
 

    Section 9.5.    Corporate Existence, Etc.   The Company will at all times preserve and keep in full force and effect its corporate
existence. Subject to Section 10.8, the Company will at all times
preserve and keep in full force and effect the corporate existence of each of its Restricted Subsidiaries and all rights and franchises of the Company and its Restricted 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. 

 
 

    Section 9.6.    Guaranty Agreements.   The Company will cause each Person that becomes a Material Subsidiary (other than the Partnerships
and Limited Liability Companies) at any time after the date
of the Closing to execute and deliver to each holder of Notes, immediately upon becoming a Material Subsidiary, a supplement to the Guaranty Agreement in the form of Exhibit A to the Guaranty
Agreement. The Company will cause each Person that becomes a Partnership or a Limited Liability Company at any time after the date of the Closing to execute and deliver to each holder of Notes, on or
before the next date thereafter on which a certificate is required to be delivered pursuant to Section 7.2, a supplement to the Guaranty Agreement in the form of Exhibit A to the
Guaranty Agreement. Notwithstanding the foregoing, you hereby agree that each Guaranty Agreement shall be released upon your receipt of written evidence, satisfactory in form and substance to you and
your counsel, that no other Debt of the Company is supported by any Guaranty from any Subsidiary. In the event that each Guaranty Agreement is so released and other Debt of the Company is thereafter
supported by any Guaranty from any Subsidiary, the Company will cause each of its Subsidiaries that executed and delivered a Guaranty supporting such other Debt to execute and deliver to each holder
of Notes, a Guaranty Agreement. 

 
 
 

SECTION 10.  NEGATIVE COVENANTS.   

    The
Company covenants that so long as any of the Notes are outstanding: 

 
 

    Section 10.1.    Consolidated Net Worth.   The Company will not, at any time, permit Consolidated Net Worth to be less than the sum of
(a) $140,000,000, plus (b) 25% of the cumulative sum
of Consolidated Net Income for each fiscal quarter ending after May 31, 2001 (but only if such cumulative sum is a positive number). 

 
 

    Section 10.2.    Consolidated Debt.   The Company will not at any time permit Consolidated Debt to exceed 55% of Consolidated
Capitalization. 

 
 

    Section 10.3.    Priority Debt.   The Company will not at any time permit Priority Debt to exceed 20% of Consolidated Net Worth. 

 
 

    Section 10.4.    Fixed Charges Coverage Ratio.   The Company will keep and maintain, as of the last day of each fiscal year of the Company,
the Fixed Charges Coverage Ratio at not less than 2.0 to 1. 

 
 

    Section 10.5.    Restricted Payments and Restricted Investments.   (a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, declare, make or incur any liability to make any Restricted
Payment or make or authorize any Restricted Investment unless immediately after giving effect to such action: 

    (i)  in
the case of any Restricted Investment, the aggregate value of all Restricted Investments of the Company and its Restricted Subsidiaries (valued immediately
after such action) would not exceed 20% of Consolidated Net Worth; and 

    (ii) in
the case of any Restricted Investment or Restricted Payment, no Default or Event of Default shall exist. 

17

 

    (b)    The
Company will not, nor will it permit any of its Restricted Subsidiaries to, authorize a Restricted Payment that is not payable within 60 days of
authorization. 

 
 

    Section 10.6.    Liens.   The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly create,
incur, assume or permit to exist (upon the
happening of a contingency or otherwise) any Lien on or with respect to any property or asset (including, without limitation, any logos, trademarks, and tradenames and any document or instrument in
respect of goods or accounts receivable) of the Company or any such Restricted Subsidiary, whether now owned or held or hereafter acquired, or any income or profits therefrom, or assign or otherwise
convey any right to receive income or profits, except: 

    (a) Liens
for property taxes and assessments or governmental charges or levies and Liens securing claims or demands of mechanics and materialmen which are being
contested in good faith or are not yet due and payable or the payment of which is not at the time required by Section 9.4; 

    (b) Liens
of or resulting from any judgment or award, the time for the appeal or petition for rehearing of which shall not have expired, or in respect of which the
Company or a Restricted Subsidiary shall at such time in good faith be prosecuting an appeal or proceeding for a review and in respect of which a stay of execution pending such appeal or proceeding
for review shall have been secured, and the Company or such Restricted Subsidiary shall have established adequate reserves therefor in accordance with GAAP on the books of the Company or such
Restricted Subsidiary; 

    (c) Liens
(other than any Lien imposed by ERISA) incurred or deposits made in the ordinary course of business (i) in connection with workers' compensation,
unemployment insurance and other types of social security or retirement benefits, or (ii) to secure (or to obtain letters of credit that secure) the performance of tenders, statutory
obligations, surety bonds, appeal bonds, bids, leases (other than Capital Leases), performance bonds, purchase, construction or sales contracts and other similar obligations, in each case not incurred
or made in connection with the borrowing of money, the obtaining of advances or credit or the payment of the deferred purchase price of property; 

    (d) minor
survey exceptions or minor encumbrances, easements or reservations, or rights of others for rights-of-way, utilities and other similar
purposes, or zoning or other restrictions as to the use of real properties arising in the ordinary course of business and not in connection with the borrowing of money, which are necessary for the
conduct of the activities of the Company and its Restricted Subsidiaries or which customarily exist on properties of corporations engaged in similar activities and similarly situated and which do not
in any event materially impair their use in the operation of the business of the Company and its Restricted Subsidiaries or materially detract from the value of such property; 

    (e) Liens
existing on the date of this Agreement and securing the Debt of the Company and its Restricted Subsidiaries referred to in item 3 of Schedule 5.15; 

    (f)  Liens
incurred after the date of the Closing given to secure the payment of the purchase price incurred in connection with the acquisition of, or the costs of
construction or improvement of, fixed assets useful and intended to be used in carrying on the business of the Company or its Restricted Subsidiaries, including Liens existing on such fixed assets at
the time of acquisition thereof or at the time of acquisition by the Company or its Restricted Subsidiaries of any business entity then owning such fixed assets, whether or not such existing Liens
were given to secure the payment of the purchase price of the fixed assets to which they attach so long as they were not incurred, extended or renewed in contemplation of such acquisition,  provided that
(i) the Lien or charge shall attach solely to the property acquired, constructed or improved, (ii) except in the case of
Liens existing at the time of such acquisition, construction or improvement, such Lien or charge 

18

 

has attached within 180 days of the completion of such acquisition, construction or improvement (except that, in the case of construction or acquisition of improvements to real property, the
real property on which such improvements are located shall not be required to have been acquired within such 180 day period), (iii) at the time of the completion of such acquisition,
construction or improvement of such fixed assets, the aggregate amount remaining unpaid on all Debt secured by Liens on such fixed assets whether or not assumed by the Company shall not exceed an
amount equal to the total purchase price of such fixed assets, and (iv) at the time of creation, issuance, assumption, guarantee or incurrence of the Debt secured by such Lien and after giving
effect thereto, no Default or Event of Default would exist under Section 10.2 or Section 10.3; 

    (g) Liens
on property or assets of any of the Restricted Subsidiaries securing Debt owing to the Company or to another Restricted Subsidiary; and 

    (h) Liens
not otherwise permitted by paragraphs (a) through (g), inclusive, of this Section 10.6 securing Debt of the Company or a Restricted Subsidiary,  provided that no Liens shall be permitted on
logos, trademarks or tradenames of the Company or any Restricted Subsidiary pursuant to this
paragraph (h), provided, however, that for purposes of the immediately preceding proviso, the licensing of any logo, trademark or tradename, on a
non-exclusive basis and in the ordinary course of business, shall be deemed not to create a Lien on such logo, trademark or tradename, and provided,
further, that at the time of creation, issuance, assumption, guarantee or incurrence of the Debt secured by such Liens permitted by this paragraph (h) and after giving
effect thereto, no Default or Event of Default would exist under Section 10.2 or Section 10.3. 

 
 

    Section 10.7.    Sale of Assets.   Except as permitted by Section 10.8, the Company will not, and will not permit any Restricted
Subsidiary to, sell, lease, transfer or otherwise dispose
of, including by way of merger (collectively, a "Disposition"), any assets, including capital stock of Restricted Subsidiaries, in one or a series of
transactions, to any Person, other than (a) Dispositions in the ordinary course of business, (b) Dispositions by the Company to a Restricted Subsidiary or by a Restricted Subsidiary to
the Company or to another Restricted Subsidiary as long as, after giving effect thereto, no Default or Event of Default exists or (c) other Dispositions not otherwise permitted by this
Section 10.6, including the sale of receivables pursuant to asset securitization transactions, provided that (i) after giving effect
thereto, no Default or Event of Default exists and (ii) the aggregate net book value of all assets so disposed of in any fiscal year of the Company pursuant to this Section 10.7(c) does
not exceed 15% of Consolidated Total Assets as of the end of the immediately preceding fiscal year of the Company. 

    Notwithstanding
the foregoing, the Company may, or may permit any Restricted Subsidiary to, make a Disposition and the assets subject to such Disposition shall not be subject to or
included in the foregoing limitation and computation contained in Section 10.7(c) of the preceding sentence to the extent that (i) such assets are leased back by the Company or a
Restricted Subsidiary, as lessee, within 180 days of the acquisition or construction thereof, or (ii) the net proceeds from such Disposition are within one year of such Disposition
(A) reinvested in productive assets by the Company or a Restricted Subsidiary or (B) applied to the payment or prepayment of any outstanding Debt of the Company or any Restricted
Subsidiary that is not subordinated to the Notes. Any prepayment of Notes pursuant to this Section 10.7 shall be in accordance with Sections 8.2 and 8.3, but without regard to the minimum
prepayment requirements of Section 8.2 if such net proceeds are less than such minimum. 

 
 

    Section 10.8.    Merger, Consolidation, Etc.   The Company will not, and will not permit any of its Restricted Subsidiaries to, consolidate
with or merge with any other Person or convey, transfer or lease
substantially all of its assets in a single transaction or series of transactions to any Person (except that a Restricted Subsidiary of the Company may (x) consolidate with or merge with, or
convey, transfer or lease substantially all of its assets in a single transaction or series of transactions to, the Company or a Wholly-Owned Restricted Subsidiary and (y) convey, transfer or
lease all of its assets in compliance 

19

 

with the provisions of Section 10.7), provided that the foregoing restriction does not apply to the consolidation or merger of the Company with,
or the conveyance, transfer or lease of substantially all of the assets of the Company in a single transaction or series of transactions to, any Person so long as: 

    (a) the
surviving or continuing corporation of such consolidation or merger or the Person that acquires by conveyance, transfer or lease substantially all of the assets
of the Company as an entirety, as the case may be (the "Successor Corporation"), shall be a solvent corporation organized and existing under the laws of
the United States of America, any State thereof or the District of Columbia; 

    (b) if
the Company is not the Successor Corporation, such corporation shall have executed and delivered to each holder of the Notes its assumption of the due and
punctual performance and observance of each covenant and condition of this Agreement and the Notes (pursuant to such agreements and instruments as shall be reasonably satisfactory to the Required
Holders), and the Company shall have caused to be delivered to each holder of Notes an opinion of nationally recognized independent counsel, or other independent 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 

    (c) immediately
after giving effect to such transaction, no Default or Event of Default would exist. 

    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 from its liability
under this Agreement or the Notes. 

 
 

    Section 10.9.    Restrictions on Dividends of Restricted Subsidiaries.   The Company will not, and will not permit any of its Restricted
Subsidiaries to, enter into any agreement which would restrict any Restricted Subsidiary's
ability or right to pay dividends to, or make advances to or Investments in, the Company or, if such Restricted Subsidiary is not directly owned by the Company, the "parent" Subsidiary of such
Restricted Subsidiary. 

 
 

    Section 10.10.    Line of Business.   The Company will not, and will not permit any of its Restricted Subsidiaries to, engage in any
business if, as a result, the general nature of the business in
which the Company and its Restricted Subsidiaries, taken as a whole, would then be engaged would be substantially changed from the general nature of the business in which the Company and its
Restricted Subsidiaries, taken as a whole, are engaged on the date of this Agreement as described in the Memorandum. 

 
 

    Section 10.11.    Transactions with Affiliates.   The Company will not and will not permit any Restricted 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
Restricted Subsidiary), except in the ordinary course and pursuant to the reasonable requirements of the Company's or such Restricted Subsidiary's business and upon fair and reasonable terms no less
favorable to the Company or such Restricted Subsidiary than would be obtainable in a comparable arm's-length transaction with a Person not an Affiliate. 

 
 

    Section 10.12.    Changes in Status of Subsidiaries.   (a) So long as no Default or Event of Default shall have occurred and be continuing,
the Board of Directors of the Company may at any time and from time to
time, upon not less than 30 days' prior written notice given to each holder of Notes, designate a previously Restricted Subsidiary (including a new Subsidiary designated on the date of its
formation) as an Unrestricted Subsidiary, provided that (i) no Guarantor or Material Subsidiary may be designated an Unrestricted Subsidiary,
(ii) immediately after such designation and after giving effect 

20

 

thereto (1) no Default or Event of Default shall have occurred and be continuing and (2) such previously Restricted Subsidiary does not own, directly or indirectly, any Debt or shares of
capital stock or similar equity interests of any Restricted Subsidiary, and (iii) such designation is treated as a sale of assets subject to the provisions of Section 10.7. 

    (b)    Any
notice of designation pursuant to this Section 10.12 shall be accompanied by a certificate signed by a Responsible Officer of the Company stating that
the provisions of this Section 10.12 have been complied with in connection with such designation and setting forth the name of each other Subsidiary (if any) which has or will become an
Unrestricted Subsidiary as a result of such designation. 

 
 
 

SECTION 11.  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 Make-Whole Amount, if any, 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) or Sections 10.1 through 10.11, 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 the earlier of (i) a Responsible Officer obtaining actual knowledge of such default and
(ii) the Company receiving written notice of such default from any holder of a Note (any such written notice to be identified as a "notice of default" and to refer specifically to this
paragraph (d) of Section 11); or 

    (e) any
representation or warranty made in writing by or on behalf of the Company or any Guarantor or by any officer of the Company or any Guarantor in this Agreement,
any Guaranty 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)  (i) the
Company or any Restricted Subsidiary is in default (as principal or as guarantor or other surety) in the payment of any principal of or premium or
make-whole amount or interest on any Debt that is outstanding in an aggregate principal amount of at least $5,000,000 beyond any period of grace provided with respect thereto, or
(ii) the Company or any Restricted Subsidiary is in default in the performance of or compliance with any term of any evidence of any Debt in an aggregate outstanding principal amount of at
least $5,000,000 or of any mortgage, indenture or other agreement relating thereto or any other condition exists, and as a consequence of such default or condition such Debt has become, or has been
declared (or one or more Persons are entitled to declare such Debt to be), due and payable before its stated maturity or before its regularly scheduled dates of payment, or (iii) as a
consequence of the occurrence or continuation of any event or condition (other than the passage of time or the right of the holder of Debt to convert such Debt into equity interests), (A) the
Company or any Restricted Subsidiary has become obligated to purchase or repay Debt before its regular maturity or before its regularly scheduled dates of payment in an aggregate outstanding principal
amount of at least $5,000,000, or (B) one or more Persons have the right to require the Company or any Restricted Subsidiary so to purchase or repay such Debt; or 

21

 

    (g) the Company or any Restricted 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 

    (h) a
court or governmental authority of competent jurisdiction enters an order appointing, without consent by the Company or any of its Restricted Subsidiaries, 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 of its Restricted Subsidiaries, or any such petition shall be filed against the Company or any of its Restricted Subsidiaries and such
petition shall not be dismissed within 60 days; or 

    (i)  a
final judgment or judgments for the payment of money aggregating in excess of $5,000,000 are rendered against one or more of the Company and its Restricted
Subsidiaries and which judgments are not, within 60 days after entry thereof, bonded, discharged or stayed pending appeal, or are not discharged within 60 days after the expiration of
such stay; or 

    (j)  if
(i) any Plan shall fail to satisfy the minimum funding standards of ERISA or the Code for any plan year or part thereof or a waiver of such standards or
extension of any amortization period is sought or granted under Section 412 of the Code, (ii) a notice of intent to terminate any Plan shall have been or is reasonably expected to be
filed with the PBGC or the PBGC shall have instituted proceedings under ERISA Section 4042 to terminate or appoint a trustee to administer any Plan or the PBGC shall have notified the Company
or any ERISA Affiliate of the Company that a Plan may become a subject of any such proceedings, (iii) the aggregate "amount of unfunded benefit liabilities" (within the meaning of
Section 4001(a)(18) of ERISA) under all Plans, determined in accordance with Title IV of ERISA, shall exceed $5,000,000, (iv) the Company or any ERISA Affiliate of the Company shall have
incurred or is reasonably expected to incur 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, (v) the
Company or any ERISA Affiliate of the Company withdraws from any Multiemployer Plan, or (vi) the Company or any Restricted Subsidiary establishes or amends any employee welfare benefit plan
that provides post-employment welfare benefits in a manner that would increase the liability of the Company or any Restricted Subsidiary thereunder; and any such event or events described
in clauses (i) through (vi) above, either individually or together with any other such event or events, could reasonably be expected to have a Material Adverse Effect; or 

    (k) any
Guarantor shall breach its obligations under any Guaranty Agreement or any Guaranty Agreement shall have been declared to be unenforceable or any Guarantor
shall contest or deny in writing the validity or enforceability of its obligations under any Guaranty Agreement or shall take any other affirmative action to cause any Guaranty Agreement to cease to
be valid or enforceable. 

As
used in Section 11(j), the terms "employee benefit plan" and "employee welfare benefit plan"
shall have the respective meanings assigned to such terms in Section 3 of ERISA. 

 
 
 
22

 

 
 

SECTION 12.  REMEDIES ON DEFAULT, ETC.   

 
 

    Section 12.1.    Acceleration.   (a) If an Event of Default with respect to the Company or any Guarantor described in paragraph (g) or
(h) of Section 11 (other than an
Event of Default described in clause (i) of paragraph (g) or described in clause (vi) of paragraph (g) by virtue of the fact that such clause encompasses clause (i)
of paragraph (g)) has occurred, all the Notes then outstanding shall automatically become immediately due and payable. 

    (b)    If
any other Event of Default has occurred and is continuing, any holder or holders of a majority in principal amount of the Notes at the time outstanding may at
any time at its or their option, by notice or notices to the Company, declare all the Notes then outstanding to be immediately due and payable. 

    (c)    If
any Event of Default described in paragraph (a) or (b) of Section 11 has occurred and is continuing, any holder or holders of Notes at the
time outstanding affected by such Event of Default may at any time, at its or their option, by notice or notices to the Company, declare all the Notes held by it or them to be immediately due and
payable. 

    Upon
any Note becoming due and payable under this Section 12.1, whether automatically or by declaration, such Note will forthwith mature and the entire unpaid principal amount
of such Note, plus all accrued and unpaid interest thereon and the Make-Whole Amount, if any, determined in respect of such principal amount (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. The Company acknowledges, and the parties
hereto agree, that each holder of a Note has the right to maintain its investment in the Notes free from repayment by the Company (except as herein specifically provided for), and that the provision
for payment of a Make-Whole Amount by the Company in the event that the Notes are prepaid or are accelerated as a result of an Event of Default, is intended to provide compensation for the
deprivation of such right under such circumstances. 

 
 

    Section 12.2.    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. 

 
 

    Section 12.3.    Rescission.   At any time after any Notes have been declared due and payable pursuant to clause (b) or (c) of
Section 12.1, the holders of a majority in
principal amount of the Notes then outstanding, 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 of each series, all principal of and Make-Whole Amount, if any, on 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 Make-Whole Amount, if any, and (to the extent permitted by applicable law) any overdue interest in respect of the Notes of each series, at the
respective Default Rates, (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. 

 
 

    Section 12.4.    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 

23

 

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. 

24

  

 
 
 

SECTION 13.  REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.   

 
 

    Section 13.1.    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. 

 
 

    Section 13.2.    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 its 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 within 10 Business Days, at the Company's expense (except as provided
below), one or more new Notes of the same series (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 and shall be substantially in the form of Exhibit 1A or 1B, as the case may be. 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. Any transferee of a Note, or purchaser of a participation therein, shall, by its acceptance of such Note or participation be deemed to make the same representations
to the Company regarding the Note or participation as you and the Other Purchasers have made pursuant to Section 6.2, provided that such entity
may (in reliance upon information provided by the Company, which shall not be unreasonably withheld) make a representation to the effect that the purchase by such entity of any Note or participation
will not constitute a non-exempt prohibited transaction under Section 406(a) of ERISA; provided,  however, that, such transferee or purchaser of a
participation will not be deemed to have chosen the options set forth in Section 6.2(b),
(c) or (e) unless such transferee or purchaser of a participation shall have made the disclosures referred to therein at least five Business Days prior to its acceptance of such Note or
participation and shall have received prior to such acceptance of such Note or participation the certificate provided for in the penultimate paragraph of Section 6.2 and such
certificate shall contain the statement set forth in either Section 4.3(g)(1) or (2), as applicable; and provided, further, that, such transferee
or purchaser of a participation will not be deemed to have chosen an option set forth in Section 6.2(b), (c) or (e) unless the applicable Class Exemption referred to therein
remains in effect at that time or another similar Class Exemption is then available. The Company shall exercise reasonable due diligence as is necessary to respond to any such disclosure,  provided that,
if the Company shall not respond within five Business Days following receipt of any such disclosure, it shall be deemed to have made the
statement set forth in either Section 4.3(g)(1) or (2), as applicable. 

 
 

    Section 13.3.    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 

25

 

    (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 another holder of a Note with a minimum net worth of at least $10,000,000, 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 within 10 Business Days, 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. 

 
 
 

SECTION 14.  PAYMENTS ON NOTES.   

 
 

    Section 14.1.    Place of Payment.   Subject to Section 14.2, payments of principal, Make-Whole Amount, if any, and interest becoming
due and payable on the Notes shall be made
in New York, New York at the principal office of The Chase Manhattan Bank 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. 

 
 

    Section 14.2.    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, Make-Whole Amount, if any, 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. 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. 

 
 
 

SECTION 15.  EXPENSES, ETC.   

 
 

    Section 15.1.    Transaction Expenses.   Whether or not the transactions contemplated hereby are consummated, the Company will pay all costs
and expenses (including reasonable attorneys' fees of a
special counsel 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, any Guaranty Agreement, the Intercreditor 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,
any Guaranty Agreement, the Intercreditor Agreement or the Notes or in responding to any subpoena or other legal process or informal investigative demand issued in connection with this Agreement, any
Guaranty Agreement, the Intercreditor 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 Restricted 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). 

26

 

 
 

    Section 15.2.    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, any Guaranty Agreement, the Intercreditor Agreement or the Notes, and the termination of this Agreement, the Guaranty Agreements and the Intercreditor Agreement. 

 
 
 

SECTION 16.  SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.   

    All
representations and warranties contained herein shall survive the execution and delivery of this Agreement, the Guaranty Agreements, the Intercreditor 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, the Guaranty Agreements, the Intercreditor 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. 

 
 
 

SECTION 17.  AMENDMENT AND WAIVER.   

 
 

    Section 17.1.    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 hereof, 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 reduce the rate or change the time of payment or method of computation of interest or of the Make-Whole Amount 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. 

 
 

    Section 17.2.    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, any Guaranty Agreement or the Intercreditor Agreement. 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 or of the Notes, any Guaranty Agreement or the Intercreditor Agreement unless such remuneration is concurrently paid, or security is concurrently
granted, on the same terms, ratably to each holder of Notes then outstanding whether or not such holder consented to such waiver or amendment. 

 
 

    Section 17.3.    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 

27

 

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. 

 
 

    Section 17.4.    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. 

 
 
 

SECTION 18.  NOTICES.   

    All
notices and communications provided for hereunder shall be in writing and sent (a) by telefacsimile 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: 

    (i)  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, 

    (ii) 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 

    (iii) 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. 

28

  

 
 
 

SECTION 19.  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. 

 
 
 

SECTION 20.  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 and, in the case of information that is otherwise known to you prior to the time of such
disclosure, the Company or such Subsidiary shall not, prior to the time of such disclosure, have identified such information to you as Confidential Information, (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 and prior
to the time of any disclosure of such information by you, the Company or such Subsidiary shall not have identified such information to you as Confidential Information 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, trustees, officers, 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 who agree 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) the National Association of Insurance Commissioners or any similar organization, or 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 (A) to effect compliance
with any law, rule, regulation or order applicable to you, (B) in response to any subpoena or other legal process, (C) in connection with any litigation to which you are a party or
(D) 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, this Agreement, any Guaranty Agreement or the Intercreditor Agreement. Each holder of a Note, by its acceptance of a 

29

 

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 or any other holder that shall have previously delivered such a confirmation), such holder will confirm in writing that it is bound by the provisions of this
Section 20. 

 
 
 

SECTION 21.  SUBSTITUTION OF PURCHASER.   

    You
shall have the right to substitute any one of your Affiliates as the purchaser of the Notes that you have agreed to purchase 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. 

 
 
 

 
 

SECTION 22.  MISCELLANEOUS.   

 
 

    Section 22.1.    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. 

 
 

    Section 22.2.    Payments Due on Non-Business Days.   Anything in this Agreement or the Notes to the contrary notwithstanding, any payment
of principal of or Make-Whole Amount 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. 

 
 

    Section 22.3.    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. 

 
 

    Section 22.4.    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. 

 
 

    Section 22.5.    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. 

30

 

 
 

    Section 22.6.    Governing Law.   THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE
GOVERNED BY, THE LAW OF THE STATE OF NEW YORK
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. 

*   *   *   *   *

31

 

    If you are in agreement with the foregoing, please sign the form of agreement on the accompanying counterpart of this Agreement and return it to the Company, whereupon the foregoing
shall become a binding agreement between you and the Company. 

	 	 	SONIC CORP.
	

 	
 	

By:	
 	

/s/ W. SCOTT MCLAIN   
 W. Scott McLain
 Its Sr. Vice-President

The
foregoing is hereby agreed to. 

	 	 	PACIFIC LIFE INSURANCE COMPANY
	

 	
 	

By:	
 	

/s/ DAVID C. PATCH   
 David C. Patch
 Its Assistant Vice President
	

 	
 	

By:	
 	

/s/ PETER S. FIEK   
 Peter S. Fiek
 Its Assistant Secretary

	 	 	PACIFIC LIFE & ANNUITY COMPANY
	

 	
 	

By:	
 	

/s/ PETER S. FIEK   
 Peter S. Fiek
 Its Assistant Vice President
	

 	
 	

By:	
 	

/s/ JANE M. GUEN   
 Jane M. Guen
 Its Assistant Secretary

32

 

The foregoing is hereby agreed to. 

	 	 	MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
	

 	
 	

By: David L. Babson & Company, Inc., an

      Investment Advisor
	

 	
 	

By:	
 	

/s/ MARK A. AHMED   
 Mark A. Ahmed
 Managing Director

	 	 	C.M. LIFE INSURANCE COMPANY
	

 	
 	

By: David L. Babson & Company, Inc., an

      Investment Sub-Advisor
	

 	
 	

By:	
 	

/s/ MARK A. AHMED   
 Mark A. Ahmed
 Its Managing Director

	 	 	THE CANADA LIFE ASSURANCE COMPANY
	

 	
 	

By:	
 	

/s/ C. PAUL ENGLISH   
 C. Paul English
 Its Associate Treasurer

	 	 	CANADA LIFE INSURANCE COMPANY OF AMERICA
	

 	
 	

By:	
 	

/s/ C. PAUL ENGLISH   
 C. Paul English
 Its Assistant Treasurer

33

 
 

INFORMATION RELATING TO PURCHASERS

	 
	 	PRINCIPAL AMOUNT OF NOTES

TO BE PURCHASED

	NAME AND ADDRESS

OF PURCHASERS

	 	SERIES A NOTES
	 	SERIES B NOTES

	PACIFIC LIFE INSURANCE COMPANY

700 Newport Center Drive

Newport Beach, California 92660-6397

Attention: Securities Department

Facsimile: (949) 219-5406	 	-0-	 	$	8,000,000

Payments

All
payments on or in respect of the Notes to be by bank wire transfer of Federal or other immediately available funds (identifying each payment as "Sonic Corp., 6.87% Senior Notes due 2011, PPN
835451 B*5, principal, premium or interest") to: 

Federal
Reserve Bank of Boston

ABA #0110-0123-4/BOS SAFE DEP

DDA 125261

Attention: MBS Income CC: 1253

A/C Name: Pacific Life General Account/PLCF 1810132

Regarding: Security Description and PPN 

Notices 

All
notices and communications to be addressed as first provided above, except notices with respect to payments and written confirmation of each such payment, to be addressed: 

Mellon
Trust

Attention: Pacific Life Accounting Team

One Mellon Bank Center-Room 0930

Pittsburgh, PA 15258-0001

Fax #412-236-7529 

and

Pacific
Life Insurance Company

Attention: Securities Administration—Cash Team

700 Newport Center Drive

Newport Beach, CA 92660-6397

Fax #949-640-4013 

Name
of Nominee in which Notes are to be issued: Mac & Co. 

General
Taxpayer I.D. Number: 95-1079000 

SCHEDULE A

(to Note Purchase Agreement)  

 

	 
	 	PRINCIPAL AMOUNT OF NOTES

TO BE PURCHASED

	NAME AND ADDRESS

OF PURCHASERS

	 	SERIES A NOTES
	 	SERIES B NOTES

	PACIFIC LIFE & ANNUITY COMPANY

700 Newport Center Drive

Newport Beach, California 92660-6397

Attention: Securities Department

Facsimile: (949) 219-5406	 	-0-	 	$	7,000,000

Payments

All
payments on or in respect of the Notes to be by bank wire transfer of Federal or other immediately available funds (identifying each payment as "Sonic Corp., 6.87% Senior Notes due 2011, PPN
835451 B*5, principal, premium or interest") to: 

Federal
Reserve Bank of Boston

ABA #0110-0123-4/BOS SAFE DEP

DDA 125261

Attention: MBS Income CC: 1253

A/C Name: Pacific Life & Annuity Company PLCF 1811612

Regarding: Security Description and PPN 

Notices 

All
notices and communications to be addressed as first provided above, except notices with respect to payments and written confirmation of each such payment, to be addressed: 

Mellon
Trust

Attention: Pacific Life Accounting Team

One Mellon Bank Center-Room 0930

Pittsburgh, PA 15258-0001

Fax #412-236-7529 

and

Pacific
Life Insurance Company

Attention: Securities Administration—Cash Team

700 Newport Center Drive

Newport Beach, CA 92660-6397

Fax #949-640-4013 

Name
of Nominee in which Notes are to be issued: Mac & Co. 

General
Taxpayer I.D. Number: 95-3769814 

A–2

 

	 
	 	PRINCIPAL AMOUNT OF NOTES

TO BE PURCHASED

	NAME AND ADDRESS

OF PURCHASERS

	 	SERIES A NOTES
	 	SERIES B NOTES

	MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY

c/o David L. Babson & Company Inc.

1295 State Street

Springfield, MA 01111

Attention: Securities Investment Division	 	-0-	 	$	4,500,000

Payments

All
payments on account of the Note shall be made by crediting in the form of bank wire transfer of Federal or other immediately available funds, (identifying each payment as "Sonic Corp., 6.87%
Senior Notes, Series B, due 2011, PPN 835451 B*5, interest and principal") to: 

Citibank,
N.A.

111 Wall Street

New York, NY 10043

ABA #021000089

For MassMutual Long-Term Pool

Account No. 4067-3488

Re: Description of security, principal and interest split 

With
telephone advice of payment to the Securities Custody and Collection Department of David L. Babson & Company Inc. at (413) 744-5104 or
(413) 744-5718. 

Notices 

All
notices and communications to be addressed as first provided above, except notices with respect to payments, to be addressed Attention: Securities Custody and Collection
Department—F381. 

Name
of Nominee in which Notes are to be issued: None 

Taxpayer
I.D. Number: 04-1590850 

A–3

 

	 
	 	PRINCIPAL AMOUNT OF NOTES

TO BE PURCHASED

	NAME AND ADDRESS

OF PURCHASERS

	 	SERIES A NOTES
	 	SERIES B NOTES

	MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY

c/o David L. Babson & Company Inc.

1295 State Street

Springfield, MA 01111

Attention: Securities Investment Division	 	-0-	 	$	2,500,000

Payments

All
payments on account of the Note shall be made by crediting in the form of bank wire transfer of Federal or other immediately available funds, (identifying each payment as "Sonic Corp., 6.87%
Senior Notes, Series B, due 2011, PPN 835451 B*5, interest and principal") to: 

Chase
Manhattan Bank, N.A.

4 Chase Metro Tech Center

New York, NY 10081

ABA #021000021

For MassMutual Pension Management

Account No. 910-2594018

Re: Description of security, principal and interest split 

With
telephone advice of payment to the Securities Custody and Collection Department of David L. Babson & Company Inc. at (413) 744-5104 or
(413) 744-5718. 

Notices

All
notices and communications to be addressed as first provided above, except notices with respect to payments, to be addressed Attention: Securities Custody and Collection
Department—F381. 

Name
of Nominee in which Notes are to be issued: None 

Taxpayer
I.D. Number: 04-1590850 

A–4

 

	 
	 	PRINCIPAL AMOUNT OF NOTES

TO BE PURCHASED

	NAME AND ADDRESS

OF PURCHASERS

	 	SERIES A NOTES
	 	SERIES B NOTES

	MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY

c/o David L. Babson & Company Inc.

1295 State Street

Springfield, MA 01111

Attention: Securities Investment Division	 	-0-	 	$	1,500,000

Payments

All
payments on account of the Note shall be made by crediting in the form of bank wire transfer of Federal or other immediately available funds, (identifying each payment as "Sonic Corp., 6.87%
Senior Notes, Series B, due 2011, PPN 835451 B*5, interest and principal") to: 

Citibank,
N.A.

111 Wall Street

New York, NY 10043

ABA #021000089

For MassMutual Spot Priced Contract

Account No. 3890-4953

Re: Description of security, principal and interest split 

With
telephone advice of payment to the Securities Custody and Collection Department of David L. Babson & Company Inc. at (413) 744-5104 or
(413) 744-5718. 

Notices

All
notices and communications to be addressed as first provided above, except notices with respect to payments, to be addressed Attention: Securities Custody and Collection
Department—F381. 

Name
of Nominee in which Notes are to be issued: None 

Taxpayer
I.D. Number: 04-1590850 

A–5

 

	 
	 	PRINCIPAL AMOUNT OF NOTES

TO BE PURCHASED

	NAME AND ADDRESS

OF PURCHASERS

	 	SERIES A NOTES
	 	SERIES B NOTES

	MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY

c/o David L. Babson & Company Inc.

1295 State Street

Springfield, MA 01111

Attention: Securities Investment Division	 	-0-	 	$	500,000

Payments

All
payments on account of the Note shall be made by crediting in the form of bank wire transfer of Federal or other immediately available funds, (identifying each payment as "Sonic Corp., 6.87%
Senior Notes, Series B, due 2011, PPN 835451 B*5, interest and principal") to: 

Chase
Manhattan Bank, N.A.

4 Chase Metro Tech Center

New York, NY 10081

ABA #021000021

For MassMutual IFM Non-Traditional

Account No. 910-2509073

Re: Description of security, principal and interest split 

With
telephone advice of payment to the Securities Custody and Collection Department of David L. Babson & Company Inc. at (413) 744-5104 or
(413) 744-5718. 

Notices

All
notices and communications to be addressed as first provided above, except notices with respect to payments, to be addressed Attention: Securities Custody and Collection
Department—F381. 

Name
of Nominee in which Notes are to be issued: None 

Taxpayer
I.D. Number: 04-1590850 

A–6

 

	 
	 	PRINCIPAL AMOUNT OF NOTES

TO BE PURCHASED

	NAME AND ADDRESS

OF PURCHASERS

	 	SERIES A NOTES
	 	SERIES B NOTES

	MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY

c/o David L. Babson & Company Inc.

1295 State Street

Springfield, MA 01111

Attention: Securities Investment Division	 	-0-	 	$	500,000

Payments

All
payments on account of the Note shall be made by crediting in the form of bank wire transfer of Federal or other immediately available funds, (identifying each payment as "Sonic Corp., 6.87%
Senior Notes, Series B, due 2011, PPN 835451 B*5, interest and principal") to: 

Citibank,
N.A.

111 Wall Street

New York, NY 10043

ABA #021000089

For MassMutual Structured Settlement Fund

Account No. 4065-5423

Re: Description of security, principal and interest split 

With
telephone advice of payment to the Securities Custody and Collection Department of David L. Babson & Company Inc. at (413) 744-5104 or
(413) 744-5718. 

Notices

All
notices and communications to be addressed as first provided above, except notices with respect to payments, to be addressed Attention: Securities Custody and Collection
Department—F381. 

Name
of Nominee in which Notes are to be issued: None 

Taxpayer
I.D. Number: 04-1590850 

A–7

 

	 
	 	PRINCIPAL AMOUNT OF NOTES

TO BE PURCHASED

	NAME AND ADDRESS

OF PURCHASERS

	 	SERIES A NOTES
	 	SERIES B NOTES

	C.M. LIFE INSURANCE COMPANY

C/O MASSACHUSETTS MUTUAL LIFE

INSURANCE COMPANY

c/o David L. Babson & Company Inc.

1295 State Street

Springfield, MA 01111

Attention: Securities Investment Division	 	-0-	 	$	500,000

Payments

All
payments on account of the Note shall be made by crediting in the form of bank wire transfer of Federal or other immediately available funds, (identifying each payment as "Sonic Corp., 6.87%
Senior Notes, Series B, due 2011, PPN 83545 B*5, interest and principal") to: 

Citibank,
N.A.

111 Wall Street

New York, NY 10043

ABA #021000089

For Segment 43—Universal Life

Account No. 4068-6561

Re: Description of security, principal and interest split 

With
telephone advice of payment to the Securities Custody and Collection Department of David L. Babson & Company Inc. at (413) 744-5104 or
(413) 744-5718. 

Notices

All
notices and communications to be addressed as first provided above, except notices with respect to payments, to be addressed Attention: Securities Custody and Collection
Department—F381. 

Name
of Nominee in which Notes are to be issued: None 

Taxpayer
I.D. Number: 06-1041383 

A–8

 

	 
	 	PRINCIPAL AMOUNT OF NOTES

TO BE PURCHASED

	NAME AND ADDRESS

OF PURCHASERS

	 	SERIES A NOTES
	 	SERIES B NOTES

	THE CANADA LIFE ASSURANCE COMPANY

330 University Avenue, SP-11

Toronto, Ontario, Canada M5G 1R8

Attention: Paul English, U.S. Investments Division	 	$	500,000	 	-0-

Payments

All
payments on or in respect of the Notes to be by bank wire transfer of Federal or other immediately available funds to: 

For
call or maturity payments: 

Chase
Manhattan Bank

ABA #021-000-021

Account No. 900-9-000192

Trust Account No. G08798

Reference: CUSIP, Name of Issuer and description, and call or maturity date 

For
all other payments: 

Chase
Manhattan Bank

ABA #021-000-021

Account No. 900-9-000200

Trust Account No. G08798

Reference: CUSIP, Name of Issuer and description, and Principal and Interest payment 

Notices 

Notices
with respect to payments and written confirmation of each such payment, to be addressed: 

Chase
Manhattan Bank

North American Insurance

3 Chase MetroTech Centre, 6th Floor

Brooklyn, NY 11245

Attention: Doll Balbadar 

with
a copy to: 

The
Canada Life Assurance Company

330 University Avenue, SP-12

Securities Accounting

Toronto, Ontario, Canada M5G 1R8 

All
other notices and communications (including financial statements) to be addressed as first provided above. 

Name
of Nominee in which Notes are to be issued: J. Romeo & Co. 

Taxpayer
I.D. Number: 38-0397420 

A–9

 

	 
	 	PRINCIPAL AMOUNT OF NOTES

TO BE PURCHASED

	NAME AND ADDRESS

OF PURCHASERS

	 	SERIES A NOTES
	 	SERIES B NOTES

	THE CANADA LIFE ASSURANCE COMPANY

330 University Avenue, SP-11

Toronto, Ontario, Canada M5G 1R8

Attention: Paul English, U.S. Investments Division	 	$	1,000,000	 	-0-

Payments

All
payments on or in respect of the Notes to be by bank wire transfer of Federal or other immediately available funds to: 

For
call or maturity payments: 

Chase
Manhattan Bank

ABA #021-000-021

Account No. 900-9-000192

Trust Account No. G52708

Reference: CUSIP, Name of Issuer and description, and call or maturity date 

For
all other payments: 

Chase
Manhattan Bank

ABA #021-000-021

Account No. 900-9-000200

Trust Account No. G52708

Reference: CUSIP, Name of Issuer and description, and Principal and Interest payment 

Notices 

Notices
with respect to payments and written confirmation of each such payment, to be addressed: 

Chase
Manhattan Bank

North American Insurance

3 Chase MetroTech Centre, 6th Floor

Brooklyn, NY 11245

Attention: Doll Balbadar 

with
a copy to: 

The
Canada Life Assurance Company

330 University Avenue, SP-12

Securities Accounting

Toronto, Ontario, Canada M5G 1R8 

All
other notices and communications (including financial statements) to be addressed as first provided above. 

Name
of Nominee in which Notes are to be issued: J. Romeo & Co. 

Taxpayer
I.D. Number: 38-0397420 

A–10

 

	 
	 	PRINCIPAL AMOUNT OF NOTES

TO BE PURCHASED

	NAME AND ADDRESS

OF PURCHASERS

	 	SERIES A NOTES
	 	SERIES B NOTES

	CANADA LIFE INSURANCE COMPANY OF AMERICA

c/o THE CANADA LIFE ASSURANCE COMPANY

330 University Avenue, SP-11

Toronto, Ontario, Canada M5G 1R8

Attention: Paul English, U.S. Investments Division	 	$	3,500,000	 	-0-

Payments

All
payments on or in respect of the Notes to be by bank wire transfer of Federal or other immediately available funds to: 

For
call or maturity payments: 

Chase
Manhattan Bank

ABA #021-000-021

Account No. 900-9-000192

Trust Account No. G52709

Reference: CUSIP, Name of Issuer and description, and call or maturity date 

For
all other payments: 

Chase
Manhattan Bank

ABA #021-000-021

Account No. 900-9-000200

Trust Account No. G52709

Reference: CUSIP, Name of Issuer and description, and Principal and Interest payment 

Notices 

Notices
with respect to payments and written confirmation of each such payment, to be addressed: 

Chase
Manhattan Bank

North American Insurance

3 Chase MetroTech Centre, 6th Floor

Brooklyn, NY 11245

Attention: Doll Balbadar 

with
a copy to: 

The
Canada Life Assurance Company

330 University Avenue, SP-12

Securities Accounting

Toronto, Ontario, Canada M5G 1R8 

All
other notices and communications (including financial statements) to be addressed as first provided above. 

Name
of Nominee in which Notes are to be issued: J. Romeo & Co. 

Taxpayer
I.D. Number: 38-2816473 

A–11

 
 

DEFINED TERMS

GENERAL PROVISIONS

    Where
the character or amount of any asset or liability or item of income or expense is required to be determined or any consolidation or other accounting computation is required to
be made for the purposes of this Agreement, the same shall be done in accordance with GAAP, to the extent applicable, except where such principles are inconsistent with the express requirements of
this Agreement. 

DEFINITIONS

    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. 

    "Bank Loan Agreement" means that certain Loan Agreement dated as of July 12, 1995 by and among the Company and Bank of America,
N.A. (formerly Nationsbank N.A., formerly Boatmen's National Bank of Oklahoma, formerly Bank IV Oklahoma, N.A.), individually and as agent, UMB Bank, N.A. (formerly UMB Oklahoma Bank), Fleet National
Bank (successor by merger to Summit Bank) and Bancfirst, as the same may be further amended, supplemented, modified, renewed or replaced from time to time. 

    "Banks" means each of the banks and other financial institutions which are parties to the Bank Loan Agreement from time to time. 

    "Business Day" means (a) for the purposes of Section 8.6 only, any day other than a Saturday, a Sunday or a day on which
commercial banks in New York City are required or authorized to be closed and (b) for the purposes of any other provision of this Agreement, any day other than a Saturday, a Sunday or a day on
which commercial banks in New York, New York or Dallas, Texas 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. 

    "Capital Lease Obligation" means, with respect to any Person and a Capital Lease, the amount of the obligation of such Person as the
lessee under such Capital Lease which would, in accordance with GAAP, appear as a liability on a balance sheet of such Person. 

    "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 Sonic Corp., a Delaware corporation. 

    "Confidential Information" is defined in Section 20. 

 
 

SCHEDULE B
  (to Note Purchase Agreement)    
  

 

    "Consolidated Capitalization" means, as of any date, the sum of Consolidated Debt and Consolidated Net Worth. 

    "Consolidated Debt" means, as of any date of determination, the total of all Debt of the Company and its Restricted Subsidiaries
outstanding on such date, after eliminating all offsetting debits and credits between the Company and its Restricted Subsidiaries and all other items required to be eliminated in the course of the
preparation of consolidated financial statements of the Company and its Restricted Subsidiaries in accordance with GAAP. 

    "Consolidated Income Available for Fixed Charges" means, with respect to any period, Consolidated Net Income for such period plus all
amounts deducted in the computation thereof on account of (a) Fixed Charges and (b) taxes imposed on or measured by income or excess profits. 

    "Consolidated Net Income" means, with respect to any period, the net income (or loss) of the Company and its Restricted Subsidiaries
for such period (taken as a cumulative whole), as determined in accordance with GAAP, after eliminating all offsetting debits and credits between the Company and its Restricted Subsidiaries and all
other items required to be eliminated in the course of the preparation of consolidated financial statements of the Company and its Restricted Subsidiaries in accordance with GAAP. 

    "Consolidated Net Worth" means, as of any date, (a) consolidated stockholders' equity of the Company and its Restricted
Subsidiaries on such date, determined in accordance with GAAP minus, (b) to the extent included in clause (a), all amounts properly
attributable to minority interests, if any, in the stock and surplus of Restricted Subsidiaries. 

    "Consolidated Total Assets" means, at any time, the total assets of the Company and its Restricted Subsidiaries which would be shown as
assets on a consolidated balance sheet of the Company and its Restricted Subsidiaries as of such time prepared in accordance with GAAP, after eliminating all amounts properly attributable to minority
interests, if any, in the stock and surplus of Restricted Subsidiaries. 

    "Contribution and Indemnification Agreement" means the Contribution and Indemnification Agreement dated the date of the Closing,
executed by the Company and the Guarantors (other than the Partnerships and Limited Liability Companies). 

    "Debt" means, with respect to any Person, without duplication, 

    (a) its
liabilities for borrowed money and its redemption obligations in respect of Redeemable Preferred Stock; 

    (b) its
liabilities for the deferred purchase price of property acquired by such Person (excluding accounts payable arising in the ordinary course of business but
including, without limitation, all liabilities created or arising under any conditional sale or other title retention agreement with respect to any such property); 

    (c) its
Capital 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 valued (i) in the case of letters of credit supporting obligations for borrowed money, at the face amount of such letters of credit and (ii) in the case of other letters of
credit, at the amount drawn on such letters of credit at such time and not reimbursed; and 

B–2

 

    (f)  any Guaranty of such Person with respect to liabilities of a type described in any of clauses (a) through (e) hereof. 

Debt
of any Person shall include all obligations of such Person of the character described in clauses (a) through (f) to the extent such Person remains legally liable in respect thereof
notwithstanding that any such obligation is deemed to be extinguished under GAAP, and shall not include any such obligations that have been legally defeased. 

    "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. 

    "Default Rate" with respect to a series of Notes, means that rate of interest that is the greater of (i) 2% per annum above the
rate of interest stated in clause (a) of the first paragraph of such series of Notes
or (ii) 2% over the rate of interest publicly announced by The Chase Manhattan Bank in New York, New York as its "base" or "prime" rate. 

    "Distribution" means, in respect of any corporation, association or other business entity: 

    (a) dividends
or other distributions or payments on capital stock or other equity interest of such corporation, association or other business entity (except
distributions in such stock or other equity interest); and 

    (b) the
redemption or acquisition of such stock or other equity interests or of warrants, rights or other options to purchase such stock or other equity interests
(except when solely in exchange for such stock or other equity interests) unless made, contemporaneously, from the net proceeds of a sale of such stock or other equity interests. 

    "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" of any Person means any trade or business (whether or not incorporated) that is treated as a single employer together
with such Person 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. 

    "Fixed Charges" means, with respect to any period, the sum of (a) Interest Charges for such period and (b) Lease Rentals
for such period. 

    "Fixed Charges Coverage Ratio" means, at any time, the ratio of (a) Consolidated Income Available for Fixed Charges for the
fiscal year ending on, or most recently ended prior to, such time to (b) Fixed Charges for such fiscal year. 

    "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 

B–3

 

    (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. 

    "Guarantors" means each of Sonic Restaurants, Sonic Industries, Inc., an Oklahoma corporation, America's Drive-In
Corp., a Nevada corporation, America's Drive-In Trust, a Pennsylvania business trust, each other Subsidiary of the Company as of the date of the Closing and any Person that is required to
execute and deliver a Guaranty Agreement pursuant to Section 9.6 after the date of the Closing. 

    "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. 

    "Guaranty Agreement" means (a) in the case of the Guarantors other than the Partnerships and the Limited Liability Companies, a
Guaranty Agreement in favor of the Noteholders in the form attached hereto as Exhibit 2-A, (b) in the case of the Partnerships, a Guaranty Agreement in favor of the
Noteholders in the form attached hereto as Exhibit 2-B, and (c) in the case of the Limited Liability Companies, a Guaranty Agreement in favor of the Noteholders in the form
attached hereto as Exhibit 2-C. 

    "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 polychlorinated 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. 

    "Institutional Investor" means (a) any original purchaser of a Note, (b) any holder of a Note holding more than 5% 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 

B–4

 

investment company, any insurance company, any broker or dealer, or any other similar financial institution or entity, regardless of legal form. 

    "Intercreditor Agreement" is defined in Section 2(c). 

    "Interest Charges" means, with respect to any period, the sum (without duplication) of the following (in each case, eliminating all
offsetting debits and credits between the Company and its Restricted Subsidiaries and all other items required to be eliminated in the course of the preparation of consolidated financial statements of
the Company and its Restricted Subsidiaries in accordance with GAAP): (a) all interest in respect of Debt of the Company and its Restricted Subsidiaries (including imputed interest on Capital
Lease Obligations) deducted in determining Consolidated Net Income for such period, and (b) all debt discount and expense amortized or required to be amortized in the determination of
Consolidated Net Income for such period. 

    "Investment" means any investment, made in cash or by delivery of property, by the Company or any of its Restricted Subsidiaries
(a) in any Person, whether by acquisition of stock, Debt or other obligation or Security, or by loan, Guaranty, advance, capital contribution or otherwise, or (b) in any property. 

    "Lease Rentals" means, with respect to any period, the sum of the minimum amount of rental and other obligations required to be paid
during such period by the Company or any Restricted Subsidiary 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) (a) which are on
account of maintenance and repairs, insurance, taxes, assessments, water rates and similar charges, or (b) which are based on profits, revenues or sales realized by the lessee from the leased
property or otherwise based on the performance of the lessee. 

    "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). 

    "Limited Liability Companies" means Subsidiaries which are limited liability companies. 

    "Make-Whole Amount" is defined in Section 8.6. 

    "Material" means material in relation to the business, operations, affairs, financial condition, assets, properties, or prospects of
the Company and its Restricted Subsidiaries, taken as a whole. 

    "Material Adverse Effect" means a material adverse effect on (a) the business, operations, affairs, financial condition, assets
or properties of the Company and its Restricted Subsidiaries, taken as a whole, or (b) the ability of the Company to perform its obligations under this Agreement, the Other Agreements and the
Notes, or (c) the ability of any Guarantor to perform its obligations under the Guaranty Agreement to which it is a party, or (d) the validity or enforceability of this Agreement, the
Other Agreements, any Guaranty Agreement, the Intercreditor Agreement or the Notes. 

    "Material Subsidiary" means any Subsidiary (a) whose total assets, as of the last day of the immediately preceding fiscal
quarter, are equal to or greater than five percent (5%) of the Consolidated Total Assets of the Company and its Subsidiaries as of such date determined in accordance with GAAP or (b) whose
total net income for the period of the immediately preceding four fiscal quarters is equal to or greater than five percent (5%) of consolidated net income of the Company and its Subsidiaries for such
period determined in accordance with GAAP, in each case as reflected in the most recent annual or quarterly financial statements of the Company and its Subsidiaries. 

    "Memorandum" is defined in Section 5.3. 

B–5

 

    "Multiemployer Plan" means any Plan that is a "multiemployer plan" (as such term is defined in Section 4001(a)(3) of ERISA). 

    "1998 Note Agreements" means the separate Note Purchase Agreements dated as of April 1, 1998 between the Company and each of
Pacific Life Insurance Company, MONY Life Insurance Company of America, Massachusetts Mutual Life Insurance Company, CM Life Insurance Company, MML Bay State Life Insurance Company, The Travelers
Insurance Company, Canada Life Insurance Company of America and Nationwide Life Insurance Company, as the same may be amended, supplemented, modified, renewed or replaced from time to time. 

    "1998 Noteholders" means each of the holders of notes under the 1998 Note Agreements. 

    "Notes" is defined in Section 1. 

    "Officer's Certificate" means a certificate of a Senior Financial Officer or of any other officer of the Company or a Guarantor, as the
case may be, whose responsibilities extend to the subject matter of such certificate. 

    "Other Agreements" is defined in Section 2. 

    "Other Purchasers" is defined in Section 2. 

    "Partnerships" means Subsidiaries which are partnerships. 

    "PBGC" means the Pension Benefit Guaranty Corporation referred to and defined in ERISA or any successor thereto. 

    "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 of the Company or with
respect to which the Company or any ERISA Affiliate of the Company may have any liability. 

    "Preferred Stock" means any class of capital stock of a corporation that is preferred over any other class of capital stock of such
corporation as to the payment of dividends or the payment of any amount upon liquidation or dissolution of such corporation. 

    "Priority Debt" means, as of any date, the sum (without duplication) of (a) outstanding Debt of Restricted Subsidiaries that are
not Guarantors (other than Debt owed to the Company or another Restricted Subsidiary and Debt of a Person outstanding at the time it becomes a Restricted Subsidiary) and (b) Debt of the Company
and its Restricted Subsidiaries secured by Liens pursuant to Section 10.6(h). 

    "property" or "properties" means, unless otherwise specifically limited, real or
personal property of any kind, tangible or intangible, choate or inchoate. 

    "PTE" is defined in Section 6.2(a). 

    "QPAM Exemption" means Prohibited Transaction Class Exemption 84-14 issued by the United States Department of Labor. 

    "Redeemable" means, with respect to the capital stock of any Person, each share of such Person's capital stock that is: 

    (a) redeemable,
payable or required to be purchased or otherwise retired or extinguished, or convertible into Debt of such Person (i) at a fixed or determinable
date, whether by operation of 

B–6

 

sinking fund or otherwise, (ii) at the option of any Person other than such Person, or (iii) upon the occurrence of a condition not solely within the control of such Person; or 

    (b) convertible
into other Redeemable capital stock. 

    "Required Holders" means, at any time, the holders of more than 50% in principal amount of the Notes at the time outstanding (exclusive
of Notes then owned by the Company or any of its Affiliates). 

    "Responsible Officer" means any Senior Financial Officer and any other officer of the Company or a Guarantor, as the case may be, with
responsibility for the administration of the relevant portion of this agreement. 

    "Restricted Investments" means all Investments of the Company and its Restricted Subsidiaries, other than: 

    (a) property
or assets to be used or consumed in the ordinary course of business; 

    (b) current
assets arising from the sale of goods or services in the ordinary course of business; 

    (c) Investments
in Restricted Subsidiaries or in any Person that, as a result thereof, becomes a Restricted Subsidiary; 

    (d) Investments
existing as of the date of this Agreement that are listed in the attached Schedule C; 

    (e) Investments
in treasury stock of the Company or such Restricted Subsidiary; and 

    (f)  Investments
in: 

    (i)  obligations,
with a duration of one year or less from the date of acquisition, of or fully guaranteed by the United States of America or an agency thereof or by
Canada or a province thereof; 

    (ii) state
or municipal securities, with a duration of one year or less from the date of acquisition, that are rated in one of the top two rating classifications by at
least one nationally recognized rating agency; 

    (iii) certificates
of deposit or banker's acceptances maturing within one year from the date of acquisition of or issued by Bank of America or other commercial banks
organized under the laws of the United States of America or any State thereof and whose long-term unsecured debt obligations (or the long-term unsecured debt obligations of the
bank holding company owning all of the capital stock of such bank) are rated in one of the top two rating classifications by at least one nationally recognized rating agency; 

    (iv) commercial
paper maturing within 270 days from the date of issuance that, at the time of acquisition, is rated in one of the top two rating classifications
by at least one credit rating agency of recognized national standing; 

    (v) repurchase
agreements, having a term of not more than 90 days and fully collateralized with obligations of the type described in clause (i), with a
bank satisfying the requirements of clause (iii); and 

    (vi) money
market instrument programs or registered investment companies that invest in securities of the type described in this clause (f) that are properly
classified as current assets in accordance with GAAP. 

    "Restricted Payment" means any Distribution in respect of the Company or any Restricted Subsidiary (other than on account of capital
stock or other equity interests of a Restricted Subsidiary 

B–7

 

owned legally and beneficially by the Company or another Restricted Subsidiary), including, without limitation, any Distribution resulting in the acquisition by the Company of Securities which would
constitute treasury stock. For purposes of this Agreement, the amount of any Restricted Payment made in property shall be the greater of (x) the fair market value of such property (as
determined in good faith by the board of directors (or equivalent governing body) of the Person making such Restricted Payment) and (y) the net book value thereof on the books of such Person,
in each case determined as of the date on which such Restricted Payment is made. 

    "Restricted Subsidiary" means any Subsidiary which is not an Unrestricted Subsidiary. 

    "Securities Act" means the Securities Act of 1933, as amended from time to time. 

    "Security" has the meaning set forth in Section 2(l) of the Securities Act. 

    "Senior Financial Officer" means the chief financial officer, principal accounting officer, treasurer or comptroller of the Company or
a Guarantor, as the case may be. 

    "Series A Notes" is defined in Section 1. 

    "Series B Notes" is defined in Section 1. 

    "Sonic Restaurants" is defined in Section 4.3(e). 

    "Source" is defined in Section 6.2. 

    "Subsidiary" means, as to any Person, any corporation, association or other business entity in which such Person or one or more of its
Subsidiaries or such Person and one or more of its Subsidiaries owns
sufficient equity or voting interests to enable it or them (as a group) ordinarily, in the absence of contingencies, to elect a majority of the directors (or Persons performing similar functions) of
such entity, and any partnership or joint venture if more than a 50% interest in the profits or capital thereof is owned by such Person or one or more of its Subsidiaries or such Person and one or
more of its Subsidiaries (unless such partnership can and does ordinarily take major business actions without the prior approval of such Person or 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. 

    "Unrestricted Subsidiary" means any Subsidiary which is properly designated an Unrestricted Subsidiary on Schedule 5.4 or in the
most recent notice with respect to such Subsidiary given by the Company pursuant to Section 10.12. 

    "Wholly-Owned Restricted Subsidiary" means, at any time, any Restricted Subsidiary one hundred percent (100%) of 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 Restricted Subsidiaries at such time. 

B–8

 
 

EXISTING INVESTMENTS

 
 

None.    

 
 

SCHEDULE C
  (to Note Purchase Agreement)

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