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EXHIBIT 4.2
ROMACORP, INC.
$75,000,000 AGGREGATE PRINCIPAL AMOUNT
OF
12% SENIOR NOTES DUE 2006
PURCHASE AGREEMENT
June 26, 1998
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ BROTHERS INC
▇▇▇▇▇▇▇▇ & CO. INC.
c/o Salomon Brothers Inc
Seven ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
ROMACORP OPERATING COMPANY, INC., a Delaware corporation (to be
renamed Romacorp, Inc.) (the "Company"), proposes, upon the terms and conditions
set forth herein, to issue and sell to Salomon Brothers Inc and ▇▇▇▇▇▇▇▇ & Co.
Inc. (the "Initial Purchasers") $75,000,000 aggregate principal amount of its
12% Senior Notes due 2006 (the "Notes"). The Notes will be guaranteed (each, a
"Guarantee") on a senior basis by each of ROMA FRANCHISE CORPORATION, a Delaware
corporation, ROMA SYSTEMS, INC., a Delaware corporation, ROMA DINING LP, a
Delaware limited partnership, ROMA HOLDINGS, INC., a Delaware corporation, ROMA
HUNTINGTON BEACH, INC., a Delaware corporation, ROMA BAR MANAGEMENT CORPORATION
a Texas corporation and ROMA FORT WORTH, INC., a Texas corporation, (each, a
"Guarantor"). The Notes and the Guarantees are referred to herein as the
"Securities." The Notes will be issued pursuant to an indenture, to be dated as
of July 1, 1998 (the "Indenture"), among the Company, the Guarantors and United
States Trust Company of New York, as trustee (the "Trustee").
The Company and the Guarantors (collectively, the "Issuers") wish to
confirm as follows their agreement with the Initial Purchasers in connection
with the purchase and resale of the Securities.
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1. Preliminary Offering Memorandum and Offering Memorandum. The
Securities will be offered and sold to the Initial Purchasers without
registration under the Securities Act of 1933, as amended (the "Act"), in
reliance on an exemption pursuant to Section 4(2) under the Act and the rules
and regulations promulgated thereunder. The Issuers have prepared a preliminary
offering memorandum, dated June 5, 1998 (the "Preliminary Offering Memorandum"),
and an offering memorandum, dated June 26, 1998 (the "Offering Memorandum"),
setting forth information regarding the Issuers and the Securities. Unless
stated herein to the contrary, all references herein to the Offering Memorandum
are to the Offering Memorandum at the date thereof and are not meant to include
any supplement or amendment subsequent thereto. The Issuers hereby confirm that
they have authorized the use of the Preliminary Offering Memorandum and the
Offering Memorandum in connection with the offering and resale of the Securities
by the Initial Purchaser on the terms and subject to the conditions set forth
herein.
The Issuers understand that the Initial Purchasers propose to make
offers and sales ("Exempt Resales") of the Securities purchased by the Initial
Purchasers hereunder only on the terms and in the manner set forth in the
Offering Memorandum and Section 2 hereof, as soon as the Initial Purchasers deem
advisable after this Agreement has been executed and delivered, (i) to persons
in the United States whom the Initial Purchaser reasonably believes to be
qualified institutional buyers ("Qualified Institutional Buyers") as defined in
Rule 144A under the Act, as such rule may be amended from time to time ("Rule
144A"), in transactions under Rule 144A and (ii) outside the United States to
persons other than U.S. persons in reliance upon and in compliance with
Regulation S under the Act, as such regulation may be amended from time to time
("Regulation S"). The persons specified in clauses (i) and (ii) are referred to
herein as the "Eligible Purchasers." As used herein, the terms "United States"
and "U.S. persons" have the respective meanings given them in Regulation S.
It is understood and acknowledged that upon original issuance
thereof, and until such time as the same is no longer required under the
applicable requirements of the Act, each of the Notes (and each security issued
in exchange therefor or in substitution thereof) shall bear the following
legend:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR
SOLD EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION
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HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR
(B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE
501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT (AN "ACCREDITED
INVESTOR")) OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY
IN AN OFFSHORE TRANSACTION, (2) AGREES THAT IT WILL NOT WITHIN TWO YEARS
AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY RESELL OR OTHERWISE TRANSFER
THIS SECURITY EXCEPT (A) TO THE ISSUER OR ANY SUBSIDIARY THEREOF, (B)
INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE
WITH RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO
AN ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE
TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
(THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE), (D) OUTSIDE
THE UNITED STATES TO PERSONS OTHER THAN U.S. PERSONS IN OFFSHORE
TRANSACTIONS MEETING THE REQUIREMENTS OF RULE 904 UNDER REGULATION S UNDER
THE SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION
PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (F)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT
AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS SECURITY IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. AS USED
HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S.
PERSON" HAVE THE RESPECTIVE MEANINGS GIVEN TO THEM BY REGULATION S UNDER
THE SECURITIES ACT.
It is also understood and acknowledged that holders (including
subsequent transferees) of the Notes will have the registration rights set forth
in the registration rights agreement (the "Registration Rights Agreement")
substantially in the form attached hereto as Exhibit A to be dated as of the
Closing Date (as defined) by and among the Company, the Guarantors and the
Initial Purchasers.
2. Agreements to Sell, Purchase and Resell.
(a) Upon the basis of the representations, warranties and agreements
of the Initial Purchasers herein contained and subject to all the terms and
conditions set forth herein, the Company hereby agrees to issue and sell the
Notes to the Initial Purchasers and, upon the basis of the representations,
warranties and agreements of the Issuers herein contained and
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subject to all the terms and conditions set forth herein, each Initial
Purchaser, severally and not jointly, agrees to purchase from the Company that
principal amount of Notes set forth opposite the name of such Initial Purchaser
on Schedule I attached hereto at a purchase price of 97% of the principal amount
thereof.
(b) Each Initial Purchaser represents and warrants to the Issuers
that it is a Qualified Institutional Buyer with such knowledge and experience in
financial and business matters as are necessary to evaluate the merits and risks
of an investment in the Securities, it believes it has received all of the
information it considers necessary or appropriate for deciding whether to make
an investment in the Securities, and has advised the Issuers that it proposes to
offer the Securities for resale upon the terms and conditions set forth in this
Agreement and in the Offering Memorandum in Exempt Resales. Each Initial
Purchaser hereby represents and warrants to, and agrees with, the Issuers that
it (i) will not solicit offers for, or offer to sell, the Securities by means of
any form of general solicitation or general advertising or in any manner
involving a public offering within the meaning of Section 4(2) of the Act
(including, but not limited to, (A) any advertisement, article, notice or other
communication published in any newspaper, magazine or similar media or broadcast
over television or radio, or (B) any seminar or meeting whose attendees have
been invited by any general solicitation or general advertising; provided,
however, that such limitation shall not preclude the Initial Purchasers from
placing any tombstone announcement with respect to the resale by the Initial
Purchasers of the Securities, provided that such announcement is not prohibited
by (and is in compliance with) Regulation S), and (ii) will solicit offers for
the Securities only from, and will offer, sell or deliver the Securities as part
of its initial offering, only to (A) persons in the United States whom such
Initial Purchaser reasonably believes to be Qualified Institutional Buyers, or
if any such person is buying for one or more institutional accounts for which
such person is acting as fiduciary or agent, only when such person has
represented to such Initial Purchaser that each such account is a Qualified
Institutional Buyer, to whom notice has been given that such sale or delivery is
being made in reliance on Rule 144A, in each case, in transactions under Rule
144A and (B) outside the United States to persons other than U.S. persons in
reliance on Regulation S. Each Initial Purchaser has advised the Company that it
will offer the Notes to Eligible Purchasers at a price initially equal to 100%
of the principal amount thereof, plus accrued interest, if any, from July 1,
1998.
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(c) Each Initial Purchaser represents and warrants that (i) it has
not offered or sold, and will not offer or sell, directly or indirectly, any of
the Securities in the United Kingdom by means of any document, other than to
persons whose ordinary business it is to buy or sell shares or debentures
whether as principal or agent (except in circumstances which do not constitute
an offer to the public within the meaning of the Companies Act 1985), (ii) it
has complied with and will comply with all applicable provisions of the
Financial Services ▇▇▇ ▇▇▇▇ with respect to anything done by such Initial
Purchaser in relation to the Securities in, from or otherwise involving the
United Kingdom and (iii) it has only issued or passed on and will only issue or
pass on in or from the United Kingdom to any persons any document received by
such Initial Purchaser in connection with the issue of the Securities if the
recipient is of a kind described in Article 9(3) of the Financial Services ▇▇▇
▇▇▇▇ (Investment Advertisements) (Exemptions) Order 1988, as amended.
(d) Each Initial Purchaser represents and warrants that with respect
to Securities offered and sold or to be offered and sold pursuant to Regulation
S it has offered and sold the Securities and agrees that it will offer and sell
the Securities (i) as part of its initial distribution at any time and (ii)
otherwise until 40 days after the later of the commencement of the offering of
the Securities and the Closing Date, only in accordance with Rule 903 of
Regulation S. Accordingly, each Initial Purchaser represents, warrants and
agrees that with respect to Securities offered and sold or to be offered and
sold pursuant to Regulation S none of it, its affiliates or any persons acting
on its behalf or on behalf of its affiliates have engaged or will engage in any
directed selling efforts in the United States with respect to the Securities,
and it and its affiliates have complied and will comply with the offering
restrictions requirements of Regulation S. Each Initial Purchaser agrees that,
at or prior to confirmation of any sale of Securities pursuant to Regulation S,
it will have sent to each distributor, dealer or person receiving a selling
concession, fee or other remuneration that purchases such Securities from it
during the restricted period a confirmation or notice to substantially the
following effect:
The Securities covered hereby have not been registered under the U.S.
Securities Act of 1933, as amended (the "Securities Act"), and may not be
offered and sold within the United States or to, or for the account or
benefit of, U.S. persons (i) as part of their initial distribution at any
time or
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(ii) otherwise until 40 days after the later of the commencement of the
offering and the Closing Date, except in either case in accordance with
Regulation S or Rule 144A under the Securities Act. Terms used above have
the respective meanings given to them in Regulation S under the Securities
Act.
Each Initial Purchaser understands that the Issuers and, for the
purposes of the opinions to be delivered to the Initial Purchasers pursuant to
Section 7(d) and 7(e) hereof, counsel to the Issuers and counsel to the Initial
Purchasers will rely upon the accuracy and truth of the foregoing
representations and agreements and each Initial Purchaser hereby consents to
such reliance.
3. Delivery of the Securities and Payment Therefor. Delivery to the
Initial Purchasers of and payment for the Securities shall be made at the office
of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ at 9:00 A.M., New
York City time, on July 1, 1998 (the "Closing Date"). The place of closing for
the Securities and the Closing Date may be varied by agreement between the
Initial Purchasers and the Company.
The Securities will be delivered to the Initial Purchasers against
payment of the purchase price therefor by federal funds certified check or wire
transfer, in each case, of immediately available funds payable in accordance
with written instructions from the Company. The Securities will be evidenced by
one or more global securities (each, a "Global Security") and/or by additional
certificated securities, and will be registered, in the case of a Global
Security, in the name of Cede & Co. as nominee of The Depository Trust Company
("DTC"), and in the other cases, in such names and in such denominations as the
Initial Purchasers shall request prior to 1:00 p.m., New York City time, on the
business day preceding the Closing Date. The Securities to be delivered to the
Initial Purchasers shall be made available to the Initial Purchasers in New York
City for inspection and packaging not later than 9:30 a.m., New York City time,
on the business day next preceding the Closing Date.
4. Agreements of the Issuers. The Issuers agree with the Initial
Purchasers as follows:
(a) Until the completion of the distribution of the Securities by
the Initial Purchasers to Eligible Purchasers, the Issuers will advise the
Initial Purchasers promptly and, if requested, will confirm such advice in
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writing, of any material adverse change in the condition (financial or
other), business, properties, net worth or results of operations of the
Company and its Subsidiaries (as defined), taken as a whole, or (y) of the
happening of any event or the existence of any condition which requires
any amendment or supplement to the Offering Memorandum (as then amended or
supplemented) so that the Offering Memorandum (x) will not contain any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading, or (y) will comply with applicable law.
(b) The Issuers will furnish to the Initial Purchasers, without
charge, such number of copies of the Offering Memorandum, as they may then
be amended or supplemented, as they may reasonably request.
(c) The Issuers will not make any amendment or supplement to the
Preliminary Offering Memorandum or to the Offering Memorandum of which the
Initial Purchasers shall not previously have been advised or to which they
shall object in writing after being so advised unless, in the opinion of
counsel to the Issuers, such amendment or supplement is necessary to
comply with applicable law.
(d) Prior to the execution and delivery of this Agreement, the
Issuers have delivered or will deliver to the Initial Purchasers, without
charge, in such reasonable quantities as the Initial Purchasers shall have
requested or may hereafter request, copies of the Preliminary Offering
Memorandum. The Issuers consent to the use, in accordance with the
securities or Blue Sky laws of the jurisdictions in which the Securities
are offered by the Initial Purchasers and by dealers, prior to the date of
the Offering Memorandum, of each Preliminary Offering Memorandum so
furnished by the Issuers. The Issuers consent to the use of the Offering
Memorandum (and of any amendment or supplement thereto prepared in
accordance with Section 4(c)) in accordance with the securities or Blue
Sky laws of the jurisdictions in which the Securities are offered by the
Initial Purchasers and by all dealers to whom Securities may be sold, in
connection with the offering and sale of the Securities.
(e) If, at any time prior to completion of the distribution of the
Securities by the Initial Purchasers to
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Eligible Purchasers, any event shall occur or condition shall exist that
in the judgment of the Issuers or in the opinion of the Initial Purchasers
based on advice of counsel requires any amendment or supplement to the
Offering Memorandum (as then amended or supplemented) so that the Offering
Memorandum (x) will not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading, or (y) will comply with applicable
law, the Issuers will, in each such case subject to Section 4(c),
forthwith prepare an appropriate supplement or amendment thereto, and will
expeditiously furnish to the Initial Purchasers that number of copies
thereof as they shall reasonably request.
(f) The Issuers will cooperate with the Initial Purchasers and with
their counsel in connection with the qualification of the Securities for
offering and sale by the Initial Purchasers and by dealers under the
securities or Blue Sky laws of such jurisdictions as the Initial
Purchasers may designate and will file such consents to service of process
or other documents necessary or appropriate in order to effect such
qualification; provided that in no event shall an Issuer be obligated to
qualify to do business in any jurisdiction where it is not now so
qualified or to take any action which would subject it to general service
of process in any jurisdiction where it is not now so subject.
(g) So long as any of the Securities are outstanding, the Company
will furnish to the Initial Purchasers (i) as soon as reasonably
practicable, a copy of each report of the Company filed with the
Securities and Exchange Commission (the "Commission") and (ii) from time
to time such other information concerning the Issuers as the Initial
Purchasers may reasonably request.
(h) The Issuers will apply the proceeds from the sale of the
Securities in accordance with the description set forth under "Use of
Proceeds" in the Offering Memorandum.
(i) The Issuers have not taken, nor will they take, directly or
indirectly, any action designed to or that might reasonably be expected to
cause or result in stabilization or manipulation of the price of the
Securities to facilitate the sale or resale of the Securities. Except
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as permitted by the Act, the Issuers will not distribute any offering
material in connection with the Exempt Resales. Except following the
effectiveness of an Exchange Offer Registration Statement or a Shelf
Registration Statement (each as defined in the Registration Rights
Agreements), the Issuers will not solicit any offers to buy and will not
offer to sell the Securities by means of any form of general solicitation
or general advertising (within the meaning of Regulation D under the Act)
or by means of any directed selling efforts (as defined under Regulation S
and the Commission's releases related thereto).
(j) The Issuers will assist the Initial Purchasers in causing the
Securities to be eligible for trading on the PORTAL market.
(k) From and after the Closing Date, so long as any of the
Securities are outstanding and are "restricted securities" within the
meaning of Rule 144(a)(3) under the Act or, if earlier, until two years
after the Closing Date, and during any period in which the Company is not
subject to Section 13 or 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), the Company will furnish to holders of the
Securities and prospective purchasers of Securities designated by such
holders, upon request of such holders or such prospective purchasers, the
information required to be delivered pursuant to Rule 144A(d)(4) under the
Act to permit compliance with Rule 144A in connection with resales of the
Securities.
(l) The Issuers agree not to sell, offer for sale or solicit offers
to buy or otherwise negotiate in respect of any security (as defined in
the Act) that would be integrated with the sale of the Securities in a
manner that would require the registration under the Act of the sale by
the Issuers to the Initial Purchasers or by the Initial Purchasers to the
Eligible Purchasers of the Securities.
(m) The Issuers agree to comply with all of the terms and conditions
of the Registration Rights Agreement, and all agreements set forth in the
representation letters of the Issuers to DTC relating to the approval of
the Securities by DTC for "book entry" transfer.
(n) The Issuers agree that not later than any registration of the
Securities pursuant to the Registration Rights Agreement, or at such
earlier time as may be so re-
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quired, the Issuers shall use their best efforts to cause the Indenture to
be qualified under the Trust Indenture Act of 1939 (the "1939 Act") and
will cause to be entered into any necessary supplemental indentures in
connection therewith.
(o) The Issuers shall not resell any Securities that have been
acquired by them.
(p) Prior to the Closing Date, the Company will furnish to the
Initial Purchasers, as soon as reasonably practicable after they have been
prepared, a copy of any unaudited interim consolidated financial
statements of the Company for any period subsequent to the period covered
by the most recent consolidated financial statements of the Company
appearing in the Offering Memorandum.
5. Representations and Warranties of the Issuers. The Issuers,
jointly and severally, represent and warrant to the Initial Purchasers that:
(a) No order or decree preventing the use of the Preliminary
Offering Memorandum or the Offering Memorandum or any amendment or
supplement thereto, or any order asserting that the transactions
contemplated by this Agreement are subject to the registration
requirements of the Act, has been issued and no proceeding for any such
purpose has been commenced or is pending or, to the knowledge of the
Issuers, is threatened.
(b) The Preliminary Offering Memorandum and the Offering Memorandum,
as of their respective dates, and the Offering Memorandum, as of the
Closing Date, did not or will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that this
representation and warranty does not apply to statements in the
Preliminary Offering Memorandum and Offering Memorandum made in reliance
upon and in conformity with information relating to the Initial Purchasers
furnished to the Issuers in writing by the Initial Purchasers through
Salomon Brothers Inc expressly for use therein.
(c) As of the Closing Date, the Indenture will have been duly and
validly authorized by the Company and the Guarantors and, upon its
execution and delivery by the
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Company and the Guarantors, and assuming due authorization, execution and
delivery by the Trustee, will be a valid and binding agreement of the
Company and the Guarantors, enforceable in accordance with its terms,
except as enforcement thereof may be limited by bankruptcy, insolvency or
other similar laws affecting the enforcement of creditors' rights
generally and subject to the applicability of general principles of
equity; the Indenture conforms in all material respects to the description
thereof in the Offering Memorandum; and no qualification of the Indenture
under the 1939 Act is required in connection with the offer and sale of
the Securities contemplated hereby or in connection with the Exempt
Resales.
(d) As of the Closing Date, the Notes and the Guarantees will have
been duly authorized by the Company and the Guarantors, respectively, and,
when executed by the Company and the Guarantors, respectively, and (in the
case of the Notes) authenticated by the Trustee in accordance with the
Indenture and delivered to the Initial Purchasers against payment therefor
in accordance with the terms hereof, will have been validly issued and
delivered, and will constitute valid and binding obligations of the
Company and the Guarantors respectively, entitled to the benefits of the
Indenture and enforceable in accordance with their terms, except as
enforcement thereof may be limited by bankruptcy, insolvency or other
similar laws affecting the enforcement of creditors' rights generally and
subject to the applicability of general principles of equity; and the
Notes and the Guarantees conform in all material respects to the
description thereof in the Offering Memorandum.
(e) [Intentionally Omitted]
(f) [Intentionally Omitted]
(g) Each direct and indirect subsidiary of the Company is set forth
on Schedule II attached hereto (each, a "Subsidiary"). All the outstanding
shares of capital stock of the Company and each Subsidiary have been duly
authorized and validly issued, are fully paid and nonassessable and are
free of any preemptive or similar rights.
(h) Each of the Company and the Subsidiaries is a corporation or
partnership duly organized, validly existing and in good standing under
the laws of its jurisdiction of incorporation or formation with full
corporate or
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partnership power and authority to own, lease and operate its properties
and to conduct its business as described in the Offering Memorandum, and
is duly registered and qualified to conduct its business and is in good
standing in each jurisdiction where the nature of its properties or the
conduct of its business requires such registration or qualification,
except where the failure so to register or qualify would not reasonably be
expected to have a material adverse effect on the condition (financial or
other), business, properties net worth or results of operations of the
Company and the Subsidiaries, taken as a whole (a "Material Adverse
Effect").
(i) There are no legal or governmental proceedings pending against
the Company or any Subsidiary or, to the knowledge of the Issuers,
threatened against any of them or to which the Company or any Subsidiary
or to which any of the respective properties of the Company or any
Subsidiary is subject which are not disclosed in the Offering Memorandum
and which, if adversely decided, would cause a Material Adverse Effect or
materially adversely affect the issuance of the Securities or the
consummation of any of the transactions contemplated by this Agreement,
the Indenture, the Securities or the Registration Rights Agreement
(collectively, the "Transaction Documents"). There are no agreements,
contracts, indentures, leases or other instruments of the Company or any
Subsidiary that are material to the Company and the Subsidiaries, taken as
a whole, which are not described in the Offering Memorandum. Except as
disclosed in the Offering Memorandum, none of the Company or any
Subsidiary is involved in any strike, job action or labor dispute with any
group of its employees which would reasonably be expected to have a
Material Adverse Effect, and, to the knowledge of the Issuers, no such
action or dispute is threatened.
(j) None of the Company or any Subsidiary is (x) in violation of its
certificate or articles of incorporation or by laws or other
organizational documents, or of any law, ordinance, administrative or
governmental rule or regulation applicable to it or of any decree of any
court or governmental agency or body having jurisdiction over it, except
where any such violation or violations in the aggregate could not
reasonably be expected to have a Material Adverse Effect, or (y) in
default in the performance of any obligation, agreement or condition
contained in any bond, debenture, note or any other evidence of
indebtedness or in any agreement, indenture, lease or other in-
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strument to which the Company or any Subsidiary is a party or by which any
of them or any of their respective properties may be bound, except as
disclosed in the Offering Memorandum or where any such default or defaults
in the aggregate would not reasonably be expected to have a Material
Adverse Effect.
(k) None of (x) the issuance, offer, sale or delivery of the
Securities, (y) the execution, delivery or performance of the Transaction
Documents by the Company or any Subsidiary to the extent a party thereto,
or (z) the consummation by the Company or any Subsidiary of the
transactions contemplated hereby or thereby (i) requires any consent,
approval, authorization or other order of, or registration or filing with
(each, a "Consent"), any court, regulatory body, administrative agency or
other governmental body, agency or official (except such Consents as may
have been obtained or may be required in connection with the registration
under the Act of the Securities in accordance with the Registration Rights
Agreement, the qualification of the Indentures under the 1939 Act and
except for compliance with the securities or Blue Sky laws of various
jurisdictions or the failure to obtain which could not reasonably be
expected to have a Material Adverse Effect or materially adversely affect
the consummation of the transactions contemplated by the Transaction
Documents) or conflicts or will conflict with or constitutes or will
constitute a breach of, or a default under, the certificate or articles of
incorporation or bylaws, or other organizational documents, of the Company
or any Subsidiary, except any such conflicts and breaches that in the
aggregate could not reasonably be expected to have a Material Adverse
Effect, or (ii) conflicts or will conflict with or constitutes or will
constitute a breach of, or a default under, any agreement, indenture,
lease or other instrument to which the Company or any Subsidiary is a
party or by which any of them or any of their respective properties may be
bound, except as disclosed in the Offering Memorandum or any such
conflicts, breaches or defaults that in the aggregate could not reasonably
be expected to have a Material Adverse Effect, or (iii) violates or will
violate any statute, law, regulation or judgment, injunction, order or
decree applicable to the Company or any Subsidiary or any of their
respective properties, except any such violations that in the aggregate
could not reasonably be expected to have a Material Adverse Effect, or
(iv) will result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of
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the Company or any Subsidiary pursuant to the terms of any agreement or
instrument to which any of them is a party or by which any of them may be
bound or to which any of their property or assets is subject, other than
liens, charges and encumbrances disclosed in the Offering Memorandum or
which could not in the aggregate be expected to have a Material Adverse
Effect.
(l) To the Issuers' knowledge, Ernst & Young LLP, who have certified
the financial statements included as part of the Offering Memorandum, are
independent public accountants under Rule 101 of the AICPA's Code of
Professional Conduct and its interpretations and rulings.
(m) The financial statements of the Company included in the Offering
Memorandum, together with the related notes thereto, present fairly the
financial position, results of operations and cash flows of the Company at
the dates and for the periods to which they relate, and have been prepared
in accordance with generally accepted accounting principles applied on a
consistent basis ("GAAP"). The pro forma financial statements and other
pro forma financial information (including the notes thereto) included in
the Offering Memorandum (A) present fairly on the basis stated the
information shown therein, (B) have been prepared in accordance with
applicable requirements of Rule 11-02 of Regulation S-X promulgated under
the Act and (C) have been properly computed on the basis described
therein. The assumptions used in the preparation of the pro forma
financial statements and other pro forma financial information included in
the Offering Memorandum are reasonable and the adjustments used therein
are appropriate to give effect to the transactions or circumstances
referred to therein.
(n) Each of the Company and the Guarantors has all the requisite
corporate power and authority to execute, deliver and perform its
obligations under this Agreement and the Registration Rights Agreement;
the execution and delivery of, and the performance by each of the Company
and the Guarantors of its obligations under, this Agreement and the
Registration Rights Agreement have been duly and validly authorized by the
Company and the Guarantors and each of this Agreement and, as of the
Closing Date, the Registration Rights Agreement will have been duly
executed and delivered by each of the Company and the Guarantors and will
constitute the valid and legally binding agreement of each of the Company
and the Guarantors, en-
15
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forceable against the Company and the Guarantors in accordance with its
terms, except as the enforcement hereof and thereof may be limited by
bankruptcy, insolvency or other similar laws affecting the enforcement of
creditors' rights generally and subject to the applicability of general
principles of equity, and except as rights to indemnity and contribution
hereunder and thereunder may be limited by Federal or state securities
laws or principles of public policy.
(o) Except as disclosed in the Offering Memorandum, subsequent to
the date as of which such information is given in the Offering Memorandum,
none of the Company or any Subsidiary has incurred any liability or
obligation, direct or contingent, or entered into any transaction, not in
the ordinary course of business, that is material or will be material to
the Company and the Subsidiaries, taken as a whole, and there has not been
any material change in the capital stock, or material increase in the
short-term or long-term debt of the Company or any Subsidiary.
(p) Each of the Company and the Subsidiaries has good and marketable
title to all property (real and personal) described in the Offering
Memorandum as being owned by it, free and clear of all liens, claims,
security interests or other encumbrances, except such as are described in
the Offering Memorandum or could not, in the aggregate, reasonably be
expected to have a Material Adverse Effect, and all the property described
in the Offering Memorandum as being held under lease by each of the
Company and the Subsidiaries is held by it under valid, subsisting and
enforceable leases, except as the enforcement thereof may be limited by
bankruptcy, insolvency, or similar laws affecting the enforcement of
creditors' rights generally and subject to the applicability of general
principles of equity.
(q) Except as permitted by the Act, the Issuers have not distributed
and, prior to the later to occur of the Closing Date and completion of the
distribution of the Securities, will not distribute any offering material
in connection with the offering and sale of the Securities other than the
Preliminary Offering Memorandum and Offering Memorandum (and any amendment
or supplement thereto in accordance with Section 4(c) hereof).
16
-16-
(r) Each of the Company and the Subsidiaries has such permits,
licenses, franchises, certificates of need and other approvals or
authorizations of governmental or regulatory authorities ("Permits") as
are necessary under applicable law to own their respective properties and
to conduct their respective businesses in the manner described in the
Offering Memorandum, except to the extent that the failure to have such
Permits could not reasonably be expected to have a Material Adverse
Effect; each of the Company and the Subsidiaries has fulfilled and
performed in all material respects all its obligations with respect to the
Permits, and, to the knowledge of the Issuers, no event has occurred which
allows, or after notice or lapse of time would allow, revocation or
termination thereof or results in any other material impairment of the
rights of the holder of any such Permit, subject in each case to such
qualification as may be set forth in the Offering Memorandum and except to
the extent that any such revocation or termination, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse
Effect.
(s) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions of the
Company and the Subsidiaries are executed in accordance with management's
general or specific authorization; (ii) transactions of the Company and
the Subsidiaries are recorded as necessary to permit preparation of
financial statements in conformity with GAAP and to maintain
accountability for assets; (iii) access to assets of the Company and the
Subsidiaries is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for assets of
the Company and the Subsidiaries is compared with existing assets of the
Company and the Subsidiaries at reasonable intervals and appropriate
action is taken with respect to any differences.
(t) None of the Company or any Subsidiary nor, to the knowledge of
the Issuers, any employee or agent of the Company or any Subsidiary has
made any payment of funds or received or retained any funds in violation
of any law, rule or regulation, which violation could reasonably be
expected to have a Material Adverse Effect.
(u) Except as disclosed in the Offering Memorandum, the Company and
the Subsidiaries have filed all tax returns required to be filed (other
than filings being con-
17
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tested in good faith), which returns are true and correct in all material
respects, and none of the Company or any Subsidiary is in default in the
payment of any taxes which were payable pursuant to said returns or any
assessments with respect thereto (other than taxes being contested in good
faith), except where the failure to file such returns and make such
payments (whether or not being contested in good faith) would not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
(v) No holder of any security of an Issuer (other than holders of
the Securities) has any right to request or demand registration of any
security of an Issuer because of the consummation of the transactions
contemplated by the Transaction Documents.
(w) Each of the Company and the Subsidiaries owns, possesses or
possesses adequate rights to use all patents, trademarks, trademark
registrations, service marks, service ▇▇▇▇ registrations, trade names,
copyrights, licenses, inventions, trade secrets and rights described in
the Offering Memorandum as being owned by it or necessary for the conduct
of its business, and the Company has not received notice of any claim to
the contrary (a "Claim") or any challenge (a "Challenge") by any other
person to the rights of each of the Company and the Subsidiaries with
respect to the foregoing, except for such Claims and Challenges which
could not reasonably be expected to have a Material Adverse Effect.
(x) Each Issuer is not and, upon sale of the Securities to be issued
and sold hereby in accordance herewith and the application of the net
proceeds of such sale as described in the Offering Memorandum under the
caption "Use of Proceeds," will not be an "investment company" within the
meaning of the Investment Company Act of 1940, as amended.
(y) When the Securities are issued and delivered pursuant to this
Agreement, such Securities will not be of the same class (within the
meaning of Rule 144A(d)(3) under the Act) as any security of an Issuer
that is listed on a national securities exchange registered under Section
6 of the Exchange Act or that is quoted in a United States automated
interdealer quotation system.
(z) None of the Issuers nor any of their affiliates (as defined in
Rule 501(b) of Regulation D under the Act)
18
-18-
has directly, or through any agent (provided that no representation is
made as to the Initial Purchasers or any person acting on their behalf),
(i) sold, offered for sale, solicited offers to buy or otherwise
negotiated in respect of, any security (as defined in the Act) which is or
will be integrated with the offering and sale of the Securities in a
manner that would require the registration of the Securities under the Act
or (ii) engaged in any form of general solicitation or general advertising
(within the meaning of Regulation D under the Act) in connection with the
offering of the Securities.
(aa) Assuming (i) the representations and warranties of the Initial
Purchasers in Section 2 hereof are true and correct in all material
respects, (ii) each Initial Purchaser complies with the covenants set
forth in Section 2 hereof (iii) compliance by each Initial Purchaser with
the offering and transfer procedures and restrictions described in the
Offering Memorandum, (iv) the accuracy of the representations and
warranties deemed to be made in the Offering Memorandum by purchasers to
whom the Initial Purchasers initially resell Securities and (v) purchasers
to whom the Initial Purchasers initially resell Securities receive a copy
of the Offering Memorandum prior to such sale, the purchase and sale of
the Securities pursuant hereto (including the Initial Purchasers' proposed
offering of the Securities on the terms and in the manner set forth in the
Offering Memorandum and Section 2 hereof) do not require registration
under the Act.
(bb) The execution and delivery of this Agreement and the other
Transaction Documents and the sale of the Securities to the Initial
Purchasers by the Issuers and by the Initial Purchasers to Eligible
Purchasers in accordance with the terms hereof will not result in any
prohibited transaction within the meaning of Section 406 of ERISA or
Section 4975 of the Internal Revenue Code. The representations made by the
Issuers in the preceding sentence are made in reliance upon and subject to
the accuracy of, and compliance with, the representations and covenants
made or deemed made by the Eligible Purchasers as set forth in the
Offering Memorandum under the section entitled "Transfer Restrictions."
(cc) Except as disclosed or contemplated by the Offering Memorandum,
each of the Company and the Subsidiaries is in compliance with, and not
subject to any liability under, any applicable federal, state, local and
for-
19
-19-
eign statute, regulation, rule, codes, ordinances, directives and orders
relating to pollution or to protection of public or employee health or
safety or to the environment, including, without limitation, those that
relate to any Hazardous Material (as defined herein ("Environmental
Laws")), except, in each case, where noncompliance or liability,
individually or in the aggregate, would not reasonably be expected to have
a Material Adverse Effect. The term "Hazardous Material" means any
pollutant, contaminant or waste, or any hazardous, dangerous, or toxic
chemical, material, waste, substance or constituent subject to regulation
under any Environmental Law.
(dd) Immediately after the consummation of the purchase and sale of
the Securities, the fair value and present fair saleable value of the
assets of the Company will exceed the sum of its stated liabilities and
identified contingent liabilities; the Company is not, nor will it be,
after giving effect to the consummation of such transactions, (i) left
with unreasonably small capital with which to carry on its business as it
is proposed to be conducted or (ii) unable to pay its debts (contingent or
otherwise) as they mature.
6. Indemnification and Contribution.
(a) The Issuers agree to jointly and severally indemnify and hold
harmless each Initial Purchaser and each person, if any, who controls an Initial
Purchaser within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act from and against any and all losses, claims, damages, liabilities
and out-of-pocket expenses (including reasonable costs of investigation)
incurred by any such persons arising out of or based upon any untrue statement
or alleged untrue statement of a material fact contained in the Preliminary
Offering Memorandum or Offering Memorandum or in any amendment or supplement
thereto, or arising out of or based upon any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading, except insofar as such losses, claims, damages,
liabilities or expenses arise out of or are based upon any untrue statement or
omission or alleged untrue statement or omission which has been made therein or
omitted therefrom in reliance upon and in conformity with the information
relating to an Initial Purchaser furnished in writing to the Issuers by an
Initial Purchaser, through Salomon Brothers Inc, expressly for use in connection
therewith; provided, however, that the indemnifi-
20
-20-
cation contained in this paragraph (a) with respect to the Preliminary Offering
Memorandum shall not inure to the benefit of an Initial Purchaser on account of
any such loss, claim, damage, liability or expense arising from the sale of the
Securities by such Initial Purchaser to any person if the untrue statement or
alleged untrue statement or omission or alleged omission of a material fact
contained in the Preliminary Offering Memorandum was corrected in the Offering
Memorandum and such Initial Purchaser sold Securities to that person without
sending or giving, at or prior to the written confirmation of such sale, a copy
of the Offering Memorandum (as then amended or supplemented). The foregoing
indemnity agreement shall be in addition to any liability which the Company or a
Guarantor may otherwise have.
(b) If any action, suit or proceeding shall be brought against an
Initial Purchaser or any person who controls an Initial Purchaser in respect of
which indemnity may be sought against the Issuers in accordance with this
Section 6, such Initial Purchaser or any such person who controls such Initial
Purchaser shall promptly notify in writing the Issuers, and the Issuers shall
assume the defense thereof, including the employment of counsel reasonably
acceptable to such Initial Purchaser or such person who controls such Initial
Purchaser and payment of all fees and expenses relating to the assumption of the
defense by the Issuers. An Initial Purchaser or any person who controls an
Initial Purchaser shall have the right to employ separate counsel in any such
action, suit or proceeding and to participate in the defense thereof, but the
fees and expenses of such counsel shall be at the expense of such Initial
Purchaser or any such person who controls an Initial Purchaser unless (i) the
Issuers have agreed in writing to pay such fees and expenses, (ii) the Issuers
have failed to assume the defense and employ counsel on a timely basis or (iii)
the named parties to any such action, suit or proceeding (including any
impleaded parties) include both such Initial Purchaser or any such person who
controls an Initial Purchaser and an Issuer and such Initial Purchaser or any
such person who controls an Initial Purchaser shall have been advised by its
counsel that representation of such indemnified party and an Issuer by the same
counsel would be inappropriate under applicable standards of professional
conduct (whether or not such representation by the same counsel has been
proposed) due to actual or potential differing interests between them (in which
case the Issuers shall not have the right to assume the defense of such action,
suit or proceeding (a "Conflicted Action") on behalf of such Initial Purchaser
or any such person who controls an Initial Purchaser). It is understood,
however, that the Issuers shall,
21
-21-
in connection with any such Conflicted Action, be liable for the reasonable fees
and expenses of a single counsel (in addition to any local counsel) for the
Initial Purchasers and each such person who controls an Initial Purchaser, which
firm shall be designated in writing by Salomon Brothers Inc, and that all such
reasonable fees and expenses shall be reimbursed as incurred as provided in
paragraph (a) hereof. The Issuers shall not be liable for any settlement of any
such action, suit or proceeding effected without the written consent of the
Issuers, but if settled with such written consent, or if there be a final
judgment for the plaintiff in any such action, suit or proceeding, the Issuers
agree to jointly and severally indemnify and hold harmless the Initial
Purchasers, to the extent provided in paragraph (a), and any person who controls
an Initial Purchaser from and against any loss, claim, damage, liability or
expense by reason of such settlement or judgment.
(c) Each Initial Purchaser, severally and not jointly, agrees to
indemnify and hold harmless each Issuer, their respective directors and officers
and any person who controls an Issuer within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act to the same extent as the indemnity from
the Issuers to the Initial Purchasers set forth in paragraph (a) hereof, but
only with respect to information relating to such Initial Purchaser furnished in
writing by such Initial Purchaser expressly for use in the Preliminary Offering
Memorandum or Offering Memorandum or any amendment or supplement thereto. If any
action, suit or proceeding shall be brought against an Issuer, any of their
respective directors or officers or any such controlling person based on the
Preliminary Offering Memorandum or Offering Memorandum, or any amendment or
supplement thereto, and in respect of which indemnity may be sought against an
Initial Purchaser pursuant to this paragraph (c), such Initial Purchaser shall
have the rights and duties given to the Issuers by paragraph (b) above (except
that if the Issuers shall have assumed the defense thereof, such Initial
Purchaser shall not be required to do so, but may employ separate counsel
therein and participate in the defense thereof, but the fees and expenses of
such counsel shall be at such Initial Purchaser's expense), and each Issuer,
their respective directors and officers and any such controlling person shall
have the rights and duties given to the Initial Purchasers by paragraph (b)
above. The foregoing indemnity agreement shall be in addition to any liability
which an Initial Purchaser may otherwise have.
(d) If the indemnification provided for in this Section 6 is
unavailable to an indemnified party under para-
22
-22-
graphs (a) or (c) hereof in respect of any losses, claims, damages, liabilities
or expenses referred to therein, then an indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages,
liabilities or expenses (i) in such proportion as is appropriate to reflect the
relative benefits received by the Issuers on the one hand and an Initial
Purchaser on the other hand from the offering of the Securities or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Issuers on
the one hand and an Initial Purchaser on the other in connection with the
statements or omissions that resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Issuers on the one hand and an Initial
Purchaser on the other shall be deemed to be in the same proportion as the total
net proceeds from the offering (before deducting expenses) received by the
Issuers bear to the total discounts and commissions received by such Initial
Purchaser, in each case as set forth in the table on the cover page of the
Offering Memorandum. The relative fault of the Issuers on the one hand and an
Initial Purchaser on the other hand shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Issuers on the one hand or by such Initial Purchaser
on the other hand and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
(e) The Issuers and the Initial Purchasers agree that it would not
be just and equitable if contribution pursuant to this Section 6 were determined
by a pro rata allocation or by any other method of allocation that does not take
account of the equitable considerations referred to in paragraph (d) above. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities and expenses referred to in paragraph (d) above
shall be deemed to include, subject to the limitations set forth above, any
legal or other out-of-pocket expenses reasonably incurred by such indemnified
party in connection with investigating any claim or defending any such action,
suit or proceeding. Notwithstanding the provisions of this Section 6, no Initial
Purchaser shall be required to contribute any amount in excess of the amount by
which the total price of the Securities purchased by it exceeds
23
-23-
the amount of any damages which such Initial Purchaser has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
(f) Any losses, claims, damages, liabilities or expenses for which
an indemnified party is entitled to indemnification or contribution under this
Section 6 shall be paid by the indemnifying party to the indemnified party as
such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 6 and the
representations and warranties of the Issuers set forth in this Agreement shall
remain operative and in full force and effect, regardless of (i) any
investigation made by or on behalf of an Initial Purchaser or any person who
controls an Initial Purchaser, an Issuer, their respective directors or officers
or any person controlling an Issuer, (ii) acceptance of any Securities and
payment therefor hereunder and (iii) any termination of this Agreement. A
successor to an Initial Purchaser or any person who controls an Initial
Purchaser, or to an Issuer, their respective directors or officers or any person
controlling an Issuer, shall be entitled to the benefits of the indemnity,
contribution and reimbursement agreements contained in this Section 6.
(g) No indemnifying party shall, without the prior written consent
of the indemnified party, effect any settlement of any pending or threatened
action, suit or proceeding in respect of which any indemnified party is or could
have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such action, suit or proceeding.
7. Conditions of the Initial Purchasers' Obligations. The
obligations of each Initial Purchaser to purchase and pay for the Securities to
be purchased by it on the Closing Date hereunder are subject to the fulfillment,
in such Initial Purchaser's sole discretion, of the following conditions:
(a) At the time of execution of this Agreement and on the Closing
Date, no order or decree preventing the use of the Offering Memorandum or
any amendment or supplement thereto, or any order asserting that the
transactions con-
24
-24-
templated by this Agreement are subject to the registration requirements
of the Act shall have been issued and no proceedings for those purposes
shall have been commenced or shall be pending or, to the knowledge of the
Issuers, threatened. No order suspending the sale of the Securities in any
jurisdiction shall have been issued and no proceedings for that purpose
shall have been commenced or shall be pending or, to the knowledge of the
Issuers, threatened.
(b) On the Closing Date, the Issuers shall have delivered to the
Initial Purchasers a true, correct and complete copy of the New Revolving
Credit Facility; on and as of the Closing Date (after giving effect to the
consummation of the transactions contemplated by this Agreement), there
shall not exist any condition which would constitute a Default or an Event
of Default (as defined in the New Revolving Credit Facility).
(c) Subsequent to the date hereof, (i) except as disclosed or
contemplated in the Offering Memorandum, there shall not have occurred any
material adverse change in the condition (financial or other), business,
prospects, properties, assets, net worth or results of operations of the
Company and the Subsidiaries, taken as a whole, which, in the opinion of
the Initial Purchasers, would materially adversely affect the market for
the Securities, or (ii) the Offering Memorandum shall not contain any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, if amending or supplementing the Offering Memorandum to
correct any such misstatement or omission could, in the sole judgment of
the Initial Purchasers, materially adversely affect the marketability of
the Securities.
(d) The Initial Purchasers shall have received on the Closing Date
an opinion of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, counsel for the Company, dated the Closing
Date and addressed to the Initial Purchasers, substantially in the form of
Exhibit B hereto.
(e) The Initial Purchasers shall have received on the Closing Date
an opinions of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for the Initial
Purchasers, dated the Closing Date, and addressed to the Initial
Purchasers, with re-
25
-25-
spect to such matters as the Initial Purchasers may request.
(f) The Initial Purchasers shall have received "cold comfort"
letters addressed to the Initial Purchasers, and dated the date hereof and
the Closing Date, from Ernst & Young LLP, substantially in the forms
heretofore approved by the Initial Purchasers.
(g) (i) There shall not have been any change in the capital stock of
the Company or any Subsidiary nor any material increase in the short-term
or long-term debt of the Company or any Subsidiary from that set forth or
contemplated in the Offering Memorandum; (ii) except as disclosed or
contemplated by the Offering Memorandum, the Company and the Subsidiaries
shall not have any liabilities or obligations, direct or contingent
(whether or not in the ordinary course of business), that are material to
the Company and the Subsidiaries, taken as a whole; (iii) all the
representations and warranties of the Issuers contained in this Agreement
shall be true and correct in all material respects on and as of the date
hereof and on and as of the Closing Date as if made on and as of the
Closing Date; and (iv) the Initial Purchasers shall have received a
certificate, dated the Closing Date and signed by the chief executive
officer and the chief accounting officer of each of the Issuers (or such
other officers as are acceptable to the Initial Purchasers), to the effect
set forth in this Section 7(g) and in Section 7(h) hereof.
(h) The Issuers shall not have failed at or prior to the Closing
Date to have performed or complied with any of their respective agreements
herein contained and required to be performed or complied with by them
hereunder at or prior to the Closing Date.
(i) There shall not have been any announcement by any "nationally
recognized statistical rating organization," as defined for purposes of
Rule 436(g) under the Act, that (i) it is downgrading its rating assigned
to any class of securities of the Issuers (including the Securities), or
(ii) it is reviewing its ratings assigned to any class of securities of
the Issuers (including the Securities) with a view to possible
downgrading, with negative implications or direction not determined.
(j) The Securities shall have been approved for trading on PORTAL.
26
-26-
(k) The Issuers shall have taken all necessary acts to (i) repay all
of the indebtedness for money borrowed of the Company and the Subsidiaries
indicated as being repaid in the Offering Memorandum under the caption
"Unaudited Pro Forma Consolidated Financial Information" immediately prior
to the issuance of the Securities and (ii) terminate the related credit
agreements.
(l) The Company shall have received a solvency opinion from
Valuation Research, which solvency opinion shall be in form and substance
reasonably satisfactory to the Initial Purchasers.
(m) Roma Restaurant Holdings, Inc. ("Holdings") shall have received
at least $27.0 million of cash equity proceeds pursuant to the
Recapitalization Agreement (as defined in the Offering Memorandum).
(n) Except as disclosed in the Offering Memorandum, Holdings shall
have contributed all of its assets and properties to the Company.
(o) The Issuers shall have furnished or caused to be furnished to
the Initial Purchasers such further certificates and customary closing
documents as the Initial Purchasers shall have reasonably requested.
All such opinions, certificates, letters and other documents will be
in compliance with the provisions hereof only if they are reasonably
satisfactory in form and substance to the Initial Purchasers.
Any certificate or document signed by any officer of an Issuer and
delivered to the Initial Purchasers, or to counsel for the Initial Purchasers,
shall be deemed a representation and warranty by the Issuers to the Initial
Purchasers as to the statements made therein.
8. Expenses.
(a) Whether or not the purchase and sale of the Securities hereunder
is consummated or this Agreement is terminated pursuant to Section 9 hereof, the
Issuers agree to pay the following costs and expenses and all other costs and
expenses incident to the performance by them of their obligations hereunder: (i)
the printing or reproduction of the Preliminary Offering Memorandum and the
Offering Memorandum (including financial statements thereto), and each amendment
or supplement
27
-27-
to any of them, this Agreement, the Registration Rights Agreement and the
Indenture; (ii) the delivery (including postage, air freight charges and charges
for counting and packaging) of such copies of the Offering Memorandum, the
Preliminary Offering Memorandum and all amendments or supplements thereto as may
be reasonably requested for use in connection with the offering and sale of the
Securities; (iii) the printing, authentication, issuance and delivery of
certificates for the Securities, including any stamp taxes in connection with
the original issuance and sale of the Securities; (iv) the printing (or
reproduction) and delivery of the preliminary and supplemental Blue Sky
Memoranda and all other agreements and documents printed (or reproduced) and
delivered in connection with the offering of the Securities; (v) the application
for quotation of the Securities on PORTAL; (vi) the qualification of the
Securities for offer and sale under the securities or Blue Sky laws of the
several states as provided in Section 4(f) hereof (including the reasonable
fees, expenses and disbursements of counsel for the Initial Purchasers relating
to the preparation, printing or reproduction, and delivery of the preliminary
and supplemental Blue Sky Memoranda and such qualification); and (vii) the fees
and expenses of the Issuers' accountants and the fees and expenses of counsel
(including local and special counsel) for the Company.
(b) If the purchase and sale of the Securities hereunder is not
consummated because any condition to the obligations of the Initial Purchaser
set forth in Section 7 hereof is not satisfied, because this Agreement is
terminated because of any failure, refusal or inability on the part of the
Issuers to perform all obligations and satisfy all conditions on their part to
be performed or satisfied hereunder other than by reason of a default by the
Initial Purchaser in payment for the Securities on the Closing Date, the Issuers
shall reimburse the Initial Purchasers promptly upon demand for all reasonable
out-of-pocket expenses (including reasonable fees and disbursements of counsel)
that shall have been incurred by it in connection with the proposed purchase and
sale of the Securities and the other transactions contemplated hereby; provided
that the defaulting Initial Purchaser shall reimburse the Company upon demand
for all reasonable out-of-pocket expenses (including reasonable fees and
expenses for law and accounting services and printing costs) that shall have
been incurred by it in connection with the proposed purchase and sale of the
Securities and the transactions contemplated hereby.
9. Termination of Agreement. (a) This Agreement shall be subject to
termination in the absolute discretion of
28
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the Initial Purchasers, without liability on the part of the Initial Purchasers
to the Issuers, by notice to the Issuers, if prior to the Closing Date, (i)
trading in securities generally on the New York Stock Exchange, American Stock
Exchange or the Nasdaq National Market shall have been suspended or materially
limited, (ii) a general moratorium on commercial banking activities in New York
shall have been declared by either Federal or New York state authorities or
(iii) there shall have occurred any outbreak or escalation of hostilities or
other international or domestic calamity, crisis or change in political,
financial or economic conditions, the effect of which on the financial markets
of the United States or the market for the Securities is such as to make it, in
the sole judgment of the Initial Purchasers, impracticable or inadvisable to
commence or continue the offering of the Securities on the terms set forth on
the cover page of the Offering Memorandum or to enforce contracts for the resale
of the Securities by the Initial Purchasers. Notice of such termination may be
given to the Issuers by telegram, telecopy or telephone and shall be
subsequently confirmed by letter.
(b) If any Initial Purchaser shall fail to purchase and pay for any
of the Notes agreed to be purchased by such Initial Purchaser hereunder and such
failure to purchase shall constitute a default in the performance of its
obligations under this Agreement, the remaining Initial Purchaser shall be
obligated to take up and pay for the Notes which the defaulting Initial
Purchaser agreed but failed to purchase; provided, however, that in the event
that the aggregate principal amount of Notes which the defaulting Initial
Purchaser agreed but failed to purchase shall exceed 10% of the aggregate
principal amount of Notes set forth in Schedule I hereto, the remaining Initial
Purchaser shall have the right to purchase all, but shall not be under any
obligation to purchase any, of the Notes, and if such non-defaulting Initial
Purchaser does not purchase all the Notes, this Agreement will terminate without
liability to the non-defaulting Initial Purchaser or the Issuers. In the event
of a default by any Initial Purchaser as set forth in this Section 9(b), the
Closing Date shall be postponed for such period, not exceeding seven days, as
the non-defaulting Initial Purchaser shall determine in order that the required
changes in the Offering Memorandum or in any other documents or arrangements may
be effected. Nothing contained in this Agreement shall relieve any defaulting
Initial Purchaser of its liability, if any, to the Issuers or the non-defaulting
Initial Purchaser for damages occasioned by its default hereunder.
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10. Information Furnished by the Initial Purchaser. The statements
set forth in the stabilization legend on the inside front cover, the last
paragraph on the cover page and in the third, fifth, seventh, eighth, ninth and
tenth paragraphs under the caption "Plan of Distribution" in the Preliminary
Offering Memorandum and Offering Memorandum, constitute the only information
furnished by the Initial Purchasers as such information is referred to in
Sections 5(b) and 6 hereof.
11. Miscellaneous. Except as otherwise provided herein, notice given
pursuant to any provision of this Agreement shall be in writing and shall be
delivered (i) if to the Issuers, at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇, Attention: Chief Executive Officer, or (ii) if to the Initial Purchasers,
to Salomon Brothers Inc, Seven ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇,
Attention: Manager, Investment Banking Division.
This Agreement has been and is made solely for the benefit of the
Initial Purchasers, the Issuers, and their respective directors, officers and
the controlling persons referred to in Section 6 hereof and their respective
successors and assigns, to the extent provided herein, and no other person shall
acquire or have any right under or by virtue of this Agreement. Neither the term
"successor" nor the terms "successors and assigns" as used in this Agreement
shall include a purchaser from an Initial Purchaser of any of the Securities in
its status as such purchaser.
12. Applicable Law; Counterparts. This Agreement shall be governed
by and construed in accordance with the laws of the State of New York applicable
to contracts made and to be performed within the State of New York.
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This Agreement may be signed in various counterparts which together
constitute one and the same instrument.
Please confirm that the foregoing correctly sets forth the agreement
among the Company, the Guarantors and the Initial Purchasers.
Very truly yours,
ROMACORP OPERATING COMPANY, INC.
By:_____________________________________
Name:
Title:
ROMA FRANCHISE CORPORATION
By:_____________________________________
Name:
Title:
ROMA SYSTEMS, INC.
By:_____________________________________
Name:
Title:
ROMA DINING LP
By:_____________________________________
Name:
Title:
ROMA HOLDINGS, INC.
By:_____________________________________
Name:
Title:
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ROMA HUNTINGTON BEACH, INC.
By:_____________________________________
Name:
Title:
ROMA BAR MANAGEMENT CORPORATION
By:_____________________________________
Name:
Title:
ROMA FORT WORTH, INC.
By:_____________________________________
Name:
Title:
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Confirmed as of the date first
above mentioned.
SALOMON BROTHERS INC
▇▇▇▇▇▇▇▇ & CO. INC.
By: SALOMON BROTHERS INC
By:_________________________________
Name:
Title:
33
SCHEDULE I
Principal Amount
of Notes
Initial Purchasers to be Purchased
------------------ ---------------
Salomon Brothers Inc........ $48,750,000
▇▇▇▇▇▇▇▇ & Co. Inc.......... 26,250,000
-----------
$75,000,000
===========
34
SCHEDULE II
SUBSIDIARIES
JURISDICTION OF
OWNED BY AND INCORPORATION/
NAME PERCENTAGE OWNED ORGANIZATION
---- ---------------- ------------
Subsidiaries
------------
ROMA FRANCHISE CORPORATION 100% Delaware
ROMA SYSTEMS, INC. 100% Delaware
ROMA DINING LP, 100% Delaware
ROMA HOLDINGS, INC. 100% Delaware
ROMA HUNTINGTON BEACH, INC. 100% Delaware
ROMA BAR MANAGEMENT CORPORATION 100% Texas
ROMA FORT WORTH, INC., 100% Texas